Meet the bank with a big heart for farmers and farming


In this Meet the Co-op Farmers episode we discover the bank that’s well-known globally as the world’s biggest agricultural bank. Rabobank Australia is a subsidiary of Rabobank, the global co-operative bank based in the Netherlands, and is committed to operating with the same co-operative mindset and commitment to farmers, agriculture and global food security. Rural journalist Michael Cavanagh sat down with Marc Oostdijk, General Manager Knowledge and Networks, Sustainability and Community Engagement at Rabobank to find more about this bank with a big heart for farming and farmers.

In this episode you’ll learn:

  • How a small town in Germany demonstrated the power of co-operative action leading to a global banking revolution
  • The impact of empowering thousands of farmers across the world to form local co-operatives
  • How Rabobank operates under co-operative principles in Australia
  • What the Rabo Community Fund does to support Australian farming communities

You can also read our story to discover the Rabobank story and hear how the bank is making a difference in rural Australian communities.

Listen to S2 E04

S2 E04 transcript

Melina [00:00:02] Cooperatives in Europe have been a big part of life, particularly in the primary producers sector for hundreds of years, and the Netherlands in particular has a culture of these co-ops. One of the highest profile operations is Rabobank, which has evolved from a group of farmers that got together, would you believe it, 130 years ago. Around 10 years ago, Rabobank came to Australia and New Zealand and while it doesn’t operate as a co-op here, it is very much run along the lines of its parent operation, which it comes to culture and ethos. BCCM’s Michael Kavanagh had a chat with Rabobank’s, Head of Sustainability and Community Engagement Marc Oostdijk. Michael, in what way does a very large bank bring that co-op mentality to its Australasian operation?

Michael [00:00:53] Melina like the bank’s origins in the Netherlands, it’s still very much in the primary sector here in Australia and New Zealand, but not just providing finance to farmers. It goes out, works closely with its client councils, which comprise farmers around the country, and this has led to projects around financial skills, not surprising for a bank, I suppose, but also mental health and tertiary education for primary producers. This has come about, not surprisingly, with that co-op beat. Co-ops, they’re very much linked to the rural community, although their banks and other operations that these days cooperatives are also involved with one country that has a long history involved with co-ops and probably very much at the rural section. Initially, it’s the Netherlands and one of those co-ops, which has certainly branched out, but still with very much rural roots is Rabobank. And it’s had something like 130 years involved as a co-op in the banking sector with the rural area as well. And Mark Isaac is the director of sustainability and also the community fund, which we’re going to talk about as well. Mark, first of all, thanks very much for joining us.

Marc [00:02:27] Thanks for having me, Mike.

Michael [00:02:29] Marc the history of co-ops essentially came from the rural sector, but the Netherlands in particular as it got a very strong culture even today of co-operatives, what do you put that down to?

Marc [00:02:45] Yes, good question, I think what has been very interesting, certainly also in the history of our organisation, of becoming and making the choice a deliberate and conscious choice to actually become a co-op is that they were very much inspired by Mr. Raiffeisen, who was a real pioneer in relation to co-operative thinking in the mid-1800s. And that story is quite remarkable, he was chosen to be a mayor at the age of 28 and was asked to actually go to a certain village of which he was going to be mayor of. And when he arrived there it was very clear that community, that village was quite poor. They saw very little prospect for the village. There was no school. There was no bakery. There was a little bit of agriculture happening. But at that time it was also very much the case that there were a number of what we could call loan sharks around that would be very happy to actually give personal loans to small farmers with almost certain expectations that they would not be able to pay it back and then would show up at an auction when the farmer was going to be forced to sell the land and grab the land for a very small price. And that sort of injustice was seen by Raiffeisen, obviously, he saw it as very unfair, and that was basically for him the first inspiration to actually say, we actually need to get to come together as a community, stop this from happening and become self-sufficient. And I think that self-sufficiency is something which became the real cornerstone of his policy going forward. So history tells us that he basically mobilised the village, but he also mobilised something else. He actually said, okay, for us to become self-sufficient, we need to organise our agricultural production better, and in order to do that, we need to invest. How do we get money? If we don’t have it in town, we need to get it elsewhere. So he basically called upon his contacts in the city to actually say, you’ve got enough money around, if you want to look for a return on this money, you could invest it in my village and I will make sure that I will mobilise the community, get agricultural production going and make sure that I can actually pay you a return that was obviously, well, music to their ears, and he managed to actually get money into the village, managed to get, buy everything required for agricultural production from seeds to also at that time what was known as machinery. But very soon the village became quite successful in agricultural production. Money was starting to flow into the town and they could actually afford to build a school as a community to build a bakery as community. And things were going a lot better in that town let’s say within three years, it was completely on its feet, and that was for him the first proof of being able to mobilise the community. But very much so, making sure that people understand that self-sufficiency is the path forward. Nobody wants to be depending on government for handouts. They basically shape their own, they shape their own future and that was the end of that, that became the major inspiration of the first founders of the bank. Later on in the late 1800s, because Mr. Raiffeisen’s philosophy was at that time spreading throughout the whole of Western Europe.

