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Arla has paid its first monthly incentive to its farmer owners, rewarding climate activities and other sustainability efforts being made on their farms using a data-driven and science-based points system. Arla farmers taking the most action on climate activities will receive a higher price for their milk. The first payment to its farmers, €300 million, has been activated. Based on the current points score, the cooperative stands to pay out €2.2 billion until the end of 2030 for farmers’ sustainability activities. However, the amount is expected to increase as farmers, motivated by the incentive, make further climate improvements. In October last year, Arla introduced its new ‘Sustainability Incentive’ model which rewards farmers for any climate and environment-enhancing initiatives they implement. As a result of the incentive, Arla said that consumers are “guaranteed that a part of the price they pay for Arla’s products helps reward and motivate a faster transition to more sustainable dairy farming”. Arla’s CEO, Peder Tuborgh, said: “I have been looking forward to this. The Sustainability Incentive is a large step towards linking economy and climate and nature improvements on farm. Arla’s unique point system makes it possible for us to reward our owners and thus contribute to their large investments in sustainability. At the same time, we strengthen the farmers’ motivation to implement the initiatives necessary for our cooperative to reach its ambitious climate goals for 2030.” In 2022, Arla farmers across seven countries were said to have reduced their CO2e emissions from their milk by more than 2%. Arla says it pays an average of €1.44 per kilo of milk to its farmer owners through the Sustainability Incentive. Additionally, it pays €1 per kilo of milk for submitting the Climate Check data that is required to take advantage of the Sustainability Incentive. For an average Arla farm with an annual milk production of 1.6 million kg, the two amounts in total equal close to €40,000 a year. Jan Toft Nørgaard, chairman of the board at Arla Foods, said: ”Our owners are working determinedly to reduce emissions on their farm. There is a great commitment in our cooperative to show our consumers, our industry and society in general that we as Arla farmers are able to produce milk with an increasingly smaller footprint on climate and nature. It is a significant effort for the individual farmer; however, many are well on their way and together we can motivate each other, e.g., through a financial incentive using our new points-based model. I am excited to watch the level going forward because with this large engagement, we will be able to move really far in a short period of time.” The monthly incentive will be updated quarterly and the total annual amount depends on the farmers' level of sustainability initiatives on each farm as well as the total milk volume in Arla.