Tesco has announced new financial incentives for more than 400 British farmers, in a move it claimed could see them benefit from more than £10m in additional payments in the first year alone.
From next month 260 UK dairy farmers, belonging to the supermarket’s Sustainable Dairy Group (TSDG) and who supply milk through Müller UK, will earn up to an extra 2.5p per litre of milk if key targets on emissions reduction, animal health, feed conversion efficiency and genetic improvements are achieved.
The group will also take part in a “baselining” exercise over the next year to establish targets for soil, water and biodiversity improvements.
Tesco said it was using additional financial incentives and data collection to achieve key environmental and animal welfare goals.
It estimated farmers could benefit from more than £9.5m worth of additional payments in the scheme’s first year.
Sustainable farming programmes
The move comes after Tesco announced the Future Dairy Partnership last year, alongside Müller UK and Arla. The partnership aims to trial new innovations in the sector to reduce emissions, improve animal welfare and protect nature.
Tesco is also introducing similar incentive plans for other sustainable farming groups. Up to 160 farmers in the Tesco Sustainable Lamb Group (TSLG) will benefit from bonus payments for the planting of herbal leys, while Tesco Sustainable Pig Group (TSPG) farmers are set to earn incentive payments across a number of metrics, including animal welfare improvements, biodiversity and soil health, and emissions reduction. The moves follow similar payments for farmers in the Tesco Sustainable Beef Group (TSBG).
The retailer said it was acting on farmer feedback it collected as part of its Greenprint for UK Farming report, which set out recommendations for government and the industry to ensure a transition to a low-carbon UK agriculture sector.
One of the key recommendations was exploring new payment models and incentives.
“Earlier this year, as part of our farmer-led Greenprint for UK Farming report, we published a set of recommendations for the government and industry aimed at ensuring the UK agriculture sector is equipped to transition to a low-carbon future,” said Tesco UK CEO Ashwin Prasad.
“A key area identified by farmers was the introduction of incentive schemes to help achieve our shared sustainability goals. These incentives will play a crucial role in ensuring our farmers remain economically and environmentally sustainable for the long-term.”
Dave Jones, TSDG chairman and Tesco dairy farmer, said: “The group has continually reduced our carbon footprint over the years, and while this has been recognised, it’s great to now get a payment to reward this and fund future carbon reductions. This should leave us well placed to meet our future industry targets.
“As farmers and members of the Tesco Sustainable Dairy Group, we have worked on this with Tesco and Müller UK. I believe the template is well balanced to include carbon reduction, improved genetics, feed efficiency, animal health and welfare, and improved biodiversity.”
Rob Hutchison, CEO of Müller Milk & Ingredients, added: “We want to build a better future for the British dairy sector, and programmes like this will make a real positive impact.”
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