Michael [00:06:44] So Marc, did they have the initial idea of, what’s more the traditional co-op that the farmers were getting together and producing or was the money and therefore the financing and a very small bank in the first place, was that also an initial part of it or that just came on as they expanded and needed to continue to provide a really good co-op?

Marc [00:07:09] Yes, I think those things actually came together through those first steps. They noticed that sharing the load and being able to evenly and fairly share income and also investments that would really create a better position for everybody. And that was the general idea about the community, they wanted, not individuals to flourish, they wanted the community to flourish. So access to capital in a fair way and even also later on for the bank, more, let’s say, cash-rich individuals helping others to actually grow as well that became basically the spirit of the co-operative access not only to finance but also access to knowledge and networks became very important at that time. So basically, the first 30 farmers that formed the co-operative in the late 1800s basically said it’s not only enough that we are doing well, we need our community to do well because in the long run that will be better for us as well. And for that, we are going to pool our money but we are also going to pool and make available our knowledge and our networks to help others. And that basically mobilised the expertise and the knowledge to grow the community, and therefore they became self-sufficient. So that was that value those values and that lesson learnt from Mr. Raiffeisen In the 1800s used as a value platform for the co-operative by the bank.

Michael [00:08:48] Rabobank has got a major reputation as being a huge player when it comes to the primary sector. Therefore, in the Netherlands, does it still look at financing co-ops? Obviously, it’s in other areas of financing and investment, but is it still driven by looking at potential partners and still having preference towards co-ops?

Marc [00:09:14] I think we are a very strong advocate of the co-op model. And one of the ways in which we demonstrate that is actually also to help others become a co-op if they want it. And one of the most clear examples is happening in the area of our Rabo Foundation in the Netherlands. So all the lessons that the bank has learnt on becoming a strong co-operative, we utilise that in the developing countries in which our Rabo Foundation is based. So I’ll give you an idea when we would do our work in some of the developing countries in Africa, we come across an enormous amount of smallholder farmers. Those smallholder farmers individually do not have much power to actually determine their day or their future. But combined, if they combine their resources, they could do actually create a better future for themselves. So I remember the story of a rice co-operative. Basically, there were, I think, in this case, 11,000 rice growers, smallholder farmers in Rwanda that were each doing their own thing. But they were not united and they had issues on both sides. They had issues to attract money because they were as individuals, not cash-rich, and maybe also for many financial institutions, too risky to bank or also unmanageable to bank in those big numbers. But they also had an issue in finding an offtaker for their product because the quantities were obviously very small. So what the bank has done is utilising their expertise in setting up a co-operative and helps the rice growers to set up their co-operative so that co-operatives became a much more interesting partner for the bank because we could actually service the thousands of rice growers through that co-operative. And we could also access our own network of rice offtakers to actually say, we actually have this very interesting co-operative in Rwanda selling rice through to co-operatives. And basically, you could offtake that instead of dealing with 11,000 individuals, you deal with the co-operatives. So being able to lend your expertise in that space to set it up, make part of the management for a certain amount of time until there is enough comfort within that group to actually do that themselves. And that’s the way, I think, we effectively help these groups get stronger in countries like Rwanda, Mozambique, Tanzania and so forth.

Michael [00:12:03] So does the bank, if it goes into that development fund to a certain country, if you use Rwanda as a very good example, does the bank then also operate in that country or is not a necessity that the bank is operating in that country for the development fund to be also used?

