The Challenge Avoiding the next GFC... The Challenge - Producing - - PowerPoint PPT Presentation

Edwin van Raalte

Banking4Food


The Challenge…


Avoiding the next GFC...

The Challenge - Producing ‘More with Less’

Food

Natural Resources

Food

2050

Every minute 158 more mouths to feed Of which 154 in emerging and developing economies

today

805 million people chronically hungry <-> 1.4 billion

• verweight

2050

More mouths with more money living in (mega-)cities

Natural Resources & Footprint

today

Why Banking4Food...

But the puzzle is complex... 


(example supply side)

Animal welfare Consumer perception Environment Biodiversity Economy Innovation

Urbanisation 2030... Mega cities… mega risks?

Largest cities in 2030 Population

<in thousands>

Rank 2014 Rank 1990

• 1. Tokyo
• 2. Delhi
• 3. Shanghai
• 4. Mumbai
• 5. Beijing

37.190 36.060 30.751 27.797 27.706 1 2 3 6 8 1 12 20 6 23

Source: UN World Urbanization Prospects 2014 revision

Growth of the Middle Class is especially in Asia

However… there is no equal distribution


China & India together host 40% of the world population on 20% of the world’s arable land, with only 10% of the global renewable water resources

Distribu(on ¡of ¡arable ¡land

Other S+C ¡America Russia Oceania US+Canada EU11 Indonesia India China Africa3

distribu(on ¡of ¡popula(on

Other S+C ¡America Russia Oceania US+Canada EU11 Indonesia India China Africa3

Source: FAO, UN

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World agricultural land per capita is declining


Netherlands one of the most densely-populated and land-scarce countries

Agricultural land (ha) / capita

(Source: FAO online Statistical database)

NL nr . 2 F&A export

(export als % totale wereld-export)

NL nr 2 F&A* export

(export as % of total world export)

(* F&A = Food & Agribusiness)

Global Food Security from the F20 perspective...

F20 themes & solutions

Increase Food Availability: The farmer perspective

• 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

Succession challenge


Size is important, but big is not always beautiful

Top performers are not the largest farms in Australia: 8 years average EBIT for Australian farmers (> 5mln assets):

Source: Rabobank dataset 2002-2010

1,5% 2,7% 16,4% 38,8% 26,2% 8,0% 1,4% 5,0% 0,0% 5,0% 10,0% 15,0% 20,0% 25,0% 30,0% 35,0% 40,0% 45,0% More0than0 10% Between0 +7.5%0and0 +10% Between0 +5%0and0 +7.5% Between0 +2.5%0and0 +5% Between0 0%0and0 +2.5% Between0 0%0and000000 :2.5% Between000 :5%0and000000 :2.5% Less0than000000 :5% EBIT0Australian0farms0>050million0Assets 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% A..more.than.10% B..Between.7.5%.and. 10% C..Between.+5%.and. +7.5% AU 30mln.+ 20>30mln 15>20mln 10>15mln

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

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Sustainability: Impact of your average meal…

• 10 kg top soil
• 1.3 l diesel
• ≈2000-3000 l water
• 0.3g pesticide

Product Water use Bread 40 l 1 kg Tomato 4-60 l Cup of Coffee 140 l Glass of milk 200 l Egg 135 l Glass of wine 120 l Cotton T-shirt 4000 l 1 kg chicken 6000 l 1 kg beef 15000 l

More with Less: food loss and waste


About 1 out of 4 calories produced gets lost or wasted globally

Less food waste/loss = lower carbon foot print

(GHG = GreenHouseGas = Broeikasgas; LULUCF = Land Use, Land Use Change & Forestry)

Challenge: Water Scarcity

Rabobank Group 19

Assume that all water on earth would fit into this

• bathtub. Then only one teaspoon of fresh water is

available for use by plants, animals and humans. Less than 0.01% of the total...

Water Scarcity


─ Water use has been growing at > 2x the rate of population growth
 ─ By 2025, 1.8 bln people will be living with absolute water scarcity, and
 2/3

rd

• f the world population could live under water stress conditions


Hightech Greenhouse Horticulture


95% water savings per kg tomato

95% saving of water

The Netherlands productivity, efficiency 
 and sustainability

Example Tomato:

• NL 14x higher productivity per m2
• NL almost 95% less water used per kg

Example Dairy:

• NL about 3x higher productivity
• NL top 5 lowest greenhouse gas emissions/litre

6 11 17 22

Cucumber Tomato Wheat Potato Milk

NL higher productivity-factor compared to world average

World average Nr 1 Nr 1 Top 3 Top 3 Top 10

Needs per kg milk: ▪ 10% of land ▪ 21% animals ▪ 23% feed ▪ 35% water Emissions per kg milk: ▪ 24% manure ▪ 37% CO2 ▪ 43% methane

Much progress already achieved


e.g. Todays dairy farming compared to 60 years ago:

(Source: Capper et al, 2009. J Anim Sci 87: 2160-2167)

Best soils in the US (Midwest), Ukraine and Argentina

Source: USDA

Actual Yield

25

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

Not soil quality and climate, but (social) enabling factors key for productivity

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

Big Potential to Gain!

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Potential to gain:

Raising the top 16 crop yields to 95% of their potential, would close the 2050 world food demand gap almost fully

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.

Over 2.5 billion adults do not have a bank account

No Cash No Crop

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Partnership FAO & Rabobank Foundation in Africa Rabo Development Financial inclusion for 7.5 mln people including 2mln farmers Rabo Foundation 25 countries Rabo Development 16 countries Rabobank Groep 47 countries 3215 client branches

Banking4Food

Rabobank Foundation

Rabo Development footprint


Practical example: Rice in Rwanda

Who?

• 23,000 rice farmers (>35%)
• 10 cooperatives, ICM rice mill,

USAID, local partner bank, Rabobank How?

• Farming practices
• Post Harvest handling & storage
• Link to markets
• Value chain financing & support

What ?

• improved access to finance
• 50% more rice delivered to ICM mill
• more efficient water use
• better quality

Practical example Rabo Foundation: 


Improving Dairy in Tanzania

Who?

• 13 Dutch Frisian farmer families
• Tanga Dairy Cooperatives Union

TDCU incl. 6500 farmer members

• Mruazi Heifer breeding Unit, Tanga

Fresh dairy processing plant, Rabo Foundation How?

• Crossbreed Frisian Holstein x Zeboe

dairy: milk yield from 1-3 to 10-12 litres/day

• Farmer training
• Organise chain
• Link with milk processing providing

preserved dairy to e.g. supermarkets and 30 local schools What accomplished ?

• Less loss and wastage of milk
• Local farmer income doubled !

Supply Chain

• Cooperate
• Maximise freedom
• Consolidate and

Concentrate

• Innovate
• Reconnect with

consumers

Innovation, Education & leadership


Big data, Web3.0, Virtual Farm…


Virtual Farm – EnablingFarmers.com

The Future of Food…?

The Future of Farming


The rise of the rural entrepreneur

FARMER

Entrepreneur

Financial Expert

Innovator

Risk Manager Regulatory expert Sustainability expert

Global orientation Manager

Marketeer

Technology expert F&A Specialist TAX

Rabobank : Banking4Food


Access to Finance, Knowledge & Networks...

Thank you

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Feeding our world more sustainably

To contact: Edwin.vanraalte@rabobank.com