Arla Foods is expanding its FarmAhead Incentive scheme, giving dairy farmers more opportunities to earn financial rewards for reducing the climate impact of milk production on their farms, with the number of available points increasing by more than 30% from 2027.
The farmer-owned cooperative will increase available points from 84 to 111 and raise the value of each point by a third, from €0.03 to €0.04 per kilogramme of milk.
The changes represent the biggest update to the programme since its launch in 2023. The scheme links documented actions to reduce on-farm greenhouse gas emissions directly to the milk price paid to participating farmers, with up to €550 million annually underpinning the financial incentives.
Arla said its farmer owners had reduced absolute emissions from raw milk production by 1.2 million tonnes of CO2e since 2020. Average FarmAhead incentive scores have also risen by six points since the programme began, with the cooperative reporting a strong link between higher scores and lower on-farm emissions.
Six new action areas will be introduced: forage; manure treatment; biofuels; low-carbon fertiliser; reducing methane emissions from grazing cows; and breeding.
The cooperative will also adjust existing criteria covering feed efficiency, fertiliser use, protein efficiency and grazing, using updated farm data and scientific evidence to reward measures with the greatest potential climate impact.
Hanne Søndergaard, executive vice-president of agriculture, sustainability & communication at Arla Foods, said the expansion would help translate new technology and knowledge into practical farm-level action.
“Now we are taking our biggest step forward since launch, providing more ways for farmers to act and ensuring a higher reward for every point they earn,” she said.
Jan Toft Nørgaard, chair of Arla Foods, said the changes would give farmers additional opportunities to improve their performance, including those already achieving maximum points in parts of the existing model.
Arla also expects the changes to strengthen its work with retail and foodservice customers through ‘FarmAhead Customer Partnerships’. The programme enables customers to support farmer-led climate action and access primary carbon-footprint data to track reductions across their value chains.
“Our customers want measurable reductions in the footprint of the dairy they buy, and they want to work with us to achieve them,” Søndergaard said.
The update has been approved by Arla’s board of directors, with the first payments under the revised model due to take effect from 1 January 2027.
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[image credit: Green Retail World]
