Sainsbury’s is set to invest £6 million in its dairy supply chain to better support farmers and secure sustainable milk production.
- In response to the challenges faced by the dairy sector, Sainsbury’s plans to increase payment to farmers by 1p per litre of milk.
- A significant £1.7 million will be allocated to sustainability bonuses, encouraging farmers to meet environmental targets.
- This initiative follows a review by the Sainsbury’s Dairy Development Group, addressing concerns over farmer exits from the sector.
- The investment aims to ensure a long-term, secure supply of milk for consumers, while championing British produce.
Sainsbury’s has announced a £6 million investment into its dairy farming partners, set to roll out from next month. This decision comes against a backdrop of financial pressures and a notable exodus from the dairy sector, with almost 5% of dairy farmers leaving last year. Moreover, projections suggest that up to one in ten farmers could exit by 2025.
The supermarket chain’s initiative includes a £4.3 million allocation to enhance farmer remuneration, specifically through an additional fixed payment of 1p per litre of milk. This payment is supplementary to the existing Cost of Production price, ensuring that farmers can better cover their operational costs. For the typical farm, which produces approximately 2.7 million litres of milk annually, this translates to an increased income of around £27,000 per year.
In an effort to bolster environmental sustainability within agriculture, Sainsbury’s is also directing £1.7 million towards sustainability bonuses. These bonuses are poised to incentivise farmers to contribute to the retailer’s ‘Plan for Better’ targets. Such activities include the adoption of sustainably sourced feed and optimised fertiliser usage, aligning farm practices with broader carbon reduction goals.
Gavin Hodgson, Sainsbury’s director of agriculture, aquaculture and horticulture, has underscored the necessity of this investment. He remarked on the increasing challenges within the dairy industry and highlighted Sainsbury’s role in providing critical support to farmers. Hodgson expressed confidence that this substantial financial commitment will facilitate a sustainable and profitable future for dairy farms, ultimately securing the milk supply for consumers.
With this move, Sainsbury’s reinforces its support for British agriculture, having paid over £66 million to local farmers over the past year. The company is committed to fostering longevity and sustainability in the sector, ensuring that its supply chain remains robust and resilient in the face of industry challenges.
Sainsbury’s investment reflects a strategic effort to strengthen its dairy supply chain, ensuring sustainability and reliability in milk production.
