From local champions to global players

Essays on the history of the dairy sector

Edited by

Paulina Rytkönen, Luis Arturo Garcia Hernandez

and Ulf Jonsson

Stockholms Studies in Economic History 61

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© The Authors and Acta Universitatis Stockholmiensis 2013
The publication is available for free on www.sub.su.se
Cover: Martin Ragnar
Cove photo back: Martin Ragnar (Cheese makers in Flen)
Cover photo front. Seppo Rytkönen (Cheese maker in Mexico)
ISBN Electronic form: 978-91-87235-31-3
ISBN Printed form: 978-91-87235-32-0
ISSN 0346-8305. iii
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Contents

Foreword ......................................................................................................... 9

Part I. From Local champions to global players – An overview of the

historical development of the dairy sector

1. From Local Champions to Global Players - the structural transformation

of the dairy sector in a globalization perspective .......................................... 19
Paulina Rytkönen

Part II. National Experiences in the History of the Dairy Sector

2. From small scale artisan and farm house production to a global player:
The French dairy sector in the post-war period ............................................ 45
Ulf Jonsson ................................................................................................... 45

3. Policy, technology and development in the Mexican dairy sector ............ 57

Luis Arturo Garcia Hernandez

4. A Community Resting on Butter: Agricultural Cooperatives in Estonia in

the Beginning of the 20th Century ................................................................. 73
Johan Eellend

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Part III. Politics, Corporatism, Competition, Environment and Modernity

5. Margarine – A Scapegoat Milked by Many Maids - A brief history of

margarine in Sweden with an international background ............................... 95
Bengt Åke Berg

6. Corporatism in Action - The Swedish Dairy Regulation of 1932 ........... 113

Fredrik Eriksson

7. Wholesome Milk..................................................................................... 127

Håkan Jönsson

8. From Corporate Threat to Brand Value, The dairy firm Arla and the
environment challenge ................................................................................ 143
Oskar Broberg

Part IV. From Ancient Cultures to Modern Politics

9. Traditional dairy practices in Cantabria .................................................. 157

Eloy Gomez Pellón

10. Gailtaler Almkäse – Regional development through Protected

Denomination of Origin (PDO) .................................................................. 171
Karl Gratzer

11. Only France has cheeses like these, niche production in the dairy sector
and the role of geographical indications (Appellation d’Origin Controlée)193
Ulf jonsson

List of contributors...................................................................................... 213

Stockholm Studies in Economic History .................................................... 217
Acta Universitatis Stockholmiensis publications ........................................ 221

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 Foreword

In 2006, the academic debate on the globalization of agriculture and the food sector focused
unilaterally on the emergence of commodity/supply chains for so-called non-traditional
agricultural products such as vegetables and fresh fruit. There was a lacuna of knowledge
concerning the pervasive and dynamic process of change that affected the production and
distribution of traditional agricultural products such as milk. To address this shortcoming Ulf
Jonsson and Paulina Rytkönen initiated a research project with financial support from the
Swedish Science Foundation. The project was named “From Local Champions to Global
Players: The Dairy Sector in the Global Market – A comparative study of Denmark, France,
New Zealand, Uruguay and Chile” and had the purpose of analyzing the transformation of the
dairy sector from a national to a global industry.
A fieldwork conducted within the frame project, and that was undertaken in 2008, brought
Jonsson and Rytkönen to Mexico, one of the most important dairy markets in the Western
Hemisphere, where a long-lasting academic cooperation was established with professor Luis
Arturo Garcia Hernandez, the Department of Rural development at Universidad Autónoma
Metropolitana, the Department of Economic History at Stockholm University and the
Department of Life Sciences at Södertörn University. The present volume is one of the many
results of our cooperation. The purpose of the book is to, under the same umbrella, present
different perspectives on and experiences from the history of the dairy sector in different
countries. Although the number of country studies included is limited, the perspectives
presented include a representative variation of topics that have been or are currently relevant
for most dairy countries.
From a historical perspective, dairy research has been conducted in virtually all dairy
countries. One specific characteristic is that research activities have been well integrated in
the articulation and development of the industry. Researchers have, for more than a century,
taken active part in agricultural extention activities, side by side with technicians, engineers
and qualified staff from the industry in search for practical solutions to the everyday problems
encountered at the farm and at the industrial level. These efforts have been constrained, fueled
and/or directed by national and international policies.
The main topics highlighted by previous research can be divided into three distinct areas.
The first is research about farm aspects of milk production, for example genetics, farm
management, pastures and mechanization that led to the emergence of different production
systems in various countries and continents. This type of research is mainly conducted in
universities and dairy research centers in Canada, the United States, most European countries,
in South American countries, Australia, New Zeeland, India, just to mention a few.
The second line of research deals with industrial aspects of milk and dairy production and
includes not only processing activities and product development, but also infrastructural,
product safety and nutritional issues. This research has been conducted at universities and
research institutes, but the industry has also played a key role in this area since the 19 th
Century. Research results, technical solutions, problems and possibilities have also been
disseminated and discussed at the international level within the frame provided by the
International Dairy Federation for over more than a hundred years and the Food and
Agricultural Organization of the United Nations (FAO).

