Comprehensive sustainability strategy for FrieslandCampina dairy farmers in the pipeline

30 September 2010

The FrieslandCampina dairy cooperative plans to develop a comprehensive sustainability strategy for its member dairy farmers. Encouraging outdoor grazing for cows is an important element of this strategy. The first phase of this comprehensive sustainability strategy is due to take effect on 1 January 2012.

This is what the Board of the FrieslandCampina dairy cooperative is proposing to the member dairy farmers. There are two motivating factors behind this proposal. On the one hand, the three-year evaluation of cooperative rules is due to take place this year. On the other hand, a group of members, based on the right of initiative of the cooperative, has asked the Board to include the amount of the current payment for outdoor grazing on the agenda.

Outdoor grazing for dairy cows is essential to the image and acceptance of milk as a product and of dairy farming as a sector. In this context, the Board of FrieslandCampina believes that encouraging outdoor grazing should be part of a cohesive sustainability agenda.

The underlying principle is that dairy farmers themselves opt for outdoor grazing and the extent to which this takes place. In recent years, FrieslandCampina has put in place various initiatives to encourage outdoor grazing. Currently, some 80 percent of the cows of member dairy farmers graze outdoors. The decline in the number of cows grazing outdoors seems to have been halted, but the pressure remains. This is related to the environmental policy and the structural development in dairy farms, which is affected by international competition and the liberalisation of agricultural policy. Pending the new sustainability strategy, the Board is proposing not to change the outdoor grazing premium for 2011 and to keep it at 0.05 euros per 100 kilograms of milk.

Other rules
In the context of the three-year evaluation of the cooperative rules, the Board is proposing to make some adjustments to the season rule to make it simpler and more transparent. This rule encourages dairy farmers to supply more milk in the autumn and late summer and less milk in the spring.

The Board is also proposing a change to the rule for allocating fixed costs and the volume surcharge to the members. Just like the outdoor grazing rule, this rule was also included in the three-year evaluation and initiatives were submitted about it. The proposal essentially involves a reduction in the volume surcharge for larger companies, linked to an increase in the fixed cost allocation for all dairy farmers. There is a cap for very small dairy farms.

Discussion with members
The Board of the FrieslandCampina dairy cooperative will discuss these proposals in the autumn with the member dairy farmers of the cooperative. On 15 December 2010, the Member Council of FrieslandCampina will decide on the changes to the season rule and the rule for withholding fixed costs and the volume surcharge. The Member Council consists of 210 dairy farmers, who have been chosen by the member dairy farmers as their representatives.