Tuesday, 21 November 2023 10:55

Fonterra rules out incentive to help farmers lower emissions

Written by  Sudesh Kissun
Fonterra Co-operative Council chair John Stevenson says it’s available to pass on farmer concerns and questions to the board. Fonterra Co-operative Council chair John Stevenson says it’s available to pass on farmer concerns and questions to the board.

Fonterra chair Peter McBride says the co-operative isn't thinking about offering farmers any financial incentives for lowering their on-farm emissions profile.

He points out that Fonterra's Scope 3 emissions target, announced this month, is a co-op wide target that will be achieved by building understanding and helping farmers.

"We are not thinking about incentives. The two bottom lines for me are that the measurement on farm need to be more accurate and any incentive needs to be commercially justifiable," he told Rural News.

The co-operative is targeting a 30% intensity reduction in on-farm emissions by 2030, from a 2018 baseline, which will see it further reduce the emissions profile of its products. 86% of Fonterra's emissions come from on-farm, and the new Fonterra-wide target is seeking to reduce emissions intensity by tonne of FPCM (fat and protein corrected milk) collected by the co-op.

The co-op says the Scope 3 target has been triggered by growing sustainability ambitions from customers and financial institutions, along with increasing market access, legal and reporting obligations for dairy.

Fonterra farmers say the target is achievable, but they expect support from their co-op to achieve it.

McBride says the co-op and DairyNZ will help farmers learn from each other through events like discussion groups.

He points out that the emissions profile among different farming systems and within farming systems are quite alarming.

"If you see in the Waikato, farms that produce over 1200 kgMS, their emissions profile per kgMS is 8-18kg carbon equivalent. That's massive.

"So, what can farmers learn from each other?"

McBride says people need to remember that this is a target.

"We've seen progress made without any focus on it. So, when we focus on it and it's in front of your mind, there are things that you can achieve."

Fonterra Co-operative Council chair John Stevenson told Rural News that the target is broadly in line with what customers and other processors have announced.

"Farmers have always been able to adapt to change. I am confident that this target is achievable."

He also points out that Fonterra farmers will also want to understand the value proposition of making these changes.

"Council believes that Fonterra will need to do more work in this area."

Stevenson says he's encouraged that this is an intensity target which encourages farmers to be more efficient and productive.

"This is something we wake up every day to do. Farmers will be looking closely for the arrival of new on farm and novel technologies that will assist them further with their focus on efficiency. Fonterra have invested farmer capital in novel technologies.

"We will be looking for this investment to deliver."

He says the council is available to pass Fonterra farmers questions and concerns through to the board.

More like this

Fonterra trims board size

Fonterra’s board has been reduced to nine - comprising six farmer-elected and three appointed directors.

Returns 'not good enough'

Fonterra leaders are making their case for offloading the co-operative's $3 billion consumer business, noting that its return on capital has been nowhere near respectable.

Record milk price!

A record farmgate milk price for Fonterra shareholders is all but confirmed for this season.

Chinese strategy

OPINION: Fonterra may have sold its dairy farms in China but the appetite for collaboration with the country remains strong.

Featured

Massey Research Field Day attracts huge interest

More than 200 people turned out on Thursday, November 21 to see what progress has been made on one of NZ's biggest and most comprehensive agriculture research programmes on regenerative agriculture.

Expo set to wow again

Stellar speakers, top-notch trade sites, innovation, technology and connections are all on offer at the 2025 East Coast Farming Expo being once again hosted in Wairoa in February.

A year of global challenges

As a guest of the Italian Trade Association, Rural News Group Machinery Editor Mark Daniel took the opportunity to make an early November dash to Bologna to the 46th EIMA exhibition.

National

Winter grazing warning

Every time people from overseas see photographs of cows up to their hocks in mud it's bad for New Zealand.

ANZ defends farm lending rates

The country's largest lender to the agriculture sector says it's not favouring home loans over farm and business lending.

Machinery & Products

Expo set to wow again

Stellar speakers, top-notch trade sites, innovation, technology and connections are all on offer at the 2025 East Coast Farming Expo…

A year of global challenges

As a guest of the Italian Trade Association, Rural News Group Machinery Editor Mark Daniel took the opportunity to make…

» Latest Print Issues Online

The Hound

Review SOEs!

OPINION: NIWA has long weathered complaints about alleged stifling of competition in forecasting, and more recently, claims of lack of…

Bank reset

OPINION: Adding to calls to get banks to 'back off', NZ Agri Brokers director Andrew Laming has revealed that the…

» Connect with Rural News

» eNewsletter

Subscribe to our weekly newsletter