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The third is the socio-economic research within which an important proportion focuses on
state policies and the values embedded in the promotion of milk as a product with superior
nutritional value. It is impossible to mention all research centers and universities in which
dairy research is conducted, but some of the most internationally well-known are the Babcock
Institute for International Dairy Research in Winsconsin, the French INRA (L’Institut
National de la recherché Agronomique), Maison du Lait, The Lennoxville Centre in Canada,
the National Dairy Research Center in Kernal in India, The livestock Research Centre at
Wageningen University in the Netherlands, The Lincoln University in New Zealand, and at
the Dairy Centre at the University of Tasmania in Australia and the Danish Government Dairy
Research Institute in Denmark.
In spite of all previous research, there are still a number of important gaps of knowledge
concerning the agro-food sector in general and the dairy sector in particular. The content of
this volume endeavors to fill some of these gaps.

Contributions in the book

Theoretically and empirically, the following chapters deal with the emergence of a business
and focus on the interplay between policies, state actions to reduce or change transaction
costs, as well as the environment in which the dairy sector has evolved over time. In this
context, the role of the state is especially noteworthy. Because dairy products have played a
key role in the food security strategies of most industrialized countries, the sector has been
manipulated by state interests, prices have been regulated and subsidized, and exports have
been subject to state intervention. These features have been widely recognized in previous
research. However, the actions of the state regarding the formation and development of the
trade have gone far beyond policies, reforms and institutional setting, as it many times took
the leading role in planning, organizing and making strategic decisions to develop the
business and articulate markets. Only during the most recent decades has the role of the state
partially declined; the impact of transnational corporations and financial players in
combination with a qualitative technological shift has combined to alter the power balance of
the trade.
All chapters in this book contain representative examples of topics that are relevant to the
development of the sector. The link between the cases is that they are all aspects of the same
story. The chapters follow a thematic order and have been organized into four sections. The
first contains an introductory global overview of the sector with the articulation of the
industry from the 19th century until today. The second section is composed of national
experiences The third part of the book contains five chapters, all devoted to specific topics
focused on politics, corporatism, competition, environmental issues and modernity. Lastly, the
final section contains three chapters on traditional dairy cultures and their way into modernity.

