Rabobank has been lowering credit for farmers for years

Rabobank has continued to reduce the outstanding credit with farmers and horticulturists since 2011. Each year, this credit was reduced by €600 million. This is apparent from reporting by the Financieele Dagblad (FD).

Rabobank sees that demand from this traditional target group of the 'farmer's loan bank' is declining. The reason for this is a lack of clarity about future environmental regulations. Rabobank has also become more critical of financing, which is a result of the credit crisis. Annual reports show that the outstanding credit has fallen by €2011 billion to €4,3 billion since 26.

The FD writes This decrease is striking, given that the agricultural sector has become more capital-intensive since the Second World War. In addition, the sector is on the eve of several costly investments, partly due to the new climate requirements. By contrast, Rabobank still has a market share of 85% in the financing of farmers and horticulturists. 

Less invested
According to Rabobank, agricultural entrepreneurs have invested less because they want clarity about climate policy. In addition, dairy farmers have been waiting for developments in the system of phosphate rights over the past 2 years. According to Carin van Huet, the director of Food & Agri, Rabobank is focusing on shorter loan terms. In addition, the collateral that the entrepreneur brings is included less than the cash flow.

The bank also wants farmers to be able to finance more themselves. The requirement is that, as with other companies, there must be a solvency of at least 30% to 40%. The decrease in the number of farmers in the Netherlands is also a reason for the lower credit that Rabobank has outstanding.

Anne-Jan Doorn

Anne Jan Doorn is an arable expert at Boerenbusiness. He writes about the various arable farming markets and also focuses on the land and energy market.

aj.doorn@boerenbusiness. Nl

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