Rabobank - the bank of turbo farming

This issue takes a look at Rabobank and it's Banking4Food strategy.

Rabobank - the bank of turbo farming

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Agrifintech investment

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📣 Rabobank - the bank of turbo farming?

One thing I’ve enjoyed doing in the newsletter recently is to run through some major players in Agri Finance. This week, it's the turn to shine the spotlight on Rabobank - maybe you have heard of them? 😁 And yes, turbo farming is a great phrase which I clearly didn't come up with. See below. ⬇️

🗞 Relevant News

⦿ Railsr collapse - a fintech related piece with 2 relevant threads. More below👇

⦿ 🇪🇺 Agreena raise €46m - but who are they? HeavyFinance also raise €3m.

⦿ Avanti Finance raise $24m from investors including Rabobank 👀

⦿ Indigo Ag and Farmer Mac join forces 🤝

⦿ Apollo Ag access new debt facility

⦿ Growers Edge tie up with Munich Re

Rabobank - the bank of turbo farming

One thing I’ve enjoyed doing in the newsletter recently is to run through some major players in Agri Finance as, let's face it, they are important players in the agrifintech ecosystem. It's also an easy way to grasp the context for partnerships, announcements, investments and overall strategy.

So... to Rabobank, or 'Rabo' for short, who are not only a banking giant, but also a huge player in the Food and Agri sector.

According to the S&P global bank ranking they are the 50th largest bank in the world with $727bn in total assets.  To put this in perspective JP Morgan (number 5 on the list) has total assets of $3.7T, Wells Fargo (#16) with assets of $1.9T and State Bank of India has $695bn assets at #53.

This issue takes a look through :

  • The Banking4Food strategy
  • Financials
  • Navigating the Nitrogen crisis
  • Role in the Agri Fintech ecosystem
  • The bank of turbo farming?

The Banking4Food strategy

Rabobank’s heritage is in the Food and Agri sector in the Netherlands and can lay claim to playing a role in the Dutch becoming "the cucumber Saudis" according to this Economist article, who suggest that the Dutch have become too good at farming.

Maybe they will become too good at banking too? Let's see. 😅

If, as the article suggests, the Netherlands is the home of turbo farming, then Rabo surely are the bank of turbo farming at least?

At the heart of their Banking4Food strategy are some of the key questions at the heart of the food and agri sector globally.

➡️ Feed 10 billion people by 2050 ✅
➡️ Evolve to a more sustainable food system ✅

With this in mind, the Netherlands has pushed to become a leader in circular agriculture by 2030 and has allocated funds to do so. (For their part, Rabo have also made some investments aligned to this theme - more on that below. 👇 )

It is with these objectives in mind that you will see the bank innovate, whether launching the Carbon Bank 💡, sponsoring the Foodbytes platform to spur innovation in Agritech or even sharing best practice in developing markets via the Rabo Foundation.

In 2020, Rabo Carbon Bank started to generate carbon credits by developing propositions to help farmers shift to regenerative agricultural practices. In 2022, it sold the first carbon credits to Dutch energy companies Vattenfall and Greenchoice, dairy companies Interfood and Hoogwegt and financial companies Rabobank (itself) and Interpolis (who Rabobank also have a strategic investment in).

The Banking4Food strategy can be quantified by looking at their Wholesale and Rural business and also DLL, the leasing arm, both in its domestic market and internationally. So let's jump to that.


At the end of 2022, the Food & Agri business had a €120bn Balance Sheet globally. This business is split into Europe &Africa, North America, South America, Asia and Australia & New Zealand. (In South America it is active in Brazil, Argentina, Chile and Peru).

Let’s break this out below in a 3 year trend by region. (Apologies, if you’ve read the Investment Report for 2022 and had a bit too much “5 year trend by region by shoe size etc" type information for one day).

Rabobank Annual Reports

Rabo have been an early climate mover.

When the UN Environment Programme became active, they were one of the first banks to test drive transition and physical risk methodology. They have refined these further, specifically in relation to transition risks for their the livestock and crop loan exposures and for water stress as a physical risk.

But there was one topic that jumped out in particular - the 'Nitrogen crisis'.

Since 2019, Dutch courts have halted construction projects and the expansion of road networks. Further, in 2022, the government pounced to halve nitrogen emissions by 2030 and backed a €24bn fund to pay for the largest emitters – in this case mostly farms. As you might imagine this has sent shockwaves through the local farming community, with local elections at the start of March propelling a pro-farmer party to the top of polls.

Climate smart has gone climate crazy. It feels like this might take a while to play out.

In the meantime.....it has hit the bank where it hurts.

They have specifically classified as ‘vulnerable’ a lot of their nitrogen exposed loan books, with Livestock and Pork amounting to €7.1bn in vulnerable sectors. Their Annual Report outlines the exposures - see below - despite government financial supports. This vulnerability mainly reflects the uncertainty hanging over the sector.