Part I. From Local Champions to Global Players

Paulina Rytkönen offers a general overview of the development of the dairy sector at a global
scale. Rytkönen places the development of the industry as a process with similar features that
took place within the framework of national states all over the world from the 19th Century
and until 1985. From that point on Rytkönen argues that the main decisions and events
influencing the development of the dairy sector take place in a global arena, in which strategic
decisions are taken in the boardrooms of transnational dairy companies. Although it is
difficult to propose a universal scheme for understanding the development of the dairy world,
Rytkönen uses the interplay between innovations, institutional setting and the changing
structure of the industry - from farm to dinner table - as common elements that shaped and
conditioned the articulation of the sector over time. The timeline implemented departs from

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the food regime approach that states that there have been three food regimes in world history:
the first, British-centered between1870-1914 refers to the organization of international
production and trade under British hegemony and was mainly dominated by the interplay
between the United Kingdom, its colonies and new settler economies. The second, post-war
US-centered food regime is dated between1945 and 19851, during which American food aid
became a key element in the organisation of international food and agricultural relations and
also a main tool used to establish and maintain US hegemony in developing countries after the
Second World War. Finally, the third and current food regime that is different from the
previous two by a shift in power from policies in the national state to global sourcing
strategies of transnational companies.
Rytkönen concludes that the dairy industry, as an organized economic sector started to
emerge during the 19th Century in response to the needs of industrial and urban societies.
Most of the early technologies focused on the development of products that we today take for
granted and on a need to increase scales, improve sanitary conditions and create basic
conditions to sustain the local and national trade with dairy products. During the late 19th
century, farmers became organized and started to play an important role in influencing
policies and shaping the development of the industry. The farmers’ influence was greatest
during the second food regime and was characterized by public policy and regulations that
aimed to achieve food security and food safety. These policies recasted the global milk market
inserting market distortion as a permanent feature of the sector. Present times are described as
the interplay between the remnants of the second food regime and a dramatic increase in the
level of competition that fueled the development of new technologies which, in turn, enabled
a dramatic market enlargement to Asia and the Middle East. The comprehensive approach
used in this section frames the following chapters with a broad empirical and theoretical
background.

Part II. National experiences in the history of the dairy sector

The second section in the book is devoted to important issues involving the formation of the
dairy sector in three different countries, namely France, Mexico and Estonia. Two of the
chapters offer a long term view of the development of the sector, while the third highlights the
early process the sector’s formation.
The first of these, written by Ulf Jonsson, highlights the modernization process of the
French dairy sector that took place after World War II. In many senses this is a classic case of
market development. The technical renewal that is a key component in a modernization
process helped rising output, which increased the level of competition. Since standard dairy
products offer little room for differentiation, except in the case of price and packaging, for
those medium-sized companies that lacked a niche strategy, a unique specialization, or the
financial muscles to grow, the market conditions deteriorated and they were forced to face
increasing difficulties. At the same time, large companies like Danone, Lactalis and Bongrain
managed to grow, partly at the expense of those medium-sized firms that gradually
disappeared. The large companies were able to articulate global strategies that granted them a
leading position and one of Jonsson’s conclusions is that further consolidation and a
strengthening of the already large and global French companies is to be expected. A unique
feature of the French case is that large transnational companies emerged side by side with a
strong and well-organized artisan cheese sector. The combination of global players and strong
small scale elaborators has created a dual market structure.

1
Friedmann, Mc Michael and others dated the end of the second food regime to the 1970’s. Rytkönen has actually adjusted
and prolongued the dates until 1985, a year that represents a watershed between the features of the Second food regime and
the start of the articulation of the current, global food regime in the context of the dairy sector.

