Banking 4 Food Edwin van Raalte
The Challenge… Avoiding the next GFC...
The Challenge - Producing ‘ More with Less’ today 2050 Natural Natural Resources Resources Every minute 158 & Footprint more mouths to feed Of which 154 in emerging and developing economies Food Food 2050 today More mouths with more 805 million people chronically money living in (mega-)cities hungry <-> 1.4 billion overweight
Why Banking 4 Food...
But the puzzle is complex... (example supply side) Economy Consumer perception Innovation Biodiversity Animal welfare Environment
Urbanisation 2030... Mega cities… mega risks? Source: UN World Urbanization Prospects 2014 revision Largest cities Population Rank Rank in 2030 <in thousands> 2014 1990 1. Tokyo 37.190 1 1 2. Delhi 36.060 2 12 3. Shanghai 30.751 3 20 4. Mumbai 27.797 6 6 5. Beijing 27.706 8 23
Growth of the Middle Class is especially in Asia
However… there is no equal distribution China & 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 ¡popula(on Distribu(on ¡of ¡arable ¡land Other Other China Africa3 Africa3 China S+C ¡America S+C ¡America India Russia Russia Oceania US+Canada Indonesia Oceania EU11 Indonesia EU11 India US+Canada Source: FAO, UN 8
World agricultural land per capita is declining Netherlands one of the most densely-populated and land-scarce countries Agricultural land (ha) / capita NL nr 2 F&A* export NL nr . 2 F&A export (export as % of total world export) (export als % totale wereld-export) (* F&A = Food & Agribusiness) (Source: FAO online Statistical database)
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 8 years average EBIT for Australian farmers Top performers are not the largest farms in Australia: (> 5mln assets): 100% 45,0% 38,8% 90% 40,0% 35,0% 80% 30,0% 70% 26,2% 25,0% 60% 20,0% 30mln.+ 16,4% 50% 15,0% 20>30mln 40% 15>20mln 10,0% 8,0% 5,0% 10>15mln 30% 5,0% 2,7% 1,5% 1,4% 20% 0,0% More0than0 Between0 Between0 Between0 Between0 Between0 Between000 Less0than000000 10% 10% +7.5%0and0 +5%0and0 +2.5%0and0 0%0and0 0%0and000000 :5%0and000000 :5% +10% +7.5% +5% +2.5% :2.5% :2.5% 0% A..more.than.10% B..Between.7.5%.and. C..Between.+5%.and. 10% +7.5% EBIT0Australian0farms0>050million0Assets AU Source: Rabobank dataset 2002-2010
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 waste About 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 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... 19 Rabobank Group
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 rd 2/3 of the world population could live under water stress conditions
Hightech Greenhouse Horticulture 95% water savings per kg tomato 95% saving of water
The Netherlands productivity, efficiency and sustainability NL higher productivity-factor compared to world average 22 Example Tomato: Nr 1 • NL 14x higher productivity per m2 • NL almost 95% less water used per kg 17 Nr 1 Example Dairy: • NL about 3x higher productivity • NL top 5 lowest greenhouse gas emissions/litre 11 Top 3 Top 3 Top 10 World average 6 0 Cucumber Tomato Wheat Potato Milk
Much progress already achieved e.g. Todays dairy farming compared to 60 years ago: Needs per kg milk: ▪ 10% of land ▪ 21% animals ▪ 23% feed ▪ 35% water Emissions per kg milk: ▪ 24% manure ▪ 37% CO 2 ▪ 43% methane (Source: Capper et al, 2009. J Anim Sci 87: 2160-2167)
Best soils in the US (Midwest), Ukraine and Argentina Source: USDA
Actual Yield 100% 90% 80% 70% 60% Social enabling 50% environment 40% Soil quality & Climate 30% Actual yield 20% Potential Yield 10% 0% 25
Not soil quality and climate, but (social) enabling factors key for productivity 100% Big 90% Potential 80% to Gain! 70% 60% Social enabling 50% environment 40% Soil quality & Climate 30% Actual yield 20% Potential Yield 10% 0% Potential to gain: Raising the top 16 crop yields to 95% of their potential, would close the 2050 world food demand gap almost fully 26
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
Banking 4 Food Rabobank Groep Partnership FAO & Rabo Development Rabo Foundation 47 countries Rabobank Foundation in Financial inclusion for 25 countries 3215 client branches Africa 7.5 mln people Rabo Development 29 including 2mln farmers 16 countries
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 Farming The rise of the rural entrepreneur Entrepreneur Manager F&A Specialist Financial Expert Innovator Global orientation Marketeer FARMER TAX Regulatory expert Technology expert Risk Manager Sustainability expert
Rabobank : Banking 4 Food Access to Finance, Knowledge & Networks...
Thank you Feeding our world more sustainably 40
To contact: Edwin.vanraalte@rabobank.com
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