The co-operative spirit of Rabobank

After the banking royal commission, Australians have become wary of unscrupulous practices within our financial institutions. But co-operatives and mutuals in the finance sector operate with a people-centre purpose and exist for the benefit of their members. One such bank is Rabobank, based in the Netherlands but now a part of the fabric of Australian agriculture. Renowned rural journalist Michael Cavanagh spoke to Marc Oostdijk, the Head of Sustainability and the Rabo Community Fund for Rabobank in Australia and New Zealand, to discover the Rabobank story and hear how the bank is making a difference in rural Australian communities.

In the mid 1800s, the inhabitants of a small German town, Flammersfeld, had no idea how their story would impact people on the other side of the planet almost 200 years later. A poor village which lacked basic services, the community gathered under the visionary leadership of Friedrich Wilhelm Raiffeisen, chosen to be their mayor at the young age of 28. After seeing the rampant injustice and exploitation of the townspeople, and the potential of the area to become a thriving agricultural hub, Raiffeisen mobilised the community to become self-sufficient through what we now recognise as co-operative business principles. Securing initial investment through Raiffeisen’s city connections, the town experienced a complete turnaround in only three years, prospering and inspiring countless other groups to harness the power of co-operation. Communities across Europe realised that by pooling their resources, networks, knowledge and money, more people could thrive.

As this concept spread throughout Europe, Rabobank was established in the Netherlands as a financial co-op supporting agricultural businesses. Fast forward almost 130 years and the bank is still fulfilling its mandate, having expanded internationally while retaining its core purpose of supporting rural business.

The Rabo Foundation in the Netherlands is dedicated to assisting farmers to form and run co-operatives. In African nations including Rwanda, Mozambique and Tanzania, they have helped thousands of smallholder farmers to unite using the co-op structure, allowing them to establish a collective presence in the marketplace and engage in meaningful trade. The Foundation does not restrict its work to communities where they have a banking presence, instead focussing on places with the potential for positive impact. This approach also helps Rabobank contribute to global food security; through the foundation they have been able to support more than 5 million smallholder farms worldwide.

Outside of the Netherlands, including here in Australia, the bank is technically a company and not a co-operative – this allows them to navigate the many complex international legal systems. However, Rabobank Australia is still governed by co-operative principles, and as Marc notes “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”. Rabobank operates client councils around the country to receive feedback from clients in the same way a co-op receives member feedback. “Wanting to be relevant and maintaining that relevance is a very important factor for the bank and we use our clients to inform us” is what Marc explains is behind this commitment to listening.

Five themes have emerged from the client councils in Australia and New Zealand which Rabobank uses to inform their community initiatives. Marc notes that there was a remarkable level of synergy between the priorities identified by the different councils, regardless of location. The five themes are: the challenge of attracting an educated workforce to rural areas, environmental sustainability, the rural–urban divide and the lack of understanding within the cities of what it takes to get food onto a plate, mental health concerns for farming communities and disruptions caused by market forces or changing consumer preferences. In engaging with their client councils, Marc explains “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’ve now talked about what is keeping you awake at night. Now we’re going to do something about it.’”

In response to these five themes, the Rabo Community Foundation was launched with the bank making an initial commitment of $2 million funding per year for three years. This has led to financial skills workshops, as well as the mental health program “Are You Bogged Mate?” which has been specifically designed to serve the needs and culture of rural communities. Another initiative is Rabo Tertiary Pathways, which provides scholarships and industry experience for tertiary students who demonstrate a commitment to building Australia’s agricultural capacity.

Key to making a positive impact on rural Australia has been careful recruitment. Clients deal with staff who have lived experience of farming life and understand its inherent complexities. Marc notes the in-house joke that “you can make a banker out of a farmer, but you can’t make a farmer out of a banker”!

Marc and his team are excited about what lies ahead for Rabobank Australia and the Rabo Community Fund. Having already delivered the financial skills workshops to 2,000 people, they are on target to reach 5,000 young farmers by 2025. They are already seeing strong results from their programs, but are also comfortable taking the time to build the right long-term strategy to ensure their initiatives deliver what rural Australia actually needs.

One thing is certain: whether facing times of natural disasters and hardship, or times of bumper crops and perfect weather conditions, the rural communities of Australia can rely on Rabobank being there not just to understand their unique financial needs, but to also offer communities and individuals holistic support. As Marc says, “I think our clients and the farmers in the rural areas represent a real backbone of the country” – we couldn’t agree more.

Listen to our interview with Marc Oostdijk, the Head of Sustainability and the Rabo Community Fund for Rabobank in Australia and New Zealand, on our Meet the Co-op Farmers podcast.

Visit the Rabobank Australia website.