A Fonterra-Nestlé partnership to run a net-carbon-zero dairy unit in Taranaki ratchets up expectations on New Zealand dairy farmers to fall in line with growing pressure from global food giants to meet customer demands.
A bevy of political and industry heavyweights announced the launch of the Fonterra-Nestlé initiative at Fieldays at Mystery Creek, with Prime Minister Jacinda Ardern heralding the project as a first for NZ and one that will give farmers the tools to meet zero-carbon expectations.
“We know we have to reduce our biogenic emissions from agriculture if we are to meet our global obligations and our customers’ demands,” she said.
She said her recent experiences travelling with assorted trade delegations and Minister of Agriculture Damien O’Connor had allowed her to see first-hand the expectations held in those markets when it comes to meeting zero-carbon goals.
“We have to lead the charge and the rest of the world is waiting for us to show them how it is done,” she said.
Fonterra CEO Miles Hurrell told the gathered shareholders the dairy unit, which is being run with partner Dairy Trust Taranaki, will have some tough and ambitious goals to meet in coming months and years.
“This new partnership will look at ways to further reduce emissions, increasing the country’s low-emissions advantage over the rest of the world,” he said.
Nestlé is Fonterra’s largest and most important global corporate customer and has declared the goal of reducing its Scope 3 emissions as part of its goal of net-zero emissions by 2050.
Scope 3 emissions are those emissions beyond the company’s immediate processing operations, extending to suppliers including farmers.
Nestlé NZ CEO Jennifer Chappell said dairying is the company’s single biggest ingredient. With two thirds of global emissions coming from agriculture, and half of those from dairying, global action by the company is imperative.
The farm will be a test base for management and technology tools that will ultimately be made available to all dairy farmers.
“Ultimately what we want is that what we learn here will become part of mainstream farming,” she said.
O’Connor said while customers are not always right, they are “usually pretty right” and with Nestlé among Fonterra’s biggest customers, they have to be listened to.
“You cannot ignore their commitment to net carbon zero by 2050,” he said.
The project will last five years and be run on a 290ha demonstration farm surrounding Fonterra’s Whareroa factory site.
It’s the first of its type in NZ, but Nestlé has more than100 pilot projects running with partners around the world, including 20 net-zero demonstration dairy farms in places as varied as South Africa and Germany.
The joint announcement is another signal to pastoral farmers in NZ that regardless of He Waka Eke Noa wrangling, market pressures are ushering in net-carbon-zero targets quickly, with processors responding to corporate customers’ demands.
Last week Tesco’s sustainability manager, Alice Ritchie, told Farmers Weekly that while the retail chain is very much focused on its domestic meat supplies to meet a net-carbon-zero target, it will also be holding its NZ farmer suppliers to the same standards.
She said sustainability and zero carbon are rapidly becoming embedded in the right to operate, regardless of the food’s source.
This week Silver Fern Farms chair Rob Hewett said NZ has one of the best opportunities of any nation to become net carbon zero for its food production – but failing to do so would mean NZ would struggle to position itself to remain competitive.