Fonterra Says Dairy Farmers Need Special Support When it Comes to Carbon Pricing

Fonterra this week launched a unique guide to provide dairy farmers with practical advice on how to manage the electricity cost increases of carbon pricing.

Oct 27 2011 --- John Doumani, Managing Director of Fonterra Australia New Zealand, said that the unique electricity demands of dairy farmers need to be understood when it comes to carbon pricing and compensation and that his company is advocating for greater assistance for farmers to help them transition to low carbon technologies.

The reality is that dairy farmers engage in energy intensive processing, so they should be eligible for funding to help them adapt.

We have been talking to Government about the special needs of dairy farming and so far, they are very receptive of the message, he said.

The biggest likely impact of carbon pricing for dairy farmers will be electricity price increases. Electricity is a major input cost in dairy farming as energy intensive milk processing starts on the farm. We expect the Government's carbon pricing will have a direct impact of about $3,000 per dairy farm per year on average in terms of increased electricity costs. Predicting this, we want to help our farmers identify ways to reduce electricity use on-farm today, in preparation for a carbon-priced tomorrow.

We accept that a low carbon future is an inevitability - and a challenge that we have to face. But it is also an opportunity to innovate, invest and drive for a more competitive future; with lower costs, improved market access and greater consumer confidence. We have initiated a series of programs to reduce our carbon emissions across our manufacturing operations, and now we are turning our attention to how we can help our farmer suppliers."

Fonterra this week launched a unique guide to provide dairy farmers with practical advice on how to manage the electricity cost increases of carbon pricing. It covers the key areas of on-farm electricity usage and invites farmers to do a self-assessment of their operations.

Mr Doumani said the guide is just the first piece in an overall program to help Fonterra's dairy farmer suppliers in Australia prepare for a new low carbon economy.

We have been engaging with our farmer suppliers here in Australia in conversations around sustainability. What they tell us is that they want to operate a sustainable business and they want to reduce their carbon emissions, especially in light of the additional costs that will be associated with the carbon pricing, but that they don't know how to do it or fund it.

What they want is independent advice from someone who really understands dairying to advise them on what technologies to employ. Farmers are telling us that they are wary of the snake oil salesmen" knocking on their doors offering a whole range of dubious solutions. They are concerned about unproven technologies and capital costs necessary to implement change," he said.

The guide includes a calculator to help farmers consider their likely electricity bill increases and a selfassessment tool so they can understand how their operation rates against best practice electricity usage.

In addition, practical energy saving advice is provided across seven key areas:

* Hot water heating
* Milk cooling
* Vacuum pumps
* Water and effluent pumps
* Lighting
* Energy sourcing
* Cleaning systems

Fonterra is also running information sessions for farmers and providing expertise to assist with on-farm assessments.