Nestlé to offer cash payments to Fonterra dairy farmers under net-zero carbon partnership

Depending on the number of farmers that meet these levels, Fonterra expects the additional payment to farmers to be about 1-2c per kilogram of milk solids (kgMs).

Nestlé and Fonterra joined forces in 2022​ to develop a ‘commercially viable net zero carbon emissions dairy farm’. Under the five-year project, the two companies would examine all aspects of farm operations to reduce carbon, with the aim of cutting emissions by 30% by mid-2027 and reach net-zero carbon emissions in a decade. The project will contribute to Nestlé meeting its net-zero emissions goal, including reducing emissions by 20% by 2025 and 50% by 2030. The pilot was set to start with around 50 farms and be scaled up over the next three years.

The first level under Fonterra’s The Co-operative Difference framework requires farmers to meet four ‘achievements’ – have and implement and Animal Wellbeing Plan; have a Farm Environment Plan in place; complete a Food Safety Practices and Procedures assessment, and complete the DairyNZ Workplace 360 Assessment. In return, farmers would receive 7c (NZ$) per kgMS on all milk supplied.

The next two levels revolve around improving milk quality – the first one requires farmers to meet a certain milk quality excellence standard for at least 30 days per season (for a payment of 3c per kgMs on all qualifying milk). The third level is about achieving this excellence standard for at least 90% of the days supplied in the season. More information about the framework can be found here​.