Performance-related sustainability premium for FrieslandCampina member dairy farmers

17 December 2014

On 16 December 2014, the Board of dairy cooperative FrieslandCampina U.A. informed the Members’ Council of the cooperative of forthcoming changes to the milk supply in relation to Foqus planet, FrieslandCampina’s new quality and sustainability programme. With effect from 2015, member dairy farmers will be paid a premium based on their sustainability performance. The outdoor grazing premium will also be increased. The Members’ Council has additionally agreed to amend the milk payment regulations and the statutes.

FrieslandCampina’s quality and sustainability programme, Foqus planet, is switching from a system based on performance categories and points for sustainability gains to a system based on tighter basic requirements, including a grace period and a reward for  strong sustainability performances. One consequence of these tighter basic requirements will be a ban on the use of compost and composted material from 1 January 2015. If member farmers do not (fully) satisfy these basic requirements, they will be given a four-week grace period in which to rectify the situation. Failure to do so will result in the rejection of their milk. Unannounced spot checks will also be carried out. Use of the Recycling Indicator (KringloopWijzer) will be mandatory for dairy farms with a phosphate surplus.

Foqus planet premium
FrieslandCampina intends to use its Foqus planet strategy to help it meet the relevant sector targets by 2020. In 2015 it will therefore start applying six indicators for animal health and welfare, biodiversity & environment and climate & energy, the results for which are measureable. This will ensure that results rather than measures are rewarded. Points will be given for the results posted under each indicator, and together these will yield an aggregate score. The level of premium paid will depend on the overall volume of milk supplied and the total number of points gained. The premium will be financed through a pro forma deduction of 0.25 euros per 100 kg of milk supplied.

Outdoor grazing premium increased
FrieslandCampina will extend its existing outdoor grazing policy in 2015, and the contribution for pasture grazing will be increased to 1 euro per 100 kg of milk. This increase, which will be charged on top of the contribution of 0.50 euros per 100 kg of milk from the business, will be funded by a cooperative scheme. The deduction charged will be 0.35 euros per 100 kg of milk. This means that dairy farms with no outdoor grazing policy will be asked to contribute to its preservation. The contribution for partial outdoor grazing will be increased to 0.46 euros per 100 kg of milk.

The changes to the milk and organic milk payment regulations will apply to the aforementioned deductions. The changes to the statutes consist mainly of textual improvements and incorporate legislative amendments.