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Sainsbury’s dairy farmers will be paid more from next month following a further £6m annual investment made by the supermarket chain to support farms for the future.
This latest investment in dairy pay is on top of an £8.9m booster payment given to SDDG farmers in April last year.
Some £4.3m of this new investment will go towards giving farmers an additional fixed 1p per litre for milk on top of the independently calculated Cost of Production price that the retailer currently pays to farmers.
With the typical volume of milk produced per year per farm being roughly 2.7 million litres, this means the average farm could receive around £27k extra per year.
This comes as recent reports have shown that due to rising costs, almost 5% of dairy farmers left the industry last year and one in 10 believe they will have left the sector by 2025.
Acknowledging the increasing volatility of input costs and high level of capital investment required by dairy farmers, Sainsbury’s undertook a year-long review, with the support of its Dairy Development Group (SDDG), into how it pays farmers for milk.
Alongside the investment in the new price model, the retailer has also committed £1.7m for sustainability bonuses, which will reward farmers for helping the supermarket to achieve its carbon reduction targets.
Gavin Hodgson, director of agriculture, aquaculture and horticulture at Sainsbury’s, said: “The dairy farming industry is becoming increasingly challenging and we recognise the responsibility we have as a retailer to support farmers and the need for continuous investment in this sector.
“We are proud of our continued investment into the Sainsbury’s Dairy Development Group and are confident our £6m annual investment will help farmers to plan for a long-term and sustainable future. In turn, we hope this will also provide surety of supply for our customers as we continue to champion British milk now and for the future.”