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The second country case was written by Luis Arturo García Hernández and presents the
development of the Mexican dairy sector outlining how policies – from the conquest of
Mexico by Spain until today – have in different ways used dairy cattle and milk to achieve a
wide range of political goals. In Mexico, dairy production was initiated by the process of
colonization in the sixteenth century and led to the emergence of "Mexican" food and to the
incorporation of dairy products in the daily life of Mexicans. From the 19 th century onwards,
the dairy sector has grown as a response to the urbanization of Mexican society, but also
because of the need to achieve and uphold food security. A concrete example of this is the
LICONSA program that currently provides six million income poor consumers with
subsidized milk and other important basic food items. At the same time, the state buys milk
from an important number of milk farms of all sizes at fair prices. For small or medium-sized
farms that because of scales or location are not able to deliver their milk to the private
industry, selling to the state is their only possibility of survival. Thus, this program has two
types of beneficiaries: income poor consumers and dairy farms. One of the conclusions
offered by this chapter is that the state not only regulates the dairy market, it enlarges the
market and sustains the possibility of farms to deliver milk to state programs: it also decides
on matters concerning production and involved technologies, and on prices and allocation of
resources.
The chapter also highlights the impact of the geographical location of Mexico on the dairy
sector. The proximity to the United States constitutes an important constraint, especially since
Mexico joined the NAFTA. In this respect the impact of state actions on farms and industries
is double, because the latter are exposed to distorted market conditions because of the actions
of its closest neighbour. Today Mexico is amongst the top 15 dairy producing countries, but it
is at the same time the fifth most important dairy importer.
Chapter four, written by Johan Eellend, highlights the process leading to the emergence of
dairy cooperatives in Estonia, including the ideas behind the process during the late 19th
century and early 20th century. Many countries underwent similar processes during the same
period, although with different features. A specific characteristic in the case of Estonia is a
land reform that enabled the access to land and led to the creation of 75,000 farms. The
farmers became organized through cooperatives that not only focused on cutting transaction
costs by joint operations, they were also vehicles for modernization built on common values
of public conduct and accountability. The main economic activity of these cooperatives
circled around butter, a product which accounted for a quarter of all agricultural exports. The
cooperatives contribute with insights on how to organize the local community, public
meetings, the local economy, etc., which, in comparison to other countries, is a contribution
that goes far beyond the traditional actions of cooperatives. Or, as expressed by the author:
“cooperatives intended to organize society according to the model of the local cooperative
based community, with networks stretching through different sectors of society”.
Membership in the cooperatives was restricted to landed people, but also included people with
other assets, such as capital. Thus the cooperative movement contributed to the stratification
process in Estonia between landed and landless people. In all respects, this case represents an
example of early articulation of the dairy sector in a process of formation of an independent
Estonian state. The case study highlights compromises in which democratic values and a
desired order based on education and economic efficiency became formalized into a state
policy.

Part III. Politics, Corporatism, Competition, Environment and Modernity

The first chapter in this section was written by Bengt Åke Berg and highlights the emergence
of the margarine market in Sweden before World War II. Margarine rose as a substitute for
butter in countries where butter consumption was established. Berg focuses on two main

12
periods, namely the late 1880s and the early 1930s, because during these periods the
substitute character of margarine became a permanent alternative to income poor consumers
and a threat to butter – and thereby also to agricultural interests - leading to an economic
warfare that called for political interference. The butter proponents argued that margarine
should be banned because it could be insanitary and it could also risk the reputation of
Swedish butter on the British market. The support for prohibiting margarine was promoted by
the right wing conservative and accepted by socialists. The result was the articulation of
interventionist policies that paved the way for cartelization within the trade. Regulation in this
sector went further than in any other industry, and was justified by agricultural policy at the
expense of consumer interests. The margarine industry was blocked in its expansion by
political interventions, but the owners had no cause to complain since they were left alone
with their handsome profits. The proceeds from margarine taxation and monopoly prices were
used to finance butter subsidies, the capital formation of the consumer cooperatives and
extraordinary dividends to the shareholders of the private firms. Margarine was also utilized
by the social democrats to make political compromises in order to secure long-lasting political
power. The scapegoat margarine rewarded all parties except one, the consumers.
In the following chapter, Fredrik L. Eriksson explains the origins of corporatism in
Sweden, incorporating ideological elements to differentiate and explain the essence of
corporatism. It explains how an agrarian crisis led to the reform of agro-food systems during
the early 1930s when the so-called “Cow Deal”, a new regulation restructuring of rural life,
was adopted. Eriksson challenges previous assumptions, offering an in-depth explanation of
the adoption of agricultural and food regulation and the development of corporatism in the
context of major socio-political events, such as the emergence of fascism. The government
appointed the Swedish Union of Agriculture, SL, to be the national agrarian cooperative
association and awarded them substantial political power because SL promoted interests that
the government branded as “legitimate” and because it was composed of Swedish elites.
Consequently, SL became interlocked and institutionalized with the state and/or semi-state
agencies mainly through individuals that were active in multiple fields. Agrarian associations
were brought in to actively organize agriculture through a commission system that was
adopted in the 17th century, but which experienced its main expansion during the 20th century.
Farmers received state support which eased their financial burden, but this also forced them to
become members of the emergent cooperatives. This also meant that private interests were
given a task and gave SL power within the political system. The regulations became even
more important during and after World War II, as a means to support the Swedish population.
While Eriksson discusses the role of the state in the emergence of corporatism, Håkan
Jönsson, in the following chapter, highlights how milk became a symbol of health and an
important part of state policies concerning childcare. The health and curative attributes of
milk derived from folk culture, but contrary to other popular beliefs, these were endorsed by
modern science. Especially during the 1920s and after, the consumption of whole milk was
promoted by farmers for economic reasons and by the state for food security reasons. The
wholesome label started to decline during the 1970s when an international debate on the
health risks related to fat, and especially of milk fat, became increasingly widespread. This led
to a decline in the consumption of whole milk and the rise of fat free or low fat milk.
Although Jönsson’s article puts emphasis on Sweden, he locates his empirical findings within
a broader international context. The chapter examines how society has perceived and used
milk in a journey from traditional into a modern industrialized society and onwards into
postmodernity. The chapter finishes with a reflection of current challenges, as the tide is
changing and milk is once again seen as a symbol of health. In contrast to past times, current
challenges are not related to health, but to the negative impact of animal production on
climate change.