Marc [00:12:19] Yes, it’s not a necessity. We have a number of countries where we actually are based with an affiliate of the bank, but there are also enough countries in which we do not actually have a physical presence. But we are active through the Foundation. And yes, I think that’s the way that we support these countries. Rabobank always looks quite selective to that because we’d like to look at countries, obviously, that have also significant agricultural potential because we do believe that these countries can also contribute to global food security. If a number of things are better organised that will be good for the market at large. It will also be good for the farmers and smallholders in those areas and through this the bank has been able to help more than 5 million smallholder farms in those countries.

Michael [00:13:16] Marc, the actual co-operative and Rabobank, the only place it still is a pure co-op model is in the Netherlands. The rest of the world for various reasons, you operate as a company in Australia. Rabobank is a company. What’s prompted that and not going down the co-op path in each of those countries?

Marc [00:13:37] Yes, a very good question, I think legal structures around co-ops are specific. And the way that the company started to branch out internationally, I would probably say from the late 70s onwards, they chose a model where they could have better control over the development of that local business by turning it actually into a branch without starting to get into all sorts of legalities of how a co-operative system works in the US or in Australia or in New Zealand or in Argentina and Brazil. I think they’ve chosen for that model as an affiliate of the bank, but always had in mind that, first of all, they want it to behave like a co-operative in that area. And secondly, if the time is right to actually see, how can we optimise that co-operative model so that clients of the bank really notice that they are a client of a co-operative bank. I personally think that the legal structure of a co-operative that’s one thing, but the most important thing is that we behave as a co-operative for our clients. And I think that’s a key thing that we’ve always kept in mind. So client participation is, for instance, extremely important for us. I know that our, one of our board members has this favourite saying, if you want to become a better bank; you have to reach out to the outside world because they can tell you. And I think that’s what we use. We’ve started in Rabobank Australia about 10 years with setting up our client councils so not a members council but the client council, but with the same spirit in mind. We wanted to listen to clients what keeps them awake at night in the industry, in the community, but also capture their feedback on the strategy of the bank and the products and services that we have. So they are basically the representation of our client portfolio and they have quarterly meetings with us in seven locations in Australia that’s seven times for meetings on an annual basis that’s a good dialogue to get real good direction for the bank on where we can be relevant. Wanting to be relevant and maintaining that relevance is a very important factor for the bank and we use our clients to inform us.

Michael [00:16:15] How difficult is it? You’ve got obviously the board members, you’ve got company law in Australia and you want to deliver a profit. Then you’ve got your masters in the Netherlands. It must be a bit of a juggle, although Rabo must be used to this having to operate in different environments in different countries.

Marc [00:16:32] Yes, well, true and obviously you need to be agile as an organisation to deal with those sort of situations. I think what is very important is that the bank, when it started to branch out, always made very good choices about recruitment, making sure that we were working with a very strong local workforce with a number of sometimes key positions being taken care of by people from the Netherlands. I think in our workforce of 1,500, 1,600 people, we may have just 15 people from the Netherlands, but they do provide that link back to the head to the Netherlands, making sure that we get that link into management. At the same time, everybody that is recruited here is specifically recruited not only on their skills as far as an agricultural lender, but also is very much connected to the values of the bank, making sure that clients first, long-term approach on the relationship that’s the important point that we have and no profit maximisation. Obviously, a co-operative should not be confused with a not-for-profit. A co-operative also requires oxygen, and it needs to be able to reinvest in itself. One of the core values of a co-operative is that you are a rock solid bank and financial partner for your clients, so you cannot weaken your position. You need to be strong and be able to actually be a financial partner for the long run.

Michael [00:18:04] I’m Michael Kavanagh, and this is the Business Council of Co-ops and Mutuals podcast, and I’m talking to Marc Oostdijk, who is the Rabobank’s Head of Sustainability and Community Engagement, and that community engagement in Australia takes in various forms. Marc, you’ve mentioned about the development fund that Rabo does with countries such as Rwanda, developing countries. While it’s not a development fund, you’ve now got operating in Australia and New Zealand, a rural community fund. And I think what the initial figure is $2 million?

Marc [00:18:43] That’s correct, yes.

