Cooperative Sustainability : a study of Arla’s Sustainable Incentive Model

Sammanfattning: The agricultural industry is a large contributor to greenhouse emissions and therefore faces new challenges to implement sustainable practices. The rising societal demand for sustainability makes the agricultural sector dependent on working towards environmentally friendly practices. Agricultural cooperatives make up a large portion of the sector and are therefore an important actor towards creating sustainable and robust food production. However, cooperatives are owned for the benefit of their members, which raises the question how cooperatives can involve their members in sustainable actions. The aim of this study is to gain a better understanding of how farmers of a cooperative view sustainable incentives, as well as if it affects their investments on the farm. To achieve the goal of this study, a case study of the farmers of Arla Food was carried out. Arla recently implemented an incentive model that rewards their members for sustainable actions on their farms. The model was implemented as an effect of Arla setting out to reach their sustainability goals. The study uses an exploratory design with a qualitative case study. Interviews were conducted with members of Arla to gain an understanding for their opinions on the incentive model. The findings from the interviews were then analyzed using the conceptual framework consisting of the concept of a cooperative, agency relationship and organizational change. The findings of the study suggest that incentive models can be used by cooperatives to implement sustainable change on the farm. However, it indicates the importance of sharing information with the members as well as possible new risks such as investments. It is unclear if incentive models like the one implemented by Arla are the future for cooperative sustainability, however, it can be stated it has the possibility to affect the members views and trust of the cooperative. This study contributes to understanding how the members of an agricultural cooperative are affected by sustainable decisions.