Why Fonterra accepted defeat in the dairy aisle
OPINION: Fonterra's sale of its consumer dairy business to Lactalis is a clear sign of the co-operative’s failure to compete in the branded consumer market.
The co-op and its 10,500 farmers have always set the benchmark on environmental sustainability, especially water quality
Fonterra this week released its second sustainability report — a full picture of its commitments, progress and performance on environmental, social and economic topics in the financial year 2018.
And a look at what the co-op and its farmers have achieved in the past 12 months bats all aspects of ‘dirty dairying’ into touch.
Fonterra and New Zealand’s dairy farmers get unfairly blamed for degrading the country’s waterways. Environmental lobby groups, especially Greenpeace, claim that too many cows are trashing our rivers and making them unswimmable.
The critics also harp on about chemical fertilisers, claiming that their use leads to increasing cow numbers, yet practically all dairy cattle are now excluded from waterways on farms: 99.6% of permanent waterways are now fenced and 99.9% of regular waterway crossings now have bridges or culverts.
The co-op now employs 24 sustainable dairy advisors (SDAs) nationwide and it expects to have 28 by the end of 2018, on the way to a target of 30 (double last year).
Fonterra’s Tiaki programme, which has SDAs providing advice, tools and services to farmers, has helped see at least 1000 farm environment plans completed. These tailored plans guide the farmer in improving environmental outcomes by the use of digital mapping tools and good management practices.
The good work is not confined to farms: the co-op is also tackling water quality issues at its processing sites.
A recent water recycling innovation at Fonterra’s Pahiatua manufacturing site will save about half a million litres of water a day. Meanwhile the co-op’s factory at Darfield has new technology which will reduce the amount of groundwater drawn by about 70%. Learnings from Pahiatua and Darfield will be applied elsewhere to help reach the 2020 target of reducing water use at 26 NZ manufacturing sites by 20%.
Fonterra is also involved with government agencies and communities to lift water quality.
Excellent progress has been noted at the halfway point in Fonterra’s 10-year Living Water partnership with the Department of Conservation, which is focussed on five freshwater catchments to identify game-changing and scaleable solutions that demonstrate that dairying and freshwater can thrive together.
No one is promising to clean up the waterways overnight; it’s a long-term approach with results only showing over the long term. But Fonterra farmers aren’t slowing down. The task of reversing the decline seen in water quality over many years is complex and will only be achieved if everybody does their bit.
