John Stevenson: Chair of Fonterra's Co-operative Council on the company offering dairy farmers compensation for sustainability efforts

Fonterra dairy farmers will be able to earn cash for their climate efforts - beginning from June.

The dairy giant has announced it will pay an extra 1-5 cents a kilogram of milk solids to farms that meet climate criteria, and more for some farms.

The criteria takes into account emissions from cow feed, fertiliser, animals and drained peat soils - minus any carbon removed by trees and vegetation.

Chair of Fonterra's Co-operative Council, John Stevenson, says this financial incentive will make a material difference to the farmers who receive it. 

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Episode Transcript

Speaker 1 (00:09):
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Speaker 2 (00:17):
If they keep it green, they'll get the gold. Fonterra
is offering its dairy farmers an extra one to five
cents per kg of milk solids to get the payment
their emissions. Yes, the climate emissions need to be lower
than they were in twenty seventeen, and based on how
Fonterra's farms met climate criteria last season, they're expecting around
five thousand farmers should qualify for this plus. But wait,

(00:41):
there's more. If a farm's emissions are thirty percent lower
than the average Mars and Nessley, which is where all
this money is coming from, the contract done with them
will drop in an additional ten to twenty five cents
perkg of milk solids. John Stevens is the chair of
Fonterra's Cooperative Council. He's with me Hi John, Good evening, right,
what do you make of this?

Speaker 3 (01:02):
I think it's big news for our farmers. It's certainly
a significant amount of extra funding and recognition of their
high quality milk, and it will make a material difference
to those farmers that receive.

Speaker 2 (01:13):
It, So put it in context, next to one to
five cents per kilogram of milk solids might not sound
like much to people. What will it well, what could
it mean to your average farmer?

Speaker 3 (01:23):
I think what it could mean will depend on their production.
But for an average farm, you know, we could we
could see, we could see recognition there in and around that,
you know, sort of ten to twenty thousand dollars MARC
depending on the achievement. And I think it's important to
note that there there is a range within that, so
you know that that will depend on on on farm practices.

Speaker 2 (01:45):
What are they on farm practices? What's the criteria?

Speaker 3 (01:50):
So I think what we're hearing from our farmers at
the moment is a real desire to understand more about
these changes, what these changes exactly do mean for them,
and I suppose ultimately whether they are in with a
shot at either some of this money from Fonterra or
or more poignantly, the the customer funded money. So that's

(02:11):
what we're hearing from our farmers is exactly those questions.
But if we look at look at practices like stocking rate,
the ability for our cows to be as efficient as
they can be, making sure that they're getting in car
and some of those other green initiatives. My understanding is
that they all contribute to the ultimately number farmers.

Speaker 2 (02:31):
Surely this is surely the way that you would like
to see climate change handled, you know, as an organization,
because it's incentive driven rather than whacking you with a stick.

Speaker 3 (02:42):
I think you're right in that regard, Ryan. I think
our farmer has been asking Fonterierra for some time for
evidence that sustainability will deliver the premiums that have been
talked about. This is this is evidence of that which
I mean within a cooperative you need to balance that
up against against the cooperative nature of Fonterra. So you know,

(03:03):
not not all of our farmers are going to receive
this money, so that will that that may present some
challenges on the other side.

Speaker 2 (03:10):
Is it enough to incentivize them to do that for
next time?

Speaker 3 (03:14):
I think so. But each farm will run a cost
benefit analysis of how they potentially might achieve those numbers
in what investment will be required on farms. So we
already have some right at the top end, and and
they're doing an outstanding job. But for those that aren't
the pressure will come on from here to get alongside them,

(03:37):
show them what they need to do to achieve those figures,
and ultimately whether it's a value proposition worth chasing.

Speaker 2 (03:44):
John, thank you. Obviously not to be scoffed at. John Stevenson,
chair of Fonterra's Cooperative Counsel, that he represents the farmers
in the Deiry Cooperative eleven minutes after Sexy or on
News talk S eDV for.

Speaker 1 (03:54):
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