Sainsbury’s commits £6m to support dairy farmers and enhance sustainability.
- Nearly 5% of dairy farmers exited the sector last year due to financial pressures.
- A year-long review led to a revised payment strategy for milk producers.
- Farmers will receive a fixed 1p per litre increase to current milk payments.
- Additional sustainability bonuses aim to encourage environmentally friendly practices.
In a strategic move to counteract the financial difficulties faced by its suppliers, Sainsbury’s has announced a substantial investment of £6 million aimed at supporting dairy farmers. This initiative emerges in the wake of a troubling trend where approximately 5% of dairy farmers left the industry last year, with a forecast indicating a potential 10% exit by 2025. As market conditions continue to challenge profitability, this investment represents Sainsbury’s response to stabilise the industry and ensure future viability.
The financial package allocated by Sainsbury’s includes a direct increment of 1p per litre of milk, a figure established following an extensive year-long review conducted in conjunction with the Dairy Development Group. This adjustment supplements the Cost of Production price that is currently in place, promising farmers an average additional income of £27,000 per annum based on the typical production volume of 2.7 million litres per farm. This measure underscores Sainsbury’s recognition of the critical role its suppliers play in its supply chain and its commitment to sustaining British agriculture.
Moreover, Sainsbury’s has designated £1.7 million of the investment towards promoting sustainable agricultural practices among its dairy suppliers. This component of the investment will be allocated as bonuses to farmers who align with Sainsbury’s ‘Plan for Better’ by implementing carbon reduction practices. These include the use of sustainably sourced feed and optimised fertiliser usage, crucial steps towards reducing the environmental footprint of milk production.
Gavin Hodgson, Sainsbury’s director of agriculture, aquaculture, and horticulture, articulated the retailer’s strategic vision, stating, “The dairy farming industry is becoming increasingly challenging and we recognise the responsibility we have as a retailer to support farmers and the need for continuous investment in this sector.” Hodgson expressed confidence that the investment would help farmers secure a sustainable future, which would in turn assure Sainsbury’s customers of consistent milk supply.
Overall, through this initiative, Sainsbury’s seeks not only to bolster the economic fortunes of its dairy suppliers but also to foster long-term sustainability within the agricultural sector. By linking financial incentives to sustainable practices, Sainsbury’s is positioning itself as a proactive player in transforming the industry amidst evolving environmental and economic demands.
Sainsbury’s £6m investment exemplifies a strategic commitment to both farmer support and sustainable agriculture, vital for future sector stability.
