Rabobank - past and present
Rabobank's role in post-war Dutch
agribusiness
Rabo
Back to grass roots
In the previous issue, we traced the Netherlands' post-war de-
velopment into one of the world's top three exporters of
agriproduce. Government policy to promote recovery lay at the
root of this development, but it could never have been achieved
without the farmers' lending banks.
At the end of the Second
World War, the Nether
lands was one of the
most badly hit countries
in Europe. lts industrial
and agricultural base had
suffered immense dam-
age, leading to food and
other shortages. One of
the government's prime
aims was to get agricul-
ture back on its feet as
quickly as possible in or
der to suppiy domestic de-
mand. However, it was
also confronted with an-
other major problem. Dur
ing the war years, the
money suppiy had been
over-expanded and to pre
vent mass inflation
caused by shortages of
almost all products, far-
reaching currency reform
was required. This would
ultimately be good news for
both the farmers' lending banks
and the agricultural sector as a
whole.
In the summer of 1945, the
government calied in all bank
notes and these monies were
placed in blocked bank accounts
which could only be accessed for
specific purposes through inter-
bank transactions. For the far
mers' lending cooper-
atives, this meant a stag
gering increase in funds
as many people in the
rural areas of the Nether
lands had never kept
their money in banks, but
prefered the proverbial
matress for safekeeping.
By the end of 1945, the
two cooperative central
banks had accumulated
no less than NLG21 bil-
lion in savings and de-
posits. Although this
amount would gradually
decrease as money be-
gan to flow more smooth-
ly, by 1950, the com-
bined deposits in far
mers' lending banks was
still NLG11 billion.
These funds were sorely
needed. The government
had established a Na
tional Agriculture Recov-
Issue 19/July 26, 1993 band
ery Service in which the
farmers' lending banks played a
prominent role by extending
credit to agriproducers, but 'the
position of agriculture was still
bleak,' writes Herman Bol in his
overview of the cooperative
banking system in the Nether
lands. A mass injection of capi-
tal was needed to ensure agri
cultural recovery and it came in-
itially in the form of Marshall-
Plan aid. Of the US$400 million
given in aid, NLG143 million
went into agriculture.
But through government policy
of low prices and production
quotas, agribusiness in the
Netherlands at that time showed
little of its later growth potential.
Farms were still predominantly
family affairs, employing a rela-
tively high number of people
and with little mechanisation.
Farmers themselves were wary
of 'debt' and prefered to borrow
from relatives, rather than
banks. The industrial boom of
the 1950s and 1960s was
some way off, as was the mi-
gration of farm-workers to indus-
try. It would be the mid-1950s
before the Dutch agricultural
sector began to exhibit the first
signs of its current worldwide
export prominence.
To be continued...
One of the highlights of the
recent General Managers'
Conference was their visit
to the Haarlem regional
headquarters. Around 50 mem-
ber banks were represented at
the informal discussions on the
role and expected functioning
of the international offices and
how cooperation and communi-
cation can be improved. Haar
lem regional manager Jaap
Hazen explains why these meet
ings are so important.
'Basically,' says Hazen, 'the
idea was to present two
standpoints. The director of one
of our most internationally
active member banks - Aals
meer, which services one of the
Netherlands' two central flower
auctions in the vicinity of Schip
hol airport - Frans Strootman,
gave a presentation. His aim
was to press home what the
member banks need and expect
from our foreign offices.'
A second presentation was pro-
vided by international chief Rik
van Slingelandt who outlined
how the offices worldwide can
be of assistance to member
banks.
'I would say that this kind of in
formal meeting is of essential
importance in expanding mem
ber banks' cooperation with the
international offices,' Hazen
believes. 'Our re-
gion derives a sub-
stantial income not
only from interna
tional agribusiness
activities, but al
so from numerous
other businesses in
the highly industria-
lized Randstad area
of the Netherlands,
with Schiphol air-
port and Amster
dam mainport as
centres. So, when a
cliënt comes to the
member banks with
a piece of business
involving cross-bor
der transactions,
the banks have to
be sure that the
foreign office in-
volved understands®
who imperative this
is for them.'
Hazen is fully aware
of the fact that
most foreign offices
also operate in their own
markets. 'But I feel strongly
that they should never forget
their primary function, which is
to service the member banks in
the Netherlands. By meeting
the general managers of our of
fices abroad, we create the op-
portunity to discuss cooper
ation and communication in
general, and to talk about spe
cific problems and business
that they can assist us with.
You know, once you've met
someone, it's far easier to piek
up a phone and teil that person
what you need. He's no
longer merely a name
on a telephone list.'
An additional point is
that more and more of
Rabobank's foreign-
based staff are recruit-
ed locally. 'This can
mean,' says Hazen,
'that they are not fully
conversant with the
bank's culture. By
bringing them together
with the grass roots,
they are also able to
gain a better under-
standing of the mem
ber banks' needs.'
All participants were
unanimous in their ap-
preciation of the meet
ing and a suggestion
that a working visit to
one of the regional
headquarters should
be a regular feature of
GMCs is now under
consideration.