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Looking at more contemporary concerns, Oskar Broberg highlights how the dairy industry
was challenged by the environmental movement in the late 1980s and how the industry
reacted to that challenge. Initially the industry regarded environmental concerns as a threat to
the industry. Broberg focuses on how the largest Swedish dairy, Arla, dealt with three specific
issues: a competitors’ launch of eco-labelled milk, the debate on recycling and the possible
use of sludge as plant nutrient. Arla took distinctly different stances in these issues, but by the
1990s they had all been incorporated within a newly adopted pro-market approach. Especially
important was the eco-labelled milk, which was used in Arla’s strategic branding. The
underlying question of this chapter is: How do firms perform the balancing act of running a
competitive business and acting responsibly at the same time?

Part IV. From Ancient Cultures to Modern Politics

In the fourth section, José Eloy Gomez de Pellón offers an important insight into the history
and development of transhumance systems in Cantabria (Spain). It highlights their change
over time, their practices and products, partially offering an explanation as to why some of
them disappeared, absorbed by a modern industrial development, and why some survived.
The perspective is both anthropological and historical and aims to mediate important
knowledge about a part of the Cantabrian traditional society that is a cultural heritage and
important to preserve. The systems described are the nomadism pasiego system and the
seasonal transhumance system. As in other known mountain systems, the abundance of
grazing during the summer was, and in some cases still is, used to feed the herds. Up in the
mountains, the herders or the migrating family elaborate the milk into cheeses that are stored
in caves until it is time to return to the village. The summer grazing is important, because it
enables the farmer to have sufficient feed for the herd all year around. Due to the competition
of modern dairying and a changing society, these systems have gradually been replaced.
However, during the last decades, its remnants have become important for rural development
and to support the livelihoods of mountain farmers.
A similar story is highlighted by Karl Gratzer in the following chapter. When Austria
became a member of the European Union in 1995, measures were adopted to prevent the
depopulation of rural areas by strengthening rural firms. One way of accomplishing this was
by applying for Protected Denomination of Origin (PDO) and Protected Geographical
Indication (PGI) for several food artisan products; the idea was to prevent them from
disappearing by adding brand value. In the mountain area of Gailtal, one of the selected
products was the Gailtaler Almkäse. This cheese has been produced in the same manner for
centuries, but when it became certified under the PDO scheme, a process of valorisation that
based itself on the tourism started around the product.This case relates to a currently ongoing
discussion about rural development and rural entrepreneurship in Europe. In many senses it is
relevant for understanding why some countries in Europe manage to adopt policy measures
developed under the CAP, such as the PDO scheme, and why some countries fail to do so.
The final chapter of the book, written by Ulf Jonsson, begins with the study of French
cheeses. He shows that the AOC label (appellation d'origine controlee) has been a
particularly powerful instrument for rural development in general, but especially in
mountainous regions of Jura and Savoie in eastern France. He argues that even though the
current outline of the AOC system can be interpreted as part of a current widespread mistrust
and discontent with mass-produced food, it also constitutes an important asset – not only in
economic terms in the strict sense, but also symbolically, as a tool to preserve food culture.
The French AOC-system has served as a point of reference for the adoption of modern forms
of Geographical Indications, such as the PDO (Protected Denomination of Origin) and PGI
(Protected geographical indication) schemes under the EU quality legislation. An additional

