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

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

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  Speaker 1: right now.
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  Speaker 2: If they keep it green, they'll get the gold. Fonterra
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  Speaker 2: is offering its dairy farmers an extra one to five
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  Speaker 2: cents per kg of milk solids to get the payment
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  Speaker 2: their emissions. Yes, the climate emissions need to be lower
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  Speaker 2: than they were in twenty seventeen, and based on how
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  Speaker 2: Fonterra's farms met climate criteria last season, they're expecting around
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  Speaker 2: five thousand farmers should qualify for this plus. But wait,
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  Speaker 2: there's more. If a farm's emissions are thirty percent lower
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  Speaker 2: than the average Mars and Nessley, which is where all
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  Speaker 2: this money is coming from, the contract done with them
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  Speaker 2: will drop in an additional ten to twenty five cents
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  Speaker 2: perkg of milk solids. John Stevens is the chair of
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  Speaker 2: Fonterra's Cooperative Council. He's with me Hi John, Good evening, right,
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  Speaker 2: what do you make of this?
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  Speaker 3: I think it's big news for our farmers. It's certainly
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  Speaker 3: a significant amount of extra funding and recognition of their
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  Speaker 3: high quality milk, and it will make a material difference
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  Speaker 3: to those farmers that receive.
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  Speaker 2: It, So put it in context, next to one to
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  Speaker 2: five cents per kilogram of milk solids might not sound
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  Speaker 2: like much to people. What will it well, what could
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  Speaker 2: it mean to your average farmer?
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  Speaker 3: I think what it could mean will depend on their production.
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  Speaker 3: But for an average farm, you know, we could we
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  Speaker 3: could see, we could see recognition there in and around that,
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  Speaker 3: you know, sort of ten to twenty thousand dollars MARC
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  Speaker 3: depending on the achievement. And I think it's important to
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  Speaker 3: note that there there is a range within that, so
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  Speaker 3: you know that that will depend on on on farm practices.
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  Speaker 2: What are they on farm practices? What's the criteria?
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  Speaker 3: So I think what we're hearing from our farmers at
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  Speaker 3: the moment is a real desire to understand more about
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  Speaker 3: these changes, what these changes exactly do mean for them,
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  Speaker 3: and I suppose ultimately whether they are in with a
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  Speaker 3: shot at either some of this money from Fonterra or
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  Speaker 3: or more poignantly, the the customer funded money. So that's
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  Speaker 3: what we're hearing from our farmers is exactly those questions.
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  Speaker 3: But if we look at look at practices like stocking rate,
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  Speaker 3: the ability for our cows to be as efficient as
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  Speaker 3: they can be, making sure that they're getting in car
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  Speaker 3: and some of those other green initiatives. My understanding is
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  Speaker 3: that they all contribute to the ultimately number farmers.
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  Speaker 2: Surely this is surely the way that you would like
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  Speaker 2: to see climate change handled, you know, as an organization,
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  Speaker 2: because it's incentive driven rather than whacking you with a stick.
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  Speaker 3: I think you're right in that regard, Ryan. I think
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  Speaker 3: our farmer has been asking Fonterierra for some time for
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  Speaker 3: evidence that sustainability will deliver the premiums that have been
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  Speaker 3: talked about. This is this is evidence of that which
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  Speaker 3: I mean within a cooperative you need to balance that
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  Speaker 3: up against against the cooperative nature of Fonterra. So you know,
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  Speaker 3: not not all of our farmers are going to receive
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  Speaker 3: this money, so that will that that may present some
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  Speaker 3: challenges on the other side.
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  Speaker 2: Is it enough to incentivize them to do that for
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  Speaker 2: next time?
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  Speaker 3: I think so. But each farm will run a cost
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  Speaker 3: benefit analysis of how they potentially might achieve those numbers
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  Speaker 3: in what investment will be required on farms. So we
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  Speaker 3: already have some right at the top end, and and
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  Speaker 3: they're doing an outstanding job. But for those that aren't
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  Speaker 3: the pressure will come on from here to get alongside them,
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  Speaker 3: show them what they need to do to achieve those figures,
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  Speaker 3: and ultimately whether it's a value proposition worth chasing.
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  Speaker 2: John, thank you. Obviously not to be scoffed at. John Stevenson,
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  Speaker 2: chair of Fonterra's Cooperative Counsel, that he represents the farmers
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  Speaker 2: in the Deiry Cooperative eleven minutes after Sexy or on
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