Arla Foods has announced plans to increase financial incentives for dairy producers who reduce greenhouse-gas emissions, introducing six new actions under its FarmAhead Incentive programme starting in January 2027. The cooperative will expand the pool of available incentive points from 84 to 111 and raise the value of each point by 33 percent. From next year, every point will be worth 0.04 euro cents per kilogram of milk, up from 0.03 euro cents.
The programme, which launched in 2023, already allocates up to €550 million annually to reward documented emission-cutting measures. The initiative ties farmers’ scores directly to the milk price they receive, ensuring on-farm actions translate into financial benefits. Since 2020, Arla’s farmer owners have collectively reduced emissions from raw milk production by 1.2 million tonnes of CO₂-equivalent.
The updated programme will include six new categories where farmers can earn points: forage management, manure treatment, biofuel use, low-carbon fertiliser, methane reduction from grazing cattle, and breeding strategies. Existing criteria for feed efficiency, fertiliser application, protein efficiency, and grazing will also be revised based on updated farm data and scientific findings.
Since its launch, participating farms have raised their average incentive score by six points, with higher scores correlating to lower on-farm emissions. Jan Toft Nørgaard, Chair of Arla Foods, stated that the changes reflect the diversity of farming operations. “Farms differ, and so do the opportunities to take action to reduce emissions. With this update, we are giving more farmers more options to move forward in ways that fit their farms,” he said.
Hanne Søndergaard, executive vice-president for agriculture, sustainability, and communication, emphasised the programme’s direct link between climate action and farmer earnings. “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,” she said.
Arla has also committed to reducing its absolute Scope 3 emissions from forestry, land use, and agriculture by 30.3 percent by 2030, using 2020 as the baseline. This target applies to raw milk and externally sourced whey, requiring actual emission cuts rather than reliance on eligible practices alone. The cooperative will provide participating buyers with farm-specific carbon footprints and pathways to support climate-focused initiatives led by farmers.
The revised incentive structure will be implemented in stages throughout 2027, with the first adjusted payments taking effect on January 1. The changes aim to reinforce Arla’s role in promoting sustainable dairy production while offering farmers flexible, data-driven pathways to climate action.