Friesland­Campina gives financial boost to drive sustainability on the farm

In line with the cooperative strategy ‘Towards 2030', the Cooperative Board of FrieslandCampina worked closely together with member dairy farmers on a new system for the Foqus planet sustainability programme. To accelerate sustainability, efforts on the farm will be rewarded in a more targeted way and each farm can pick and choose in which themes it wants to excel. The board's proposal will be discussed with members during the fall member meetings. Also, starting in 2023, more financial resources from the company will be made available to drive integral sustainability, with a focus on climate. In addition, as a result of the three-yearly evaluation, milk price regulations will be updated.

Sybren Attema, Chair of Zuivelcoöperatie FrieslandCampina U.A.: "From the discussions with district council members and the spring dialogue with our members, it has become clear that many dairy farmers are willing to make their farms more sustainable, provided that they receive fair compensation. Therefore, as a board, we are committed to increase financial incentives for sustainability on the farm. With the renewed system, we ensure a fair distribution of available funds, stimulate commitment to collective sustainability requirements and set members in motion on sustainability requirements of tomorrow's market."

Focus on climate

Moving forward FrieslandCampina wants to reward more on collective sustainability goals that are important for the cooperative as a whole, with freedom of choice for the individual dairy farm. The renewed system will make it possible for the cooperative and the company to determine which sustainability goals should be the focus in a given period. Currently, climate is an important theme for acceleration (see FrieslandCampina's climate plan). Therefore, the proposal is to reward dairy farmers additionally on sustainability results achieved in the field of climate-related indicators. Dairy farmers can earn an amount of up to 1.50 euros per 100 kilos of milk, depending on the improvement in lowering greenhouse gas emissions.

Accelerate together

FrieslandCampina uses the Foqus planet quality and sustainability programme to encourage member dairy farmers to make their farms more sustainable. The programme gives dairy farmers the opportunity to use their own strengths and capabilities to contribute to the goals set for the various themes. These goals are: climate, biodiversity, animal health and welfare, and outdoor grazing. With the proposed new Foqus planet system, it will be clear to members in advance where the focus lies and what kind of results will deliver in tangible euros. This will make it more attractive for dairy farmers to take even more steps towards sustainability and where necessary, to step up and invest.

Updating milk price regulations

Following the three-yearly evaluation of milk price regulations, a number of adjustments are proposed for 2023-2025. In recent years, FrieslandCampina has invested heavily in the processing of fat. As a result, the need for milk fat has increased. The proposal is to value fat more as a milk component and to change the ratio of components to protein (6), fat (4), and lactose (0). Currently, the guaranteed price is paid in the fixed ratio of protein (10), fat (5), and lactose (1). The proposal is to also update the standard contents, based on the actual supplied contents delivered in 2021. This means that from 2023, the guaranteed price will be published per 100 kilos of milk with 3.58% protein, 4.45% fat and 4.54% lactose. The reservation policy will remain unchanged. This means that 40 percent of the net profit will be subsequently paid in cash to the members. Sixty percent will be added to the company's equity capital.

Expansion of the operating area

As part of the previously announced opening of the cooperative to new members, the proposal is to expand the operating area of the cooperative in Belgium in the Aalter region and in North Antwerp/North Limburg by January 1, 2023. In Germany, the cooperative wants to expand its operating area to include part of the state of Lower Saxony in northern Germany in the second half of 2023. This means that dairy farmers who have their farms in these areas will be able to supply milk to FrieslandCampina after joining Zuivelcoöperatie FrieslandCampina U.A.

The fall member meetings will run from Oct 18 until Nov 8. Decision making on the proposed adjustments will follow in December 2022.