Edwin van Raalte

Banking4Food

The Challenge… Avoiding the next GFC...

The Challenge - Producing ‘More with Less’

Food

Natural Resources

Food

2050

Every minute 158 more mouths to feed

Of which 154 in emerging and developing economies

today

805 million people chronically hungry <-> 1.4 billion

overweight

2050

More mouths with more money living in (mega-)cities

Natural Resources & Footprint

today

Why Banking4Food...

But the puzzle is complex... (example supply side)

Animal welfare

Consumer perception

Environment

Bio

dive

rsity

Economy

Innovation

Urbanisation 2030... Mega cities… mega risks?

Largest cities in 2030

Population <in thousands>

Rank 2014

Rank 1990

1. Tokyo 2. Delhi 3. Shanghai 4. Mumbai 5. Beijing

37.190 36.060 30.751 27.797 27.706

1 2 3 6 8

1 12 20 6 23

Source: UN World Urbanization Prospects 2014 revision

Growth of the Middle Class is especially in Asia

However… there is no equal distributionChina & India together host 40% of the world population on 20% of the world’s arable land, with only 10% of the global renewable water resources

Distribu(on  of  arable  land

Other

S+C  America

Russia

Oceania

US+Canada

EU11

Indonesia

India

ChinaAfrica3

distribu(on  of  popula(on

Other

S+C  America

Russia

OceaniaUS+Canada

EU11Indonesia

India

China

Africa3

Source: FAO, UN8

World agricultural land per capita is declining Netherlands one of the most densely-populated and land-scarce countries

Agr

icul

tura

l lan

d (h

a) /

cap

ita

(Source: FAO online Statistical database)

NL nr. 2 F&A export(export als % totale wereld-export)

NL nr 2 F&A* export (export as % of total world export)

(* F&A = Food & Agribusiness)

Global Food Security from the F20 perspective...

F20 themes & solutions

Increase Food Availability: The farmer perspective

• Succession: Enabling the next generation • Sustainability: From dedicated supply chains to circular systems • Science: Unlocking big data, innovations

• Social enabling: From theory to practice • Social Media: Virtual Farm concept P2P for leading farmers

• Supply Chain: Balance the value chain

• Safety & Health: Nutrition-sensitive growth

• Success: Best farm management practices

Succession challenge

Size is important, but big is not always beautiful

Top performers are not the largest farms in Australia:8 years average EBIT for Australian farmers (> 5mln assets):

Source: Rabobank dataset 2002-2010

1,5%2,7%

16,4%

38,8%

26,2%

8,0%

1,4%

5,0%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

35,0%

40,0%

45,0%

More0than010%

Between0+7.5%0and0+10%

Between0+5%0and0+7.5%

Between0+2.5%0and0

+5%

Between00%0and0+2.5%

Between00%0and000000:2.5%

Between000:5%0and000000:2.5%

Less0than000000:5%

EBIT0Australian0farms0>050million0Assets

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

A..more.than.10% B..Between.7.5%.and.10%

C..Between.+5%.and.+7.5%

AU

30mln.+

20>30mln

15>20mln

10>15mln

Succession

• Key issue: how to enable the next generation of farmers!

• Innovation and investment is crucial

• Education is key

• Increase cash flow at the farm gate

• Cooperation in the chain is needed

15

Sustainability: Impact of your average meal…

• 10 kg top soil

• 1.3 l diesel

• ≈2000-3000 l water

• 0.3g pesticide Product Water use

Bread 40 l 1 kg Tomato 4-60 l

Cup of Coffee 140 l

Glass of milk 200 l

Egg 135 l

Glass of wine 120 l

Cotton T-shirt 4000 l

1 kg chicken 6000 l

1 kg beef 15000 l

More with Less: food loss and wasteAbout 1 out of 4 calories produced gets lost or wasted globally

Less food waste/loss = lower carbon foot print

(GHG = GreenHouseGas = Broeikasgas; LULUCF = Land Use, Land Use Change & Forestry)

Challenge: Water Scarcity

Rabobank Group19

Assume that all water on earth would fit into this

bathtub. Then only one teaspoon of fresh water is

available for use by plants, animals and humans.

