Dutch dairy farmers could see the payment for milk produced from grazed grass increase as FrieslandCampina plan to rise its outdoor grazing premium.

The dairy processor wants to increase its outdoor grazing premium to 1.5c per 1kg of milk to allow member dairy farmers to better connect with the market.

It is also proposed to abolish the quantum allowance, to lower the seasonal payments to 0 euro and to adjust the reservation policy.

Increasing its outdoor grazing premium

In order to further stimulate outdoor grazing, FrieslandCampina proposed to the member dairy farmers to increase the outdoor grazing premium by 50c to €1.50 per 100kg milk.

The cooperative regulations of FrieslandCampina around milk payment composition and profit sharing are evaluated every three years and established for a three-year period.

For the business to prosper it is important that the company continues to improve in the future, according to Piet Boer, Chairman of Zuivelcoöperatie FrieslandCampina U.A.

“For the success and the continuity of the member dairy farms, the co-operative and the company it is important to keep performing well and to make improvements in the areas of chain quality, transparency, sustainability and outdoor grazing,” Boer said.

The adjustments will be discussed during the member meetings held in autumn 2016.

Other adjustments being discussed relate to the quality and sustainability programme Foqus planet, according to the FrieslandCampina.

In 2015, 77.9% of the 12,618 dairy farms of members of the processor applied some form of outdoor grazing, an increase of 2.5% from 2014.

The aim, however, is to have 81.2% of the Dutch dairy farms supply meadow milk to FrieslandCampina in the year 2020, according to dairy processor.

This increase will see meadow milk supply levels return to 2012 figures, with the price jump being financed by the company.

Abolishment of the quantum allowance

It is also proposed to the members to abolish the quantum allowance. The initial purpose of the quantum allowance was to maintain a well-balanced composition of the membership and, moreover, to remain attractive to large dairy farms.

The evaluation of the arrangement showed that it does no longer serve this purpose, according to the dutch processor.

It is also proposed to lower seasonal payments to 0 euro, because most farmers do not take it into account in running their business.