Dairy company Bega Cheese has created a $25 million fund to lure farmers away from other processors.
The company wants farmers to agree to supply milk for three years in return for money to upgrade farm sustainability and boost growth.
Chief executive Aidan Coleman says Bega will offer cash incentives to farmers on top of their milk price.
“For the environmental program, it’s a commitment of approximately three cents per litre based on this year’s and last year’s milk,” he said.
“Then the farm development or product development program is around about two cents per litre.
“A single farmer may choose to be involved in both or they may choose to be involved in one of them.”
The Bega Cheese offer is for Victorian and New South Wales farmers.
Mr Coleman says he expects farmers will use the money for energy and irrigation upgrades, dairy expansions, purchasing more cows or to increase tree plantings.
He expects 80 per cent of the company’s 500 suppliers will apply for the funds.
The Bega decision comes after Fonterra announced it would simplify its milk pricing and in the wake of Canadian giant Saputo taking over Victoria’s oldest dairy processor, Warrnambool Cheese and Butter.
Meanwhile, Warrnambool Cheese and Butter has officially appointed a new chairman.
The CEO of the Canadian dairy giant, Lino Saputo Junior, was appointed as WCB chairman on Friday.
He takes over from south-west Victorian dairy farmer Terry Richardson, who will remain as a company director.
Saputo holds nearly 88 per cent of shares in Warrnambool.
Source: ABC Rural