RABOBANK AND IFC COMMIT
TO SUSTAINABLE BANKING
As part of its ongoing commitment to
sustainable banking, Rabobank has signed
a Letter of Understanding with the Inter
national Finance Corporation (IFC) to
form a partnership within the F&A sector.
"Feeding the world will require new invest-
ment in farming methods, technologies,
and dissemination of information. We need
investment in infrastructure to reduce the
incredible amount of food that is wasted.
We need better insurance products to help
farmers. We can provide that financing
and encourage others to invest," said IFC
MrThunell continues "Rabobank's commit
ment to sustainable development makes
it a natural partner for IFC and it reflects its
history and structure as a cooperative bank.
The financial crisis reminded us that the
Wall Street model is not the only one.
Cooperatives and mutual companies
can play a very important role in the
developing world, just as they have
in the developed world."
According to Rabobank Chairman
Piet Moerland, cooperative banks
are by no means immune to the
recent financial turmoil, Rabobank
included. Although he believes the
cooperative banking system has
proven its resilience by withstanding
a tough test. 'The cooperative banking
model is viable with a promising future
relevant to both developed and emer-
ging countries," he said.
Mr Thunell, meanwhile, believes that "We
are all under increased scrutiny for the
environmental and social performance of
our investments. Society is demanding
sustainability. The marketplace is demanding
confidence on whether food is safe and was
not produced at the expense of a rainforest
or a group of indigenous people."
The IFC is a member of the World Bank
Group and promotes sustainable private
sector development in developing
In August 2009, Rabo AgriFinance agreed a USD 500 million
vendor financing deal with Monsanto, the seed and agri-
cultural chemical giant. Under the deal, Rabobank's US agri-
fïnancing arm allocated USD 500 million to provide farmers
with the financing to purchase Monsanto seeds.
Rabo AgriFinance president and CEO John Ryan says Mon
santo approached the bank with the idea of taking over the
financing that Monsanto had been providing itself. "Monsanto
doesn't see vendor financing as part of its core business.
It's a seed company, not a bank. So they asked us
if we were interested in helping to finance the seed
buying of their producers."
"Monsanto is the biggest seed company in the world. This not
only gives us the opportunity to finance their seed buying,
it's also a chance to explore the other financial needs of those
producers. Those could be anything from erop insurance to
real estate financing, or operating capital over and above the
capital required to buy Monsanto's seeds. Basically, it gives
us access to a whole new range of agricultural producers."
"In addition," says John Church, Rl global Relationship Manager
for Monsanto, "this transaction complements the expansion
of our global relationship, and positions Rabobank well for
further business opportunities with Monsanto."
Soon after completing the vendor finance deal, Rabo Agri
Finance was invited to speak at Monsanto's sustainability
conference, which was attended by their top 50 producer cus-
tomers. Ryan adds, "It was a perfect opportunity for us to teil
producers about Rabobank in general and Rabo AgriFinance's
role in financing the corn, soy bean and cotton industries in
particular. I'm confident it will enable us to build relationships
with producers we would not have had access to otherwise."
LarsThunell and Rabobank Chairman Moerland
issue 22 jai THE WORD