Arla Foods expands farm climate incentive programme with new action areas

DENMARK – Arla Foods has expanded its FarmAhead Incentive program by adding six new action areas and increasing financial rewards for farmers to help reduce emissions from milk production.

The updated scheme, which will be introduced in stages from 2027, will increase the number of available points from 84 to 111 and raise the value of each point by one-third, from €0.03 to €0.04 per kilogramme of milk.

The changes mark the largest update to the programme since it launched in 2023. Arla said the expansion aims to accelerate on-farm emissions reductions by giving its farmer owners more opportunities to take climate action and receive financial rewards.

Under the FarmAhead Incentive model, farmers earn points for documented actions that are scientifically linked to reducing greenhouse gas emissions.

These points directly influence the price they receive for their milk, with up to €550 million annually allocated to incentivising climate action.

Arla said its farmer owners have reduced absolute emissions from raw milk production by 1.2 million tonnes of carbon dioxide equivalent (CO₂e) since 2020.

The expanded programme will introduce six new action areas covering forage, manure treatment, biofuels, low-carbon fertiliser, methane reduction in grazing cows and breeding.

Existing measures will also be adjusted, including those relating to feed efficiency, fertiliser use, protein efficiency and grazing.

The update draws on the latest farm data, scientific knowledge and developments in on-farm technology, with the aim of rewarding practices that deliver the greatest climate impact.

Since the programme’s launch, Arla’s farmer owners have increased their average incentive score by six points. According to the cooperative, its data show a strong link between higher scores and lower on-farm emissions.

Hanne Søndergaard, Executive Vice-President of Agriculture, Sustainability and Communication at Arla Foods, said: “With FarmAhead Incentive, we link actions to reduce the climate impact of milk production on farm directly with the milk price paid to our farmers. That is a powerful way for a farmer-owned cooperative to drive change.”

The programme also supports Arla’s work with customers through its FarmAhead Customer Partnerships initiative.

These partnerships enable customers to support farmer-led climate action and access primary carbon footprint data that can be used to substantiate sustainability claims.

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