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merit of the AOC system is that it also stands for a system of “soft protectionism” for
localized production.
To sum up, this book highlights some of the main topics in the current academic discussion
about the dairy industry. All authors have previously participated in this discussion from
different schools of thought. By bringing together experiences from different countries and
continents that are scattered across time and space, the aim is to contribute to the foundation
for a synthesis on the history of the dairy sector.

Stockholm 2013

Paulina Rytkönen
Luis Arturo Garcia Hernandez
Ulf Jonsson

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Photo: Paulina Rytkönen, Dairy Factory in Uruguay 2008

Part I. From Local Champions to Global Players

17
18
 1. From Local Champions to Global Players
the structural transformation of the dairy sector in a
globalization perspective

Paulina Rytkönen

Introduction
In the beginning of the 20th century, the dairy sector underwent several structural breaks
characterized by rapid technological change as well as intensive and shifting forms of political
intervention. Early urbanization, the two world wars and the great depression were some of
the events that created a need to address food safety and security within state policies, and
proceeded to fuel technical and industrial development of food and agriculture. In many
countries, milk was used as a symbol for the emergence of modern nations. Thus, the idea of
regulating dairy became deeply embedded in the policies of industrialized countries, which
made the market into one of the most distorted in the history of food and agriculture. Until
recently, the market for most dairy products was constrained to the boundaries of the national
state, but globalization has altered the trade on a profound level. A new production and
distribution structure emerged, the form of ownership changed, the demands for hygiene and
protein level in raw milk increased and a new global division of labour was articulated.
Another important current feature is an unprecedented level of competition over resources, the
hunt for quarterly profits and the emergence of a new global consumption landscape. Even
though the dairy sector has transformed into a global business, most previous research focuses
on the national and the regional level. This article offers an overview of some of the main
events of the industry over little more than a century. Emphasis is put on the last decades. The
main question is, how has globalization changed the dairy sector?

Theoretical considerations and organizing concepts

Globalization has been discussed by a vast number of scholars from many different angles
and from a variety of disciplines. Globalization is normally defined as the process of
transformation by which countries are interlinked by mutual and interdependent relations. The
concept has mainly been applied to study the development of culture, normally referred to in
relation to the consumption and diffusion of films, books and other expressions of culture all
over the world. It has also been applied to study global politics and the shift of power from the
national state to intra-national organizations, and several other relevant topics. One important
discussion is concerned with the process of economic integration caused by globalization.
Some important topics in this discussion are the development of world trade, the
internationalization of companies, the deregulation and integration of financial markets, the
emergence of a new spatial dimensions and economic geography, competition and new
industrial structures (See for example Hirst and Thompson, 2006, Cain and Hopkins, 1993
and Dunning and Lundan, 2008).
The study of food and agriculture under globalization has mainly been highlighted by the
new political economy of agriculture. The emphasis of this school of thought stresses the
internationalization/globalization of agriculture and food production since 1870, and has

