Fonterra ought to focus more on punishing farmers who pollute or abuse their livestock, a farming leader says.
Commenting on the dairy giant’s new strategy called the Co-operative Difference, Federated Farmers Golden Bay president Wayne Langford said he believed a “bigger stick” needed to be used on poor performing farmers.
Fonterra has announced it will reward the best farmers by “recognising” them, although it will not pay them a premium for their milk, as Synlait and Miraka do.
It would punish poor farmers by suspending milk collection but did not say what other measures it would introduce, other than “taking a firmer line with those that persistently fail to meet minimum standards”.
A farmer with the average herd size of 414 would suffer a loss of about $5000 a day if Fonterra refused to take his or her milk, Langford estimated.
Fonterra has been increasingly exercising its right not to take milk. In 2017, it suspended collection from 78 farms, rising to 106 last year, but gave no details as to how many days each farmer suffered not having their milk picked up.
Co-operative affairs managing director Mike Cronin said more details of the strategy would be announced in May.
However, he outlined some of the ways farmers might be rewarded who went beyond the minimum requirements to supply high-quality milk, care for their animals, protect the environment, support their people and community, and engage in their co-operative.
These included: a certificate, plaque or award; a digital dashboard and annual scorecard; regional recognition such as local award events; farm recognition by way of gate signage; mention in a publication such as an annual report; Farm Source reward dollars and access to exclusive products with Farm Source reward dollars.
“Sustainability for our co-op is about more than the environment. It’s about looking after our people, caring for animals, adapting to changing customer and consumer expectations, and respecting the communities and land where we live and work,” Cronin said.
Waikato farmer Rod McKinnon said he would prefer to see Fonterra move towards a system of rewarding farmers with a premium price.
“The hope is there will be a financial reward but extracting the value from milk is the hardest part. But the intention of the co-op is to do that, when they can prove they are earning something from a specific product.
“Synlait does it with their ‘lead with pride’ programme but they could easily be taking some of the payout off one farmer and giving it to another. As a co-op we can’t do that,” McKinnon said.
But he said he was fully supportive of farmers being taken to task for polluting or abusing animals.
“There are farmers who are dragging the chain and that’s having an impact on our social licence to operate.”
Langford said he was cautious about having a system where some farmers were paid more than others.
“Lifting the value of our milk shouldn’t be done through rewarding our top farmers because as soon as you do that you send a message to other farmers that their milk isn’t as good.
“All our milk goes into the same tank and gets made into the same product. We just need to reach a standard and if we achieve that we ought to tell people they are making a great quality milk,” Langford said.
Fonterra said the Co-operative Difference was developed in consultation with farmers who wanted their co-op to simplify and reduce complexity of requirements, provide direction on priority on-farm improvements, and increase pride in the co-op by recognising high performing farms in a way that aligned with its values.
However one farmer who did not want to be named said he attended a meeting on the subject where the majority called for harsher penalties for wrongdoers, rather than awards for good farmers as there were enough of those already.