Rabobank - past and present
Cam in practice
Small is
productive
ployed in agriculture or related in
dustries (compared with 15 per
cent in 1950). Although increas-
ingly less people work directly on
the land, this has been more
than compensated by the devel-
opment of a large food and drink
sector. This accounts for no less
than 29 percent of total Dutch in-
dustrial turnover, and combined,
these sectors generate an an-
nual turnover of around NLG 36
billion, or about 6 percent of GNP.
Over 75 percent of this produc
tion is exported, primarily to
markets in Germany, the United
Kingdom, France and Scandina-
via. However, the Dutch are
world market leaders in flower
and bulb export - a position
they have held and Consolidated
over the last three decades.
In addition, a spin-off export
activity is also gaining ground.
The Dutch's high-tech agricul-
tural know-how is fast becoming
a profitable commodity. Tech-
niques for glass and intensive
cultivation systems, selective
breeding and stock-raising are
increasingly in demand abroad.
Although lack of space prevents
more than a summary overview
of how the Dutch captured such
a major place in international
food and agribusiness, this may
go some way to explaining the
background to the bank's long-
standing know-how and repu-
tation in the sector. When the
farmers' lending banks merged
to create Rabobank, the basic
philosophy of promoting and
investing in the sector, both
nationally and internationally,
was further Consolidated.
In the next issue, we will es-
camine more closely the bank's
role.
In recent issues we have
reported on CAM efforts to
coordinate an international
approach to clients. Internal
meetings and discussions
generate the theory, but how
does it work in practice?
Milan's Roberto de Cardona
explains.
Rabofin Italia is currently in the
process of negotiating an ac-
quisition loan for one of its
clients. 'But in fact,' says De
Cardona, 'the business came
in through New York. They called
us to say they'd approached an
Italian company which turned
outto be interested in acquiring
two dairy businesses in Atlan-
ta. The company was one of our
clients - the Italian dairy giant
Parmalat.' De Cardona describes
this type of deal as a perfect
lucractive industries. The main
philosophy behind the success
of post-war Dutch farming is
fewer farmers producing more on
less land. In the late 1940s and
early 1950s, agricultural pro
duction made a phenomenally
fast recovery. During the De-
pression, government had be-
gun real investment in agricul
tural policies for the first time in
Dutch history. This process con-
tinued after the Second
World War and farmers
were encouraged to invest
- first in modern equip-
ment and later in the ad-
vanced technology develop-
ed by the Netherlands'
progressive agricultural re
search institutes. Invest
ment requires financing
and the farmers' lending
banks were only too eager
to assist. Rapid economie
growth had led to a major
increase in savings, so the
banks had capital avail-
able for lending. Although
overall, the number of
people working in the food
and agribusiness has de-
clined in recent decades,
this early, intense invest
ment in highly advanced tech
nology has meant each farm-
worker and each hectare under
cultivation are now many times
more productive than even a de
cade ago. On average, a Dutch
farmer invests around NLG
40,000 per year in his busi
ness. This means an average of
around NLG5 billion is ploughed
back into the industry annually.
At present, no less than 64 per
cent of Dutch land is under culti
vation and around 5 percent of
the working population is em-
example of CAM. 'The network
was activated immediately. Par-
malat's chairman flew to New
York for discussions with Rabo
bank there, and then they came
here. Milan provided the back-
up and support through our
local account manager, Mauro
Bambacigno, and we then
made the bridge loan. The next
step is the acquisition loan it-
self.' The Milan office works
closely with almost all the other
foreign offices and Utrecht.
'Another recent example is our
cooperation with Brazil when
one of their clients acquired an
Italian company,' De Cardona
adds. 'Once you get the basic
networking right, the whole c
thing falls into place.'
o
c
De Cardona and New York's
Hans Hannaart - networking f
works.
The fact that traditional
farming giants such as the US
and France rank top of the
world list of agricultural expor-
actually amazing when you con-
sider the physical and geo-
graphical difficulties facing
Dutch farmers. As a great part
of the country's landmass is
below sea-level, over the cen-
turies farmers and communities
have had to fight an ongoing bat-
Dutch flowers for export - business is blooming.
ters is hardly surprising. But
the number three slot may raise
some eyebrows. In our series
on the history of Rabobank, we
look at how the Netherlands
developed into an international
class exporter - with more
than a little help from the far
mers' lending banks.
Although covering only 41,000
square kilometres, the Nether
lands has long ranked as one of
the world's major exporters of
agricultural and horticultural
products. The achievement is
tle to control and manage the
watery westland. Farmers in the
eastern part of the country are
not much better off as the land
is sandy, which also presents
problems. However, since the
Second World War, a new ap
proach to intensive farming
backed by government policy
and financed to a large extent
by the farmers' lending banks,
now Rabobank, has trans-
formed agriculture in the Nether
lands into one of the national
economy's most advanced and