19
contributed to valuable insights on the development of a global supply line of food
(McMichael 1996, Goodman and Watts 1997 and Bonnano 1994). An important source of
influence for many scholars engaged in this line of research is ideas concerning core-
periphery dynamics developed within dependency theories and world systems theories. A key
assumption is that production and consumption of food takes place under a specific economic
and geopolitical organisation of international agricultural and food relations, i. e. a food
regime. The basic components of a food regime are always the same irrespective of the
historical period of product that is being studied. A food regime comprises an
institutional/structural power base; it has a mode of regulation and economic agents with
varying degree of economic space. It results in production of certain food, a pattern of
distribution and environmental effects. It also creates asymmetries and different outcomes for
economic agents in the core and periphery.
Different food regimes have been framed under varying political, economic and natural
conditions. Most scholars argue that the world has experienced three food regimes. The first,
British-centered food regime (1870-1914) involved, during the late 19th century, a global
exchange of tropical for manufactured goods. By the turn of the century, the most important
feature was a vast flow of temperate agro-food products from settler economies, United
States, Canada, Australia and Argentina to the European and in particular the British market
(McMichael 2006, pp 265-299). At its core, the regime manifested itself as a transition from
governing the production and international trade of agricultural products stemming from
British geopolitical interests, to losing the battle against the rising importance of settler
economies in the international food trade. In the periphery, this regime manifested itself as
successive waves of commodity export booms and contractions when supply outpaced the
demand in the importing countries. The first international food regime fell apart after the First
World War, due to the loss of British power and the impact great depression. International
trade in agro-food goods decreased and was channelled through bilateral agreements.
A new food regime rose again after World War II. The new hegemonic power, the United
States, was at the centre of this food regime2 as the developing world became a battlefield
between east and west. Agrarian development and worldwide food security were seen as
essential tools to stop the influence of the Soviet Union in Africa, Latin America and Asia.
The main features of this food regime were the emergence of large surpluses of grain obtained
through farm subsidies and maintained out of political motivations; the emergence of
American food aid as a central element in foreign policy and a way to get rid of the large
surpluses of grain; a historical growth of the share of United States in global food exports; a
downward pressure on the world market price on grain and other staples; the opening of new
markets in developing countries through subsidized export prices and the adoption of “cheap
food” policies, pursued by several governments in developing countries that increased the
dependency on imported food; and, finally, the facilitation of capital penetration to countries
earlier dominated by agrarian production (Friedmann, 1982). This food regime fell as other,
industrialized countries increased their share of exports of grain and other food staples to
developing countries. One reason was the need to get rid of the surplus production caused by
agricultural subsidies and trade barriers that emerged as a result of the national self-
sufficiency goal adopted in many countries after World War II. Another reason was the
development of farm lobbying that pushed towards a higher degree of agricultural protection.
There is also a current food regime that differs from the previous two as the power, earlier
exerted by single countries, now is in the hands of transnational companies. This global food
regime (also called corporate food regime) has been shaped by several underlying causes,
such as the liberalization of food and agricultural markets and the decrease of state influence
over the production and distribution of food; the rise of large transnational companies that
2
The second food regime, also called the US-centered food regime went on between 1945 and 1970.