Less than 0.01% of the total...

Water Scarcity─ Water use has been growing at > 2x the rate of population growth─ By 2025, 1.8 bln people will be living with absolute water scarcity, and 2/3

rd of the world population could live under water stress conditions

Hightech Greenhouse Horticulture95% water savings per kg tomato

95% saving of water

The Netherlands productivity, efficiency and sustainability

Example Tomato: •NL 14x higher productivity per m2 •NL almost 95% less water used per kg

Example Dairy: •NL about 3x higher productivity •NL top 5 lowest greenhouse gas emissions/litre

0

6

11

17

22

Cucumber Tomato Wheat Potato Milk

NL higher productivity-factor compared to world average

World average

Nr 1

Nr 1

Top 3 Top 3 Top 10

Needs per kg milk: ▪ 10% of land ▪ 21% animals ▪ 23% feed ▪ 35% water

Emissions per kg milk: ▪ 24% manure ▪ 37% CO2

▪ 43% methane

Much progress already achievede.g. Todays dairy farming compared to 60 years ago:

(Source: Capper et al, 2009. J Anim Sci 87: 2160-2167)

Best soils in the US (Midwest), Ukraine and Argentina

Source: USDA

Actual Yield

25

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Social enabling environment

Soil quality & Climate

Actual yield

Potential Yield

Not soil quality and climate, but (social) enabling factors key for productivity

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Social enabling environment

Soil quality & Climate

Actual yield

Potential Yield

Big Potential to Gain!

26

Potential to gain: Raising the top 16 crop yields to 95% of their potential, would close the 2050 world food demand gap almost fully

Social enabling environment

• Key issue: from subsistence to commercial farming.

• Enable access to finance No cash no crop

• Government Long-Term Vision and Reforms

• Building a sufficient agricultural infrastructure

• Cooperation within the value chain is key.

Over 2.5 billion adults do not have a bank account

No Cash No

Crop

29

Partnership FAO & Rabobank Foundation in

Africa

Rabo Development Financial inclusion for

7.5 mln people including 2mln farmers

Rabo Foundation 25 countries

Rabo Development 16 countries

Rabobank Groep 47 countries

3215 client branches

Banking4Food

Rabobank Foundation

Rabo Development footprint

Practical example: Rice in Rwanda

Who? • 23,000 rice farmers (>35%) • 10 cooperatives, ICM rice mill,

USAID, local partner bank, Rabobank

How? • Farming practices • Post Harvest handling & storage • Link to markets • Value chain financing & support

What ? • improved access to finance • 50% more rice delivered to ICM mill • more efficient water use • better quality

Practical example Rabo Foundation: Improving Dairy in Tanzania

Who? • 13 Dutch Frisian farmer families • Tanga Dairy Cooperatives Union

TDCU incl. 6500 farmer members • Mruazi Heifer breeding Unit, Tanga

Fresh dairy processing plant, Rabo Foundation

How? • Crossbreed Frisian Holstein x Zeboe

dairy: milk yield from 1-3 to 10-12 litres/day • Farmer training • Organise chain • Link with milk processing providing

preserved dairy to e.g. supermarkets and 30 local schools

What accomplished ? • Less loss and wastage of milk • Local farmer income doubled !

Supply Chain

• Cooperate

• Maximise freedom

• Consolidate and Concentrate

• Innovate

• Reconnect with consumers

Innovation, Education & leadership Big data, Web3.0, Virtual Farm…

Virtual Farm – EnablingFarmers.com

The Future of Food…?

The Future of FarmingThe rise of the rural entrepreneur

FARMER

EntrepreneurFinancial Expert

Inno

vato

r

Risk Manager

Regulatory expert

Sustainability expert

Global orientation

Manager

MarketeerTechnology expert

F&A Specialist

TAX

Rabobank : Banking4FoodAccess to Finance, Knowledge & Networks...

Thank you

40

Feeding our world more sustainably

To contact: Edwin.vanraalte@rabobank.com