The rise of the rural The Future of Farming entrepreneur 2014 - PowerPoint PPT Presentation

The rise of the rural The Future of Farming entrepreneur 2014 Nuffield Contemporary Scholars Conference Ambitious by nature Berry Marttin, member Executive Board Rabobank

The challenge of the next GFC... 2

The challenge 2050 Natural Natural resources resources Every minute 158 more mouths to feed Of which 154 in developing and emerging economies Food Food 2014: Access to food is lacking 2050: Access & Availability 842 mln people are chronically hungry <-> 1.4 bln with overweight More mouths with more money living in (mega-)cities “We need to produce more with less” 3 mln children die of hunger every year

Consuming our western way… 4

Arable land per capita (in hectares) 3.5 3 2.5 2 1971 1.5 2011 1 Minimum for 0.5 West European diet 0 Source: World Bank, Rabobank Arable land (hectares per person) Arable land (hectares per person) includes land defined by the FAO as land under temporary crops (double-cropped areas are counted once), temporary meadows for mowing or for pasture, land under market or kitchen gardens, and land temporarily fallow. Land abandoned as a result of shifting cultivation is excluded. 5

But the puzzle is complex... (example supply side) Economy Consumer perception Biodiversity Innovation Animal welfare Environment 6 6

Global Master classes - key topics and deep dives on new themes 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 • ........ • 7

Succession challenge 8

Size is important, but big is not always beautiful 8 years average EBIT for Australian farmers (> 5mln assets): Top performers are not the largest farms in Australia: 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% More than Between Between Between Between Between Between Less than 10% 10% +7.5% and +5% and +2.5% and 0% and 0% and -5% and -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% EBIT Australian farms > 5 million Assets AU Source: Rabobank dataset 2002-2010 9

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 10

Best soils in US (Midwest), Ukraine & Argentina Source: USDA 11

Climate determines production potential as well Temperate & humid Tropical & humid Temperate & humid 12

Soil quality & climate 100% 90% 80% 70% 60% Social enabling 50% environment 40% Soil quality & Climate 30% Actual yield 20% Potential Yield 10% 0% 13

Actual Yield 100% 90% 80% 70% 60% Social enabling 50% environment 40% Soil quality & Climate 30% Actual yield 20% Potential Yield 10% 0% 14

Social enabling factors key for yield 100% 90% 80% 70% 60% Social enabling 50% environment 40% Soil quality & Climate 30% Actual yield 20% Potential Yield 10% 0% 15

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 16

Banking4Food 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 including Rabo Development 17 2mln farmers 16 countries

Sustainability Key issue: • reducing environmental footprint and waste Efficiency and High • Productivity are Key More crop per drop... Look for the opportunities • in sustainability 18

Social Media & Innovation 19

Innovation Productivity gains with Big data… Crucial role for algorithms (machinery intelligence) to provide integrated farm solutions Proprietary data Public data (soil On-farm data maps, GPS, collected by weather info, machinery (yield, public research applications, soil data) testing, etc.) Algorithm Algorithm that runs Inputs Yield machinery 20

Supply Chain Cooperate • Maximise freedom • Consolidate and • Concentrate Innovate • • Reconnect with consumers 21

Thank you Feeding our world more sustainably 22