(Reuters) – New Zealand dairy group Fonterra said on Thursday food and beverage giant Nestle will make additional payments to its farmers for achieving certain sustainability goals under a new agreement.
Depending on the number of Fonterra farmers achieving one of the three levels of the company’s sustainability goals during the 2023-24 season, Nestle is expected to pay an additional 1-2 New Zealand cents per kilogram of milk solids (kgMs) under the agreement.
Fonterra’s fiscal 2024 forecast for farmgate milk price – the price it pays to farmers – is between NZ$7.00 and NZ$8.00 per kgMS.
“Nestle has sourced dairy from New Zealand for well over a hundred years and we will continue supporting farmers, alongside our partners, to develop new economic opportunities and reduce their greenhouse gas emissions,” Nestle New Zealand CEO Jennifer Chappell said.
Fonterra, which aims to be net zero by 2050, launched “Co-operative Difference Payment” programme in 2021 under which farms that sustainably produce higher quality milk will be paid slightly differently for milk solids.
(Reporting by Neha Soni in Bengaluru; Editing by Subhranshu Sahu)