“We are impressed to see such significant results in terms of productivity increase”says Rabobank Foundation Managing Director

09/04/2015 - Since the agreement between FAO and Rabobank Foundation was signed in 2013, the two organizations have made great progress in joint programs in Ethiopia, Kenya and Tanzania. The cooperation is based on the complementarity of the two organizations. Where FAO has extensive knowledge and experience in agricultural development, the Foundation can provide loans to help small-scale farmers access finances from existing financial institutions in their countries. It can also provide a track record for potential future financing by financial institutions. In addition, both FAO and the Rabobank Foundation have experience in providing capacity building in areas related to their activities.     

Here, Rabobank Foundation Managing Director Pierre van Hedel explains progress made. 

How are FAO’s research and technical expertise and Rabobank’s business orientation combined bringing results in the field?

Rabobank Foundation aims to support small-scale farmers in countries like Ethiopia, Kenya and Tanzania to become self-reliant. We focus on member-based organizations, to ensure these farmers will have a stronger position in the value chains. Rabobank Foundation supports various cooperatives by providing financial services and sharing the cooperative and ‘(agri)-banking’ expertise that Rabobank has built up over many years with farmers all over the world.  

The expertise and experience of Rabobank Foundation mainly lays at the financial and organizational side of the agri-value chains. In our projects we notice that agronomical knowledge and innovations are crucial in developing these farmers and organizations. FAO offers both the required knowledge and expertise. By joining forces, we believe that we can provide them a complete package, which should ensure more self-reliance in the agri sector in these countries.

FAO has extensive knowledge and experience in agronomical development. On your side, which financial instruments are we talking about to improve financial access to the beneficiaries in Africa?

Rabobank Foundation can provide a range of loans products (such input loans, working capital loans, investment loans, trade financing facilities) to provide access to finance. We help organizations to build up a track record for potential future financing by local financial institutions. In addition, Rabobank Foundation has experience in providing capacity building related to its field of business.

What is your assessment of the field visit to the project in Tanzania, which already benefits over 500 small-scale farmers?

FAO has supported a paddy farmer group in Morogoro rural district, providing improved varieties of paddy seedlings and training in Good Agricultural Practices. As a result, the farmers have experienced a sharp increase in production. We were impressed to see such significant results in terms of productivity increase. Due to the work done by FAO, the farmer group now has a level of productivity and scale that created a business case for making investments in capacity building, storage and market linkages. 

What remains to be done? Where would you like to see this partnership going?

Currently, most of the produced rice is sold in the high season, when large amounts of paddy are available and consequently the price is low. The main reasons for farmers selling in the high season instead of the low season are that farmers have no/limited place to store the paddy and have an immediate cash requirement in the high season. The joint intervention of FAO and RF aims to ensure that the increased production of paddy will result in a higher income stream for the farmers. This starts with a capacity building program to develop professionally organized farmer groups with sufficient agronomical, managerial and financial knowledge and skills.

The first round of capacity building training has been provided in 2014. At the same time, the farmers started saving for the construction of a warehouse, which can be partly financed by Rabobank Foundation. A warehouse receipt system can enable the farmers to store their produce and sell it in the low season against higher prices. This is expected to have a significant influence on the income of the target group.

Also in the other countries where FAO and Rabobank Foundation work together, we aim to bundle our strengths to build business cases and support farmers groups in becoming more self-reliant.

Why are public-private partnerships so important to achieve global solutions to global problems?

The challenges that the farmers are facing in countries like Ethiopia, Kenya and Tanzania can be quite complex. Involvement of multiple stakeholders is needed for further development of the agri sector. We therefore believe that working together with partners with complementary expertise, knowledge and networks is crucial to make a real difference in these countries. Local governments are critical in such co-operations and we are therefore happy to work with FAO with a strong network of governmental agencies at both regional, national and international levels.

What does it mean for Rabobank partnering with FAO to end hunger?

As the foundation of a leading Food and Agri bank, food security and agronomical development are key topics. We believe that working together with an organisation like FAO could accelerate the realization of our mutual goals. We highly appreciate FAO’s long term commitment and vision with regard to the topic of food security which is needed for smallholder development.