Michael [00:18:45] So how does that operate because you’ve also mentioned the councils and the client councils themselves, how does that operate?

Marc [00:18:53] When we started out with our client councils about nine years ago, we wanted to do two things. First of all, create a good link to our senior management with our clients. Sort of our clients would have access to senior management through those meetings. And secondly, like mentioned, also be able to listen to clients to know what keeps them awake at night because if we know what their material methods are, we have a much better chance of being active in areas where it’s relevant, where it really matters. So we started out by organising our client councils and have regular meetings from these meetings, believe it or not, throughout Australia and New Zealand, we’ve been able to actually form five different themes that is driving the entire client council framework. So those were the most mentioned and the most prominent topics and issues where our clients are dealing with. I can give you a bit of a background on what these themes are. So probably number one, almost everywhere was industry capacity, meaning actually the ability of rural communities to attract an educated workforce so that they could grow as farm businesses and that has proven very challenging. You will hear that from time to time, certainly in moments of harvest and certainly of areas with a lot of horticulture, obviously, because they actually need people above the average in the seasonal peaks but that is clearly a big issue. We’ve also seen agriculture education in many universities declining over a period of time. I think there are some good and positive signs that is picking back up again, also from interest from the city and also women are actually quite interested in looking into agribusiness career so that’s really a positive. But overall industry capacity and also the succession planning are really tabled as main topics. A second area is sustainability, and obviously these days you cannot open a newspaper without seeing, you know, a target for carbon reduction or emission reduction or let’s say, decarbonising countries or decarbonising supply chain. It’s all over us and I think there is so much happening in that space. Apart from carbon, obviously, there are also concerns in relation to water availability, drought resilience, soil health and so forth that’s really top of mind with many of our farmers. A third one that we are focusing on is the so-called rural urban divide. Farmers are quite also emotional about that fact that, you know, they look in, in many cases, very well after the land, the food production that gets food to the plate in the city. There is little knowledge at the consumer side what it actually takes for food to get to their plate. And yes, sometimes you hear of quite uninformed opinions about, let’s say, farmer behaviour, food production and the impact that it has on nature. So I think that’s a reason for concern for the farmers because they want to be able to actually tell their truths about how they look after the land, how they look after animals in their own way. So the fourth one is health and in particular on mental health. I can still remember when I joined the bank, I came from the Netherlands. I told somebody that I had no understanding of the concept of remote. I said I actually don’t know what remote means. I said, you know, you can you can give me a bicycle in the Netherlands and blindfold me and I’ll bike a certain way within three kilometres, I’d bump into a town anywhere. So, yes, what does it mean? And at the time, we were speaking to a Royal Flying Doctors? It was a social partner of us, and they said, oh, we can solve that for you, just join us on a clinic flight to Tibooburra. So there was a very interesting tour arrived there, and I actually immediately understood that wow in this community of maybe around 80 people, I did remember I had about three pups, so I thought, how does that work out? But it was quite clear that if that team medical team doesn’t land on their first day to man the medical post that area would be completely out of medical attention if they weren’t there. So they do their appointments and their calls on every Thursday in that week. I don’t know if it’s still the same, but that’s the way that community and the area around it have actually access to health care. So that was a big eye opener for me to actually see that. And you can imagine the normal medical staff would man to post, the mental health nurses would go to the pub, obviously not to drink, but actually to ask people if they would know of people that would be in need of their help because those people would not automatically, let’s say, check in themselves. So for us, mental health and health in general is also an action item. And then the fifth topic was the most recent one, which is all about disruption. Disruption obviously presents itself in many different forms. Disruption happens on the moments that global markets get disrupted, sometimes by political fallout and trade position stocks to start to change. Sometimes disruption happens through technology, which in many cases is pretty hard to keep track of because it’s exponential growing. It’s growing very fast. But disruption can also happen in markets. If you are, for instance, a cattle farmer and you basically see the category of animal or, let’s say, alternative proteins grow in the world that may not put a dent into meat demand at the moment. But where does it actually go? So it’s something that’s top of mind. They need to keep track of that and that sort of disruption that they look at. So, yes, I think those five themes together basically became a great tool for the bank to start delivering actions, and that was an important point. We didn’t only want to talk about it. We also wanted to do something about it, and the doing part is very much in partnership with the clients. So we actually go back to the early days of Raiffeisen and trying to mobilise a village to stand on its own feet. We actually do the same with the clients in our client council saying, we now talked about what is keeping you awake at night. Now we’re going to do something about it. Let’s join forces and do it together. So the councils, together with the bank, developed a number of initiatives completely focusing on the five themes, and it’s been very successful today.

