Rabobank’s vision of
the agri-food sector

Where do we want the Dutch agri-food sector to be in 2040? The vision summarised 

By 2040, the agricultural sector in the Netherlands is producing food and green products in a sustainable way that is in balance with nature. Production volumes have fallen; the earning potential has risen. Dutch agricultural sector produces within agreed environmental limits, shoulders its share of the burden as far as the climate challenge is concerned, and makes a substantial contribution to the quality of nature and the landscape in the countryside. In other words, agriculture is contributing significantly to the general welfare of the Netherlands. The costs and benefits of those services to society are factored into product prices (true value) and partly paid for by the government, such as compensation for providing services like water and environmental management (green-blue services).

On the road to 2040, Rabobank actively contributes to this transition as a financier. Sustainability is an important assessment criterion when it comes to lending. Financial instruments offered by the bank can be deployed for the transition to sustainability to those creditworthy farmers[1] with sufficient potential to become more sustainable. Rabobank has made a financing package of 3 billion euros available for this purpose. By “financial instruments” we mean interest rebates, redemption-free terms, and more lenient financing requirements and terms.

The government and other organizations in the chain have also focused their policies and instruments much more strongly on sustainability. Rabobank anticipates that aiming for sustainability in many sectors will (indirectly) lead to less volume that can be achieved within environmental limits. This means that the livestock herd in the Netherlands will shrink.

[1] By “farmers” Rabobank is referring to entrepreneurs working in agriculture and horticulture, and the food sector.

          

Where is the sector as it stands now?

The agri-food sector in the Netherlands is important to Dutch society. It is because of this agri-food sector that our country scores well on the general prosperity indicator. This is because of its beneficial effects on health, income, job security, housing, well-being and social relations in the countryside. This means that the agri-food sector is not only crucial to the economy; it also contributes to our general prosperity. In Rabobank’s vision, that contribution legitimises the raison d'être of agriculture, horticulture and the food sector in the Netherlands. That contribution has been under pressure recently. The industry is exceeding the limits of its “environmental space,” i.e. the emissions that are permitted within a given area in relation to the physical space available for agricultural production. This includes greenhouse gas emissions, ammonia, particulate matter and leaching of nutrients and plant protection products. There are serious challenges in terms of soil, water, biodiversity, landscape and animal welfare too. A structural transition to sustainable production is therefore unavoidable. 

Agricultural transition research

Shrinking environmental space requires further adjustments to agriculture and horticulture. Due to the nature of its activities, the industry is making high demands on environmental space, which cannot always be avoided. Read about the research (Dutch only)

In its role as the financier, Rabobank’s aim is to actively support sustainability

As a cooperative and socially engaged bank, Rabobank is keen to help shape the transition in the Netherlands. In the process, there have to be prospects for farmers and the environment alike: sustainability also means that farmers must be able to continue earning enough from their businesses. For Rabobank, a sound earnings model for farmers is an essential element of this transition. In this vision, Rabobank is looking to the future in its role as financier: it makes its choices and takes steps with the long-term future in mind.  We sketch 4 future scenario's and indicate which scenario the agri-food sector can best develop towards a sustainable sector that responds to current challenges in the fields of climate and nature (including soil, water and biodiversity).

Other stakeholders

Achieving our vision requires the commitment of other stakeholders too: government authorities, the consumer chain and knowledge partners, and farmers themselves. Because one thing is clear: only if all the stakeholders put their shoulders to the wheel will there be a sustainable and vital Dutch agri-food sector by 2040.