After pressure from environmental groups, Fonterra has pledged to source its palm products from suppliers who do not cut down rainforests.
The announcement follows one earlier this week from Landcorp, which said it was stopping all use of palm kernel expeller (PKE) on its dairy farms from June 2017.
“It’s really great news – Fonterra is a big company and therefore this will have a big impact,” Greenpeace spokesman Grant Rosoman said.
Fonterra imports a third of New Zealand’s PKE supplementary feed through its subsidiary Farm Source. To June 2016, New Zealand imported 1.86 million tonnes of the feed, a by-product of the palm oil industry.
The dairy giant also uses palm oil in a variety of foods such as infant formula.
Fonterra’s director of social responsibility, Carolyn Mortland, said it had developed a new standard following discussions with Greenpeace that began in December last year.
“The new standard requires us to purchase only segregated supply palm oil by 2018, and to work with suppliers of palm products to ensure that plans are in place for full traceability to plantation by 2018,” Mortland said.
“We want to ensure that there is no risk of deforestation within our supply chain. This standard aims to ensure the fair and ethical treatment of suppliers and to protecting conservation values.”
Fonterra already uses a single source provider, Wilmar International, which has a “no-deforestation, no-exploitation” policy, Mortland said.
Rosoman said Wilmar controlled 44 per cent of the global palm product trade. It owns New Zealand companies Chelsea Sugar and Goodman Fielder.
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Farm Source chief operating officer, Miles Hurrell, said for some farmers PKE was important, especially as grass quality declined over a season or during bad weather such as drought.
Fonterra also currently has a guideline recommending the maximum use of 3kg of PKE per cow per day.
“We know that our pasture-base production gives us a competitive advantage in global markets, and we need to protect that,” Hurrell said.
Rosoman said Greenpeace would now put pressure on the other companies that import PKE. They include Matamata-based J.Swap Stockfoods and Farmlands.
By: Gerard Hutching
Source: Stuff.co.nz