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Nestlé to offer additional payments to Fonterra dairy farmers
FoodBev Media

FoodBev Media

20 December 2023

Nestlé to offer additional payments to Fonterra dairy farmers

A new agreement between Nestlé and Fonterra will see the food giant funding an additional payment to farmers who achieve one of the three levels of Fonterra’s 'The Co-operative Difference' framework during the 2023/24 season. The additional payment to farmers is estimated to be around 1-2 cents per kilogram of milk solids, depending on the number of farmers meeting these levels. The framework outlines farming and business practices, focusing on aspects such as quality, safety and sustainability to keep farmers at the forefront. It offers rewards to farmers that meet certain criteria across five focus areas – environment, animals, people and community, milk, and co-op and prosperity. Fonterra CEO Miles Hurrell said: “We are delighted to work in partnership with Nestlé to recognise the co-op’s farmers who are at the forefront of industry best practice". “By working in partnership, we can grow sustainably together as we aim to produce lower carbon milk into the future.” According to the company, Nestlé is globally investing CHF 1.2 billion (approx. $1.38 billion) to advance regenerative agriculture and reduce emissions. The objective is to source 50% of its ingredients through regenerative agriculture methods by 2030. Nestlé New Zealand CEO Jennifer Chappell added: “Nestlé has sourced dairy from New Zealand for well over a hundred years, and we will continue supporting farmers, alongside our partners, to develop new economic opportunities and reduce their greenhouse gas emissions.” Fonterra aims to achieve net-zero emissions by 2050, which includes a 30% intensity reduction in on-farm emissions by 2030. Chappell added: “This move will encourage even greater action by farmers, researchers and policymakers in support of a just transition for the dairy industry, which in turn will help the industry and dairy farmers make the most of the economic opportunities presented by the shift to lower emissions”. Nestlé and Fonterra's partnership was first announced in December 2022.

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