Rabobank must do more to help farmers make their businesses more sustainable. Later this summer, the Ministry of Agriculture, Nature and Food Safety (LNV) will therefore formally instruct the bank “to contribute to the transition” to a more sustainable agricultural sector. The ministry reports that NRC.
Also read: Sustainable farming gives Rabobank ‘tummy ache’
“Everyone has a role in making agriculture more sustainable, especially the banks. So they have to take their responsibility,” said a spokesperson for the ministry. “That is about making their portfolio more sustainable, but also about supporting farmers.”
Since 2016, only 2 to 5 percent of farmers have made the switch to an organic approach every year.
Minister Staghouwer (LNV, ChristenUnie) wrote in June in the strongly criticized letter about farmers’ perspectives that all parties in the food chain, including the banks, should collectively increase the ‘opportunities for financing the transition to more sustainable business operations’. Rabobank finances 80 percent of Dutch farmers.
The government sees making farms more sustainable as one of the solutions to get out of the nitrogen crisis. Sustainable measures in stables, such as the installation of air scrubbers, can reduce the emission of ammonia and particulate matter. Less intensive livestock farming means a lower burden on surrounding nature areas. If more farmers start operating sustainably, fewer will have to stop their business to achieve the nitrogen targets.
NRC’s discussions with six farmers who want to make their business more sustainable or who recently did, show that in many cases Rabobank is hesitant to finance such a switch. The bank often finds the financial risk of loans to farmers who want to work sustainably or organically too great.
Sustainability director Bas Rüter confirms that the bank is grappling with this issue: “We actually want everyone to become a sustainable farmer tomorrow with a loan from Rabobank, but it must be responsible. And therein lies the problem.” Organic farmers face higher production costs and a smaller market for their products than regular farmers, which means that the financial risks for the bank are greater. Rüter speaks of a “field of tension that gives every employee within our bank a stomachache.”
Last autumn, Rabobank’s ethics committee internally criticized the reluctance to provide money to farmers who want to become more sustainable. The committee called the fact that account managers assess financing applications on the basis of general risk models instead of looking for a tailor-made solution together with farmers.
Rabobank wary of making farmers more sustainable E6-7
A version of this article also appeared in the newspaper of 16 July 2022