Michael [00:26:41] Well, you’ve got those themes and then you’ve broken them down to financial skills workshops. Are you bogged mate? Which has got to do with the issue of mental health that you’re explaining and also tertiary pathways, and you talked about attracting. So you’ve got the $2 million and that’s an annual fund, as I understand it. And that goes in and as I understand also, for example, the financial skills that idea came out from the Dubbo council itself. So does that mean that if there’s one council, they want a particular theme to be addressed? Or are you then turning around and saying, right, these are the five main points. We’re going to use three workshops; three examples, three projects and every council will embrace them. How does it operate then?

Marc [00:27:32] What we have seen over the past nine years that each council almost functions as an incubator. So basically, they all agreed with each other that these are the leading themes, and they started individually to think about, what is something that we could do? And once an idea was born, like, as you say, the financial skills workshop in Dubbo, a couple of people get together and create a first version of it. They roll it out as a pilot. They improve the model. And actually say, wow, this is actually working, and they have organised about 10 of those sessions and they are actually starting to tap other client councils on the shoulder to say, hey, is this maybe an idea for you as well, you know, and the sharing between the councils is a very active element because we as a central team sit in on every meeting. And we also let all of the other council know what is happening in the other councils. So financial skills were picked up pretty quickly as a great idea, and all the councils actually expressed an interest to say, could we develop this programme now further as a national offer? And we said, yes, we can do this. So, you know, we kind of raised the sophistication level, if you like. We also wanted to make sure that we have a consistent delivery of the programme so that it always has good quality. So we also hired a facilitator externally to actually do it. Most importantly, it’s for younger farmers wanting to grow to ownership, maybe not to have had any exposure to tertiary education or business management skills, but they can pick them up here in a basic workshop together with their peers physically or virtually. It’s all possible also a little bit Covid-depending, and they’re offered for free. They’re not for clients alone. They are really a community activity, so we could organise it, the Emerald’s or in Albany or in any area in Australia. We would organise it and reach out to the community to attend.

Michael [00:29:42] Well, you talk there about the different communities and for example, Central Queensland cattle country. You go to other parts of higher rainfall. There’s an increasing growth in the horticulture industries. So therefore you tailor those financial workshops accordingly or you’ve found that there is one size fits all?

Marc [00:30:05] I think in financial management, there are a number of things that are the same across the board. However, what we do is that if we organise it in an area where we could identify a dominant sector, we would tailor the cases that we use in the workshop to that sector because it then basically make sense for the majority. And so any specifics in relation to either dairy or grains or cattle, we would actually integrate in that workshop.

Michael [00:30:38] And the programme Are You Bogged Mate?, which is what you describe as a down to earth approach in raising awareness and getting people to talk about mental health. Now you talked about you’ve got a facilitator that comes in on the financial workshop. With the mental health have you gone outside of the bank or is the bank itself saying, look, we’d like to engage this area of the medical? How are you handling that?

Marc [00:31:03] Yes, good question, I think that nobody in our bank would be comfortable in physical delivery of this topic because this is a very special area. This is even an area where some of the most professional medical approaches wouldn’t work, and that is because of the language. And I’m not talking about English as a language; I’m talking about the rural language. So in order for people to speak out on challenges, it is not easy and it’s stigmatised as well. And if you would start, for instance, to talk about mental health problems, you will find probably a very lukewarm reception of that terminology and people will not come out and speak. And I think the start of a conversation in relation to mental health is extremely important so if you can find a way that people are finding themselves in a safe space to talk about it, and that’s exactly what Are You Bogged Mate is actually doing, Are You Bogged Mate is not run by a medical expert in relation to mental health. This initiative is run by somebody that has been in rural communities for the last 30 years, actually running spray workshops and has learnt the language that is effective for people to speak out and that is much more important as far as us concerned than any kind of like mental approach or sorry medical approach on this topic. So using metaphors is a very strong skill set that Are You Bogged Mate has. They don’t talk about mental problems. They talk about maybe, tongue in cheek a little bit; they talk about a bucket of shit. And if your bucket is very full with all sorts of problems, which could be financially oriented, which could be problems from youth or caused by relationships or any other topic, you basically throw that in your bucket, and at some point it becomes very heavy. And if you do not have the opportunity to share that with somebody else and to speak with somebody else about it, you have to carry the weight of the world on your own. And I think this is what these workshops do very well. They basically invite people to talk about it in the safe space amongst their peers. But using metaphors to actually stay away from words that they actually don’t want to use.