20
appear as suppliers of inputs to agriculture and the food industry, as well as processors and
distributors of food; an unprecedented level of competition at all levels and scales of food
production and distribution; and an increasing technological gap between geographical areas
(rather than countries) and agricultural sub-sectors that are part of a global agro-food system
and an increased marginalization among those that are not. The main agents of this food
regime seek to actively expand market shares in emerging economies, where food
consumption increases at a faster rate, and to actively cut down costs through relocation of
production – especially of labour intensive production – to cheaper areas, through
rationalization and through concentration (Rytkönen 2009). DFI and investments have thus
increased in countries where a more efficient use of advanced technology is possible, and
where factor prices and endowments make investments in production particularly favourable.
Moreover, the growth in use of cross-border alliances and large companies are pushing hard
for increasing sales in developing countries. The priorities of the new agro-food leaders led to
an important shift in the geopolitics of food. Firstly, the technological advantage of high
income countries has gradually decreased vis-a-vis less developed economies, and secondly,
labour intensive production, especially involving unskilled labour, has been relocated from
industrialized countries to less developed ones (Chun Zhu, 2006). For the dairy sector in
particular, this means that while production and distribution of food continues in
industrialized countries under new market conditions, the largest innovations and new
developments tend to include new countries or geographical areas, creating completely new
agro-food relations, and new patterns of production and distribution.
Another theoretical frame used to study the globalization of the agro-food sector is the
global value chains approach (Kaplinsky and Morris 2000). In the case of agro-food
products, the value chain grasps all activities, inputs and stakeholders involved in the process
of a physical transformation of the product from farm inputs to the dinner plate, including
post-consumption activities and impacts. This approach is used to understand the
complexities of an increasingly global food provision system. Some of the topics addressed
through value chain analysis are studies of how inequalities emerge in global production
systems and how they can be counteracted. It is also used practically to find ways to upgrade
globally dispersed production activities in order to improve stakeholders’ standard of living.
The value chain approach can help us understand governance within a global production
structure. Value chain analysis constitutes a useful analytical framework to investigate the
nature of cross border linkages, relations, integration or dislocation between farmers, agro-
industrial firm in the global production and distribution systems of food supply (Kaplinsky
and Morris 2000).
The agro-food globalization debate is a valuable tool to study the distribution of power
within the agro-food system and the impact and outcomes of the implementation of different
modes of regulation on single agents, from farmers to consumers, to countries and regions.
This approach assumes that structural changes are mainly the result of market events and of
shifts in power structures. An important objection to this assumption is that markets are
devoted to the coordination of transactions, while the learning processes that are needed to
actually create advanced technical and scientific development, such as the one experienced by
the dairy sector (from farm to industry), is dependent on interactive learning processes and an
exchange of knowledge that will hardly be the result of market transactions. Therefore, in
order to support the study of the agro-food sector over time in a broader perspective, and to
obtain technological shifts and other types of qualitative changes, it needs to be
complemented with tools that facilitates the process.
An approach that can be helpful in this direction is the study of innovations systems. This
approach is not normally used in order to study agriculture and food production; in fact, most
theoretical strands in economic theory are developed and reserved for the study of industries,

21
business and phenomena in industrial branches, and neglect sectors related to agriculture,
even though these approaches could benefit study of the agricultural sector and vice-versa.
(Jordbruksverket 2006)
According to Charles Edquist, a system of innovations is the sum of everything that is
important (economically, socially, politically, organisationally, etc.) for the diffusion and use
of innovations. (Carlsson,et.al. 2000). An innovation can, in brief, be described as a mode of
doing things differently in economic life. Joseph Schumpeter, the most influential academic
scholar in this field, defined innovations as new products, new production methods, new
markets, new sources of raw materials and new organizations or forms of organization
(Schumpeter 1934). In real life, innovations are most often new combinations of existing
resources or the implementation of existing tools or practices in new economic branches.
Innovations of varying kinds play a key role in the articulation and development of innovation
systems and are also the result of the successful development of the named systems. An
innovation system is composed by two parts: the first is its components in terms of physical
resources, organizations and people; the second is the relationship between these components.
(Carlsson et al 2000).3 An important assumption of the IS approach is that the development of
successful relations between the components in innovation systems is dependent on the nature
of the existing institutional setting.
Two of the central features of agro-food systems and of innovation systems are the mode of
regulation or institutional setting and technological development, clearly defined as the effect
of the relationship between the components by the IS approach, and vaguely reduced to
”effects” or ”constraints” in the agro-food system approach. It seems therefore that a fruitful
contribution to the internal scientific development of the agro-food systems approach is to
focus on at least three features, namely institutions – here defined as the set of rules that have
caused the emergence and development of the sector; technical development, here following
the definition presented by Schumpeter (above) and the industrial