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Nestle partnership sees extra payment offered to Fonterra farmers this season

One year on from announcing a partnership designed to help reduce on-farm emissions, Fonterra and Nestlé are pleased to confirm the next step they’re taking to support farmers with their sustainability actions.

A new agreement will see Nestlé fund 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. Depending on the number of farmers that meet these levels, Fonterra expects the additional payment to farmers to be about 1-2 cents per kilogram of milk solids.

Fonterra CEO Miles Hurrell welcomes Nestlé’s continued support of farmers who are making continuous improvement with on-farm sustainability.

“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,” says Mr Hurrell.

Globally, Nestlé is investing 1.2 billion Swiss Francs (NZD2.25 billion) by 2025 to advance regenerative agriculture and reduce emissions, aiming to source 50% of their ingredients through regenerative agriculture methods by 2030.

Nestlé New Zealand CEO Jennifer Chappell says their success relies not just on working with processors, but also farmers who share this vision.

“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 has an ambition of being net zero by 2050, with 2030 targets including a 30% intensity reduction in on-farm emissions, which Nestlé welcomes.

“This move will encourage even greater action by farmers, researchers and policy makers 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,” says Jennifer Chappell.

Notes to editors:

Fonterra’s Co-operative Difference framework

The Co-operative Difference framework sets out the farming and business practices that will help farmers to stay at the forefront, such as quality, safety and sustainability.

It has three levels:

1. Te Pūtake (“The start of the journey”)

2. Te Puku (“The mid-point”)

3. Te Tihi (“The Summit”)

The framework also rewards farmers that meet certain criteria across five focus areas – environment, animals, people & community, milk, and Co-op & prosperity.

Find out more here.

Nestlé partnership

The partnership between Fonterra and Nestlé was first announced in December 2022. It involves multiple projects, including:

Net Zero Carbon Farm

Fonterra and Nestlé are working with co-partner Dairy Trust Taranaki to test solutions on a Fonterra-owned farm in Taranaki to see if, over the next 5-10 years, it can become the first commercially viable net zero carbon dairy farm in New Zealand.

The farm has infrastructure in place to support open days and demonstrations.

In its first year, much of the focus has been laying the important benchmark foundations from which future success can be measured. The aim is to reduce as many emissions as possible through the farm’s entire supply chain. The team seeks to improve emissions efficiency through investigating the on-farm factors that impact emissions (e.g. type of feed and fertiliser) while targeting an increase in milk production per cow.

The objective is to share the results and make it easier for Fonterra farmers to apply successful tools and practices on their own farms.

GHG Farmer Support Pilot

This is a multi-year collaboration between Fonterra and Nestlé that started in late 2022. The opt-in pilot sees enrolled Fonterra supplying farms get additional support to implement changes aimed at lowering their on-farm greenhouse gas (GHG) emissions. This includes in areas such as improved management of feed and pasture, on-farm tree planting and enhanced milk production efficiency

Baseline GHG emissions profiles have been calculated for the first group of around 50 farms, based on their emissions during the 2021/22 season, and results for the 2022/23 season are due next year. The project is being scaled up and enrolment is underway for the next group of farms.

 

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