Michael [00:33:55] Marc, the third one that you’ve got is the Rabo Tertiary Pathways, and that’s the attraction of trying to get people back into the bush or working in agriculture-related industry. Does that mean you’re handing out scholarships or are you working with tertiary institutions? Or do you identify bright kids that may be working and looking at a career in agriculture?

Marc [00:34:19] So I think the bank is very passionate about contributing to industry capacity and very much giving promising students a leg up in that space and also obtain hands on experience through our network is a very passionate part of the bank. So we have a relationship with eight universities throughout Australia, which can all actually dedicate one student to the programme, and they receive a $15,000 sponsorship per person that will help them in their tuition fees. But connected to that is also the opportunity to actually work on a project with the bank. So not only obviously helping them with the theory, but also helping them with the practise. They will have exposure to our clients. They will have exposure to departments within the organisation, and they basically will learn how an agri-business bank is working so that is an active connection. Improving the relationship with the university, giving the students a chance to be exposed to the real world and also give them support in their tuition fees and some of these students might end up working for the bank or some of those students through their work are getting noticed by either CSIRO or an agricultural organisation where they can basically progress their career.

Michael [00:35:55] Marc in pulling together the themes and you met with the councils and you’ve continue to meet with them and now you come up with the three main projects, were you aware of this already or did the bank actually say, geez, this has been very handy for us to know what’s going on and what the community is thinking.

Marc [00:36:16] Yes, I think some of these topics come through anecdotally, but I always say, anecdotes can be quite powerful, but usually an isolated story. I think through the conversation with the councils, we’ve been able to actually see the pattern. We see kind of like the priorities in what keeps people awake at night so it definitely helps. Without the client councils, we would not have been able to have a good feeling about doing something relevant back to the community. So for us, the dialogue came first, knowing what is what matters and then delivering on what matters. So it definitely has helped the bank in in knowing what is what is keeping them awake at night, and it helps in other areas as well. Obviously, as a bank, as a significant bank in Australia, we also have an ongoing dialogue with governments. So these topics are also often used to inform people in government about our observations in farming communities and that really helps.

Michael [00:37:25] Marc Oostdijk is the Rabobank Head of Sustainability and Community Engagement. I’m Michael Kavanagh and this is the podcast for the Business Council of Co-ops and Mutuals. Marc, these things always cost money. You’ve put $2 million in initially in Rabobank’s headquarters in the Netherlands; it’s very much that cooperative model. A percentage goes back in and you’ve talked about the development fund in Australia and New Zealand, where this program is also operating. At $2 million that obviously must come from somewhere, is that going to be fixed $2 million each year? How is that going to operate?

Marc [00:38:03] Absolutely, I think our management locally has decided to guarantee $2 million per year for the first three years, and we will look and aim to actually progress to the same model that we have in the Netherlands, where it is more a fixed percentage of profit at the end of the year. I think importantly, we see this really as our investment back into community, but very much to not so much spreading checks and handouts to communities, but mainly in those partnerships initiatives together with the clients. We really believe that involvement on the ground really is beneficial for the success of delivering those projects, and I think that’s quite unique. We have deliberately chosen not to go for a grant model where people can apply for funds, but basically to select initiatives where we can make a difference and deliver those together with the clients and that’s where the money is basically for that’s the main function. Like I said, we will grow to a model where it is fixed as a percentage of profits. What is also quite important is that the budget rolls over into the next year, which basically means if for some reason it has not been spent, it actually gets added into the new year on top of the $2 million investment. I think, let’s say the money component at the moment is not very important for us. What is important is how it actually works in practise. I know, for instance that the share of community fund in the Netherlands is significantly higher because we are obviously a bigger bank there. We want to be very careful that we are not going to spend money for the sake of spending. We want to be able to say, this is something that makes a difference. This is effective and that’s why we want to do it so how that fund is growing in the future also is very much depending on the success of the delivery. And if there is that success of the delivery tastes good, then you will automatically see that ramping up because we can make an impact.

