Fonterra hopes to bring about 150 new dairy farms into organic production during the next three years.

It is encouraging dairy farmers to convert to organic production by offering a seven per cent premium on milk solids payouts for the three years it takes to get certified, and then pay a 20 per cent premium once certified.

In releasing its organic plan, Fonterra says it aims to have 200 farms supplying 170 million litres of full organic milk production by 2013.

The plan is aimed primarily at the Waikato because most of New Zealand’s certified organic farms are already located there and in the Bay of Plenty. A transport pricing system will be used to balance supply from outside the Waikato.

According to dairy industry officials, at least a million litres of milk at the peak of the season would be required to make organic exports cost effective — at least 260 farms in a concentrated area.

Fonterra will provide workshops, focus/monitor farms and an information resource. Each farm will get four visits in the first year.