The EU subsidizes Rabobank

 

Pyramid game with prices of agricultural land

Since the Second World War, Rabobank (formerly Raifeissenbank and Boerenleenbank) gradually became a monoplolist in lending to Dutch farmers. Rabobank provides work for the appraisers. They are fully dependent on Rabobank and follow its instructions.

When a farmer stops, he sells his land. If the value has fallen, he cannot pay his debts. If the value has risen sharply, he can pay his debt to Rabobank and has a pension.

As soon as the value of the land decreases, Rabobank has a huge problem. All farms will have debts far greater than the value of their property. Then the Rabobank will have to write off a huge amount of money. That is not what the bankers want. Fortunately, the appraisers work for Rabobank. That makes life a lot easier. Every year the land is valued higher. The farmer is happy and the Rabobank is happy. The debt is always passed on to the next generation of farmers.

 

What is the value of agricultural land?

Currently the appraisers of the Rabo bank state, that farmland has a value of more than 80,000 euro for a ha (10,000 square meters).

• The Rabo bank is since the '1970s the bank of the farmers. All appraisers for farmland work for the Rabo bank and are dependent of the Rabo bank. An appraiser that did not want to follow the demands of the Rabo bank testified to me, that the Rabo bank did no longer asked for his services.

• Since the '1980s the Rabobank has been driving up the appraisal of farmland. Because of this, farmers did not go into bankruptcy. So on paper, the Rabobank did not loose money on the farmers. The debts were shifted to the next generation of farmers. And now the farmers are burdened with enormous debts, because the price of farmland has become obscene.

 

One ha. delivers 45 tons of potatoes. That is about 9000 euros. In order to grow and harvest those potatoes, the farmer has to incur costs. That is about 7,500 euros (in 2019). So a ha. yields 1,500 euros. And that is a very optimistic estimate.

The farmer also has to make some money. And he needs to set aside a part of the revenue for years with failing crops. Say 1,250 euros. That leaves 250 euros for the land. If you multiply this by 30 years, you get a value of 7,500 euros per ha.

The appraisers of the Rabo bank were forced to increase the appraisal of the farmland every year. The average selling price of a ha of farmland is therefore almost ten times its value in use. This can of course not go well.

This scheme is in fact a pyramid scheme. In decent countries that would be illegal. But not in the Netherlands.

 

Rabo bank steals all EU subsidies from farmers

The appraisers artificially raised the price of farmland every year. If the farmers had payed the real value of the farmland, then former farmers had gone bankrupt.

With this scheme, the Rabobank prevented bankruptcy of farmers. So they did not have to write of debts. They shifted the burden to new farmers. The farmers have to pay interest on their debts. They pay these interests to the Rabo bank.

And this is how the Rabo bank steals all the European agricultural subsidies from the farmers.

All the politicians in the Netherlands know this. And they all look away.

The farmers get subsidies from the EU. And they have to hand these subsidies over to the Rabobank to pay for the interest on their loans.

In 2018 the EU gave a standard subsidy of 267.34 euro per ha. This means that the EU will actually double the yield of the land. Why does the EU do this? This money ends up at Rabobank and similar banks. It costs the taxpayer a lot of money. And the farmers don't get anything out of it.

 

 

Is the Rabobank almost bankrupt?

People who know the Rabobank will initially laugh at this title. The rabobank is known as one of the richest banks in the world. They don't go bankrupt that fast, do they?

But is Rabobank really that rich? Or are their books wrong? 'Did they cook the books?'

 

 

Pyramid game

The Rabobank has lent a huge amount of money to Dutch farmers. Their main collateral is their land. The debts of these farmers should be covered by the value of the land.

This raises the question: How much is the value of farmland? Or rather: Has Rabobank been messing around with the value of the farmland?

 

 

Nitrogen crisis

This pyramid game went well for decades. But now the government has to take nitrogen measures. As a result, the cattle of the farmers must be halved. Oops! Now the whole house of cards is collapsing.

If farmers produce less per area of land, the value of agricultural land decreases. Presumably, the appraised value of the land is about eight to ten times ( !!! ) the value of the use. This could mean, that the Rabobank has to write off 80 percent of the amount lent to the farmers.

Will the Rabobank survive that ??

 

End pyramid game

By now, Rabobank's policy and the EU's agricultural policy have come into direct conflict with physical reality. A catastrophe is looming for the farmers. In fact, almost all Dutch farmers are on the verge of bankruptcy.

It is possible to save the Dutch farmers. But then we have to sacrifice Rabobank.

• We should oblige Rabobank to remediate all farmers' loans.

  Since Rabobank played a leading role in the pyramid game, this is very reasonable.

• Arable land prices must be brought back into line with the actual value in use. The net yield of the land must be the basis of the value.

• Farmers should receive income support as far as they need it. They work for society and for the people. If we don't reward them enough, it's actually slavery.

  You could also say that the farmers are just treated like money cattle. If you can read Dutch, see De Boeren: Het geldvee van de Rabo bank

Nepotism and cronyism in politics

It is of course unlikely that Rabobank will be sacrificed. Rabobank has friends in The Hague and Brussels. The farmers there are hardly welcome.

But Rabobank has a problem. The farmers now realize what Rabobank has done. They are very angry now. And rightly so!