Rabobank - past and present
Rabo
Cooperating for growth
susilB - ÉÉt%
Cottoning on
Issue 21/Sep 20,1993 band
In the first part of our ongoing series on the development of
Rabobank and Dutch agribusiness (issue 17), we looked at the
19th-century origins of the two major banks which would later
merge to become one of the highest rated financial institutions
in the world. But it took around 75 years before the two cooper-
ative banks finally got around to cooperating with each other.
Surprisingly enough, the cre-
ation of two separate organiz-
ations in 1898 - one in Utrecht,
the other in Eindhoven - also
sowed the seeds for the process
which would ultimately lead to
their merger into a single
cooperative agricultural credit
organization in 1973. Up until
Before the merger - a typical Raiffeisen
member bank...
the Second World War, the two
banks continued to develop in
their own individual ways, al-
though there were great similar-
ities in their activities. Both
focussed on financingthe Nether-
lands' food and agribusiness,
and both entered the retail mar-
ket in the post-war years. Ob-
viously, the banks both partici-
pated in such initiatives as the
Agricultural Loan Guarantee
Fund set up after the war to as-
sist in rebuildingthe Dutch agri-
sector, but for many years, it
was still a question of meeting
together, rather than working to-
gether. The same basis applied
when it came to financing large
agricultural
cooperatives.
As Dutch farm-
ing reshap-
ed and redefi-
ned itself in
the early
post-war de
cades, mer-
gers between
agricultural
cooperatives
increased
their scale of
operations
and more
funds were
needed to fi-
nance this
development.
The obvious
s o I u t i o n
would have been for the two
central banks to jointly provide
the funding. However, they con
tinued to provide loans in pro-
portion to the interests each
had held in these businesses
before they merged. It was not
until the 1960s that this pat-
tern began to change. Like else-
where worldwide, this was a
decade of great social and
economie change in the Nether-
lands. Traditional divisions be
tween social groups began to
disappear and there was a dis-
tinct movement towards re-
alignments throughout the
country. Within the two cooper
ative banks, a greater accep-
tance of the need to work to
gether was
gradually de-
veloping. But
problems re-
mained. Both
banks had
traditional
geographicai
'strongholds',
ie. the Eind-
hoven-bas-
ed bank was
strongest in
the southern
part of the
country while
the Utrecht-
bank had
most opera-
in the
and
Follo-
up competing with each other,
but would focus marketing ef-
forts of winning customers from
non-cooperative banks. Despite
the best of intentions, consul-
tation proved labourious and
after a year little had been
achieved. Fortunately, this situ-
ation changed quickly. In 1969,
the committee was given the
ft r ulwtt lijj au k
tions
north
west.
wing the post-war growth of far
mers' cooperative banks into
first the 'savings bank for every-
one' and later the 'bank for
everyone', traditional regional
competitiveness between the
two organizations continued to
cause problems for some
years. However, in the late
1960s, both banks came to the
realization that the advantages
of working together made much
more sense than competing
with each other. The first step
was taken in 1968, when the
banks established a joint com
mittee to advise on location pol-
icy for member banks, so that
neither organization would end
...and a once-familiar Farmers' Lending
bank.
go-ahead to draw up binding
policy regulations on location,
which would enable local far
mers' credit and Raiffeisen
banks to define their area of ac-
tivity and, in locations where
both operated, to merge. The
concept was unanimously ap-
proved by the general meetings
of both organizations in 1970.
The two central banks then con-
stituted a committee to ensure
the policy's implementation
and to handle any problems
which may arise from local mer-
gers. It would prove to be the
first step towards the ultimate
creation of Rabobank. Keep
watching this space...
Around 18 months ago, a
new research department was
set up to study international
agribusiness. In its first year,
the agri-research team produc-
ed a single report - on the
dairy industry. But now the pre-
liminary work of establishing
research methods is behind it,
the department's reports are
starting to roll off the presses
in quick tempo.
'We followed up the first report
on the dairy industry with an
overview of the world rice mar-
ket,' says department head
Hans Reusch, 'and now our
third publication, on cotton, is
available. But this autumn will
also see the arrival of no less
than five other reports - on fer-
tilizers, fresh and processed
fruits, and the pork and poultry
industries.' In fact, each report
The World Cotton Markot.
comprises two sections. One,
in glossy brochure form, is de-
signed for use as a marketing
and informative tooi for both
Rabobankers and clients, the
other is solely for internal use.
The brochure contains a myriad
of information on the specific
commodity or sector, ranging
from historie origins to global
market forecasts. In the case
of cotton, the main producing,
importing and exporting coun-
tries are examined in the con
text of their current and poten-
tial future role in the industry.
'The internal report is commer-
cially based and comprises an
overview of the main players
and the main countries in the
researched industry,' says
Reusch. 'It is distributed to ac
count managers worldwide and
they use it to spearhead their
activities. The thinking behind
the reports is that when the
bank designates a specific year
as a period in which we will
focus our activities on a parti-
cular sector, our people in the
field need a lot of back-up ma-
terial to do their jobs. Next year
will emphasize the fruit indus
try, so we have already prepared
the indepth studies our account
managers require to get their
teeth into that market.' The
forthcoming reports on fresh
and processed fruit will be
made available to account man
agers at the international an-
nual meeting from September
13 to 15 in Utrecht. For copies
of published reports, contact
the marketing services depart
ment +31 30 902804.
