Cutting emissions on farm is not something unique to New Zealand. It is a global task. At least once or twice a week, I find myself on early morning phone calls with European and North American colleagues discussing carbon transactions and other issues including rules and regulations and how the wider global dairy sector wants to achieve its goals. This has given me a unique insight into how some of our colleagues (“our frenemies”) work with their farmers.
The companies that are particularly relevant to us are FrieslandCampina and Arla Foods in Western Europe, and Dairy Farmers of America and Land O’Lakes in the USA. We are all co-operatives and all grappling with the same issues, looking at large risks and opportunities around how to integrate nature and carbon into what our customers are looking for.
Fundamentally, we all have similar looking emissions profiles, with the bulk of the emissions being generated on farm from milk production. Certainly there are nuances based on our location and farming systems but we’re all taking a co-op approach that means that there are interesting similarities. The Co-operative Difference and Farm Source support is similar to FrieslandCampina’s Foqus Planet programme, and Arla’s Climate Check Programme in that they’re effectively working one-on-one with their farmers, benchmarking them, assessing them, and rewarding them for certain actions behind the farm gate that improve or lower the carbon footprint of milk.
We’re also all responding to having customers that are ambitious in this space and establishing innovative partnership models where customers have a relationship with the co-op to reward and incentivise farmers on the journey to reduce emissions. In the US, which is a very market-driven model, Dairy Farmers of America and Land O’Lakes are connecting farmers to carbon markets through the use of biodigestors on farm (systems that take effluent and turn it into fertiliser and biogas).
Western Europe is closer to New Zealand in terms of on farm support and regulation. While the US is predominantly market driven in its approach, here and in Europe there is the additional social licence component to our work. At My Connect in June, the CEO of FrieslandCampina spoke about some of the freshwater and biodiversity regulations in the Netherlands that are going to be quite challenging for intensive farmers to maintain their current business model. FrieslandCampina is working with farmers to incentivise change and help farmers retain their license to operate and make sure that they’ve got a healthy future.
Arla Foods has additional complexities in that it operates across seven different countries – that’s seven different governments and industry bodies. Here in New Zealand we have a close relationship with DairyNZ. It would be incredibly challenging if we had to establish and maintain close relationships with seven different DairyNZs, all with different strategies and ways of working with farmers. For Arla Foods, what may work in Scandinavian countries may not work in Belgium or Central Europe or the UK. It has taken an agile approach working with farmers from the ground up to ensure their incentive programmes fit the environment its operating in.
The evolution of our partnerships will be interesting to watch and the opportunities for our customers to participate in new focus areas such as biodiversity. We’re all on our own journey but the end goal is the same.