The decision to incentivize the use of GM-free feed was made by Arla’s board of directors following recent developments in Germany, where retailers are increasingly demanding dairy products from cows that have been fed GM-free feed. Arla says the trend is likely to spread to other markets.
According to chairman Åke Hantoft, Arla is well-prepared to meet the growing demand from European retailers for GM-free feed.
“We own the biggest organic milk pool in the world, for which the feed is by default GM free. Our Swedish farmers have always used GM-free feed. This means that around 20% of Arla’s milk pool already meets this market demand," Hantoft said.
He added that Arla is not closing the door on GM and the company will continue to monitor scientific research into the pros and cons of GM going forward.
Compensation could be 1 eurocent per kg milk
Arla said that converting to GM-free feed will involve a cost for the farmers. However, following the price premium that retailers and consumers would be willing to pay, Arla will compensate farmers as they convert. This model, driven by market demand, is also used for organic milk, for which farmers are already compensated for the extra feed cost.
“Our immediate demand is up to 1bn kg extra milk during the next 12 months and we expect to be able to pay an extra 1 eurocent per kg milk. The market-driven compensation will also be paid to all our Swedish farmers, who already use GM-free feed,” said CEO Peder Tuborgh.
The practical challenges in the company and on the farm are still to be investigated.
The genetically-modified feeds currently used are in most cases limited to soy, which on Arla farms covers between zero and 10% of the total feed volume. All soy currently used at Arla farms is covered by certificates to support responsible soy production. Arla said that despite the fact that cows on its farms are fed with limited amounts of genetically-modified soy feed, their milk is defined as GM free, as it can’t be traced to the milk.