Rabobank Annual Report 2022

Role in Agrifintech

As part of their overall commitment to the Food and Agri sector, clearly as a bank they play a significant role in the startup ecosystem (e.g. Foodbytes) and also as an active direct investor in companies and funds.

They have an active portfolio of direct corporate venture investments in the sector, including companies such as Produce Pay, Apollo Ag and Agro.Club. Full Harvest is another investment which chimes directly with the Dutch objective to support a circular food economy in the near term as referenced above, showing how the state, the sector and the bank move in lock step to nudge things forward.

In 2021, they also entered into a joint venture with Telus to acquire Conservis, a farm management platform, active in the US and Australia, with the specific aim of improving its overall financial reporting capacity. Definitely convenient for any lender.

The bank of turbo farming?

Sure, they are a giant across the Food and Agri landscape.

One thing I like about this approach is that it takes account of the value chain – producers, processors and consumers. Sustainability is a good example of this – when the demand comes from the consumer side of the market, they relay that message back upstream and figure out the technology and financial impacts.

Conversely, as the Nitrogen issue demonstrated, having loan book concentration in any particular sector can be problematic. My feeling is that this will get figured out sensibly (everything does in the Netherlands, right?), but there is also a risk that it could become a wider issue in other territories. I’m sure they are developing these scenarios.

What would I do if I were developing an Agrifintech product?

I would build a strategy for exercising that financial IP, which would certainly involve Rabo, but not exclusively be “speak to Rabo”. They are two different things.

There are multiple players in the ecosystem who are willing to develop products of which Rabo is one. I would be worried about the Railsr news below 👇 who introduced their own supply side concentration risk. 🫤

What would I do if I worked for another lender?

I would think about core competencies and think there are multiple areas to develop competencies around, especially in a fast changing landscape. I think most people reading this are already doing that so you - or we - are a self selecting group.

To put it in context, Rabo Agri Finance currently have $13bn in assets in the US – roughly 2.5% of the US Agri Finance market, for example.

Barclays Bank in the UK are one example of another bank who have invested significantly in Agritech over the years via their Eagle Labs programme.

There is a lot to aim for. Let's get to work! 🍀


Let's dive into the news section.

⦿ Railsr collapse . This is a fintech related piece and there are 2 things I feel are relevant.

👉 Firstly, a lot of embedded finance and banking-as-a-service companies who have helped consumer fintech companies develop are struggling right now. There are only so many consumer fintech applications that need separate technology middleware. I think some will start to focus on B2B applications, of which there are many more applications - yes including in food and agriculture.

👉 Secondly, Railsr had one lending partner, which apparently stepped back from them in late 2022. They had nowhere else to turn and it was too late develop new relationships. Bilateral relationships are difficult and always create issues with scale - at best - and viability - at worst.

⦿ 🇪🇺 Agreena raise €50m but who are they? HeavyFinance also raise €3m.

Agreena have an incredible founding story and are one of the earliest 'carbon converts' on the agritech scene, having trialled a commodity trading marketplace in 2019 before moving to carbon.  

HeavyFinance are a company I have featured here before and provide financial services for equipment in the Baltics region and eastern Europe using a peer 2 peer model. Their latest round is geared towards developing their climate finance propositions including carbon farming.

Wow, its all happening in climate finance in Europe. Wait a second...

⦿ Indigo Ag and Farmer Mac join forces in the U.S. to offer farmers interest rebates for verified sustainability practices.

Producers who are accepted will be eligible for a 3 year 0.25% interest rate rebate on the principal balance of a mortgage. That can add up to be a significant sum.

This is a potential coup for both parties as Indigo clients can also benefit from carbon payments and market access via the Market+Source initiative. Farmer Mac also get a new product type and an active role in developing the climate smart financing market.

When I wrote about Farmer Mac a few issues ago 'chasing green growth', I was very interested to see their move into renewable energy financing but was searching for how this transferred specifically into ag lending, so this partnership makes a lot of sense.

⦿ Avanti Finance raise $24m from investors including Rabobank 👀

Avanti work in rural India and this investment is designed to further develop the company's tech and onboard multiple partners.

⦿ Apollo Ag draw $9.5m facility from the US International Development Finance Corporation and expand into Zambia.  

Apollo were a recipient of one of the major investments in African agrifintech in 2022, receiving $40m in March 2022.

⦿ Growers Edge announce a direct partnership with Munich Re for their warranty backed plans.

Last, but not least, I thought this was noteworthy as this direct relationship with Munich Re - a major global reinsurer - will not only help to reduce warranty costs but is also likely to have undergone significant due diligence by the reinsurer to validate the Growers Edge data and process.

Kudos to Ahraz and their team. 😀

That is all this week and I hope you enjoyed this piece.

And don't forget to check the report out ➡️ HERE - it makes a complicated sector simple. 😁