Rabobank’s farming roots
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BANKING

Rabobank’s farming roots

No bank is as readily associated with food and agriculture finance as Rabobank. The Dutch lender’s strap line on its website sums it up: “Rabobank is committed to food and agribusiness.”

The bank’s roots lie in agriculture. In 1898, two separate cooperative banks – one in Utrecht, the other in Eindhoven – were founded by rural entrepreneurs. The two entities served their rural communities independently for three-quarters of a century before merging in 1972.

Today, Rabobank is one of the biggest financial participants in agriculture, servicing the whole value chain – primary producers seeking credit for crop development, global traders wanting to cover commodity risks, investors seeking opportunities to invest in food and agriculture funds, or processors wanting to expand internationally.

The bank’s exposure to food and agriculture was €80.4 billion, as at June 30, with nearly three-quarters of those loans issued to the primary agricultural sector.

One of the bank’s most recent public transactions was for the Ghana Cocoa Board. Rabobank was mandated lead arranger in a one-year, $1.5 billion syndicated pre-export finance facility for the GCB. The proceeds of the facility have been used by the GCB to finance the full 2010-11 cocoa campaign. This includes providing the 1 million cocoa-farming families in Ghana with a guaranteed price for their production, based on a percentage of the export price.

The cocoa is exported through the board and delivered to prime off-takers, predominantly in Western Europe.

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