Michael [00:40:25] Bankers, whether you’re a co-op or a company driven by the bottom line, how do you measure the success, like you’ve talked about having you’ve committed for the three years for certain of that figure and you want eventually to be a percentage? How do you actually gauge the success of the three particular initiatives that Rabo is operating?

Marc [00:40:48] It’s actually a very good question, and I’ll always also confess that’s a little bit work in progress how we do them. I sometimes make a joke into the bank that I actually say, in the bank, everything is driven by KPIs. Can we at least work in an area without KPI for a change? But obviously you want to be able to measure success. One of the things that we do as part of this, we have an annual review of our client council model, where all the client council members have an opportunity to speak up and speak out how they experience the journey of being a client council member. And we use a lot of information from that to constantly keep progressing and improving. But we also are in the process of writing our charter and vision document on each of the five themes that I have explained. So we are very comfortable that these are the right topics. We are also very comfortable that some of the initiatives that we’ve delivered really make a difference and are very much appreciated. But now for us, we want to look ahead into 2040, 2050. What does success actually look like for us? What we ultimately want to contribute that will further drive more quantitative milestones; we have one quantitative milestone, the financial skills workshop, for instance. We want to do 5,000 young farmers by 2025. We are on around 2,000 at the moment, so it’s going actually quite good. But I think the chapter on creating that vision towards really long-term and setting the milestones for us that is at this moment work in progress. But like I said, we already know that we are doing stuff in the right places.

Michael [00:42:37] Well, you’ve got the client councils and then overseeing this, you’ve got five members of Rabo in the overseeing committee. There must be some interesting discussions at times when you’ve got the bankers on one side and in the client councils on the other side, although you probably like to think that they’re not on either side, but there must be a bit of juggling.

Marc [00:43:01] Well, it is interesting how this is actually going. I think the nature of the conversation in the councils is extremely friendly and collaborative because basically we are there for the same reason. If you want to contribute to more vitality in agricultural communities, I mean, that’s what’s driving you. So our bankers and our clients are basically on the same page. You could get into another sort of debate on the moment that you offer the opportunity to have feedback on product service and strategy and so forth. But in all the meetings that I’ve been in and I’ve been in many, this first of all, is going very constructive and we’ve obtained some very good hints and tips from our clients to actually say, I understand what you’re doing as a bank, but I’m going to explain to you now how we look at it from the perspective of a client and a farmer. And they provide us sometimes with some feedback that say, that’s good of you to actually to notice and we need to get our front office across this as well, so that at their kitchen table conversations, they know about this so very constructive conversation.

Michael [00:44:20] Marc, this also encompasses New Zealand as well, have you noticed a difference with the client councils there and where the funding is to be channeled as opposed to Australia?

Marc [00:44:35] Yes, well, good question, when we started out, we actually were afraid a little bit that we would have ended up with all sorts of different attention points and themes all over the place. But we were actually quite pleasantly surprised that there was a lot of synergy between the themes in both Australia and New Zealand, to the point that both countries have adopted the same five themes so direction is exactly the same. Obviously, the way that we execute it in the countries maybe different because it also depends on what you can do and who your partners are. But yes, it very much works the same, and there are no differences in how we operate.

Michael [00:45:19] You talked about the co-op ethos that Rabo Australia wants as a company is wanting to still continue that ethos along the lines of what’s in the Netherlands. Do you find it interesting because you said you also engage with government, do you find it interesting at times that you, as a banker, go and talk to government representatives and you’re saying, look, we’ve got this co-op ethos and we’re actually looking at doing things like mental health. We’ve got a fund that’s going into that. And I am kind of surprised because they think bankers; they are just worried about that financial sector.

Marc [00:45:52] Good question, I think everybody that I speak to outside the bank, even some of our clients who may not have picked up on the news yet that we have client councils or we have a Rabo community fund, they are extremely surprised on the moment as we explain how it works. They actually say, wow, you’re actually putting a lot of effort in this. Obviously, the task to facilitate 45 meetings on an annual basis and actually to do something with the outcome and connect your financial resources to it that obviously comes at the cost for the bank. But it is in the spirit of what we aim to do and we can make a difference in that space. And I think apart from what we do with the client councils and the community fund, there are actually quite a lot more things that we do as a bank, which are quite different at some point. We have decided quite a while ago that our clients would be really helped by group market information, good commodity sector information. So they set up a unit globally, of which we also have a department of eight in Australia and New Zealand that is actually called Rabo Research and actually collects an enormous amount of information and data and insight globally and locally about each commodity sector. And they issued their reports and those reports through time have really become a reference for the media and the industry and help our clients to make better business decisions at the end of the day because our clients have access to that information. So, you know, this is a globally organised business unit with more than 80 staff. They are obviously not adding anything to the bottom line, but they actually do fulfill an enormous important function for our clients. And we’ve got, let’s say, the luxury of being able to make that choice.

Michael [00:47:54] I use them very much as a journalist, the commodities, and when I was covering such things as dairy and I found them fantastic. At the same time, if you’re going to educate them on the financial skills workshops, does it worry you that some of the really successful workshops they’re going to be drilling down so tight into those facts and figures that you’re coming out on commodities that they’ll start queuing the bank and saying, well, hang on a moment, is that really right?

Marc [00:48:17] And this may be a personal, but I don’t think it’s even personal reaction from me, I welcome the dialogue, and it might be also a little bit Dutch. I think from Dutch culture, we are happy to get into a debate. And I think if you have a debate that is a golden opportunity for the bank to become more intelligent about how clients think and where we can improve. So I would welcome that debate any time.

Michael [00:48:49] Marc has it also changed the dynamics in the relationship between the farmers and the banks in the sense that if they walk into the more traditional bank and they’ve dealt with them and then now they’re dealing with Rabo and with the co-op ethos, as you’re talking about, has that tended to change the dynamics of how they operated with bankers?

Marc [00:49:14] I think and this is what I hear back from clients, if we have a client that has joined the bank recently, what I often hear from them is that before we actually got into a relationship with Rabo, we knew that they were different, but we did not know how. And now after half a year, I know how, so I think the way that we engage in the relationship, have that immediate focus on supporting clients to achieve their long-term goals and aspirations that’s our key function but they also deal with not really a banker. We sometimes make the joke, you can make a banker out of a farmer, but you can’t make a farmer out of a banker. So I think the bank has recruited very wisely over the past two decades and invested in a front office and a branch network with very knowledgeable people. And our clients do not have to explain farm business to our bankers because 80%, 90% comes from a farm or runs a farm at the site. So these people are peers and so I think that relationship very much focused on long-term and that’s why how people are recruited in the market.

Michael [00:50:34] Marc, does this mean that the fund, if it continues going, that you may be on a small aircraft once again heading out to remote areas of Australia just to get an idea of how the initiatives are operating?

Marc [00:50:49] Oh for sure, I hope certainly that the country opens up completely soon. I think, you know, whilst I live in Sydney, I really love the country and I feel actually very fortunate and privileged that my position sometimes takes me to places and I’m the envy of my friends here in Sydney when I come back with the stories. I think it’s very iconic. It’s genuine and I think our clients and the farmers in the rural areas represent a real backbone of the country. And yes, I love to visit them.

Michael [00:51:27] Marc, it’s been great chatting with you.

Marc [00:51:28] Thanks, Michael.

Melina [00:51:30] Rabobank’s Head of Sustainability and Community Engagement, Marc Oostdijk.

Michael [00:51:36] We’ll hear more about co-operatives in our next BBCM podcast.

Melina [00:51:41] I hope you enjoyed this latest episode of Meet the Co-op Farmers. If you’d like to know anything about setting up or running a successful agricultural co-operative, you can find out everything you need to know at the Co-op Farming website that’s that’s right coop for co-operative. Please share this with your mates. If you enjoyed this story, we really do want to get the great stories of farming cooperation out there and remember in a troubled world with all of the challenges, but also the opportunities we have, we really are better together. I’m Melina Morrison and I look forward to seeing you on the next episode of Meet the Co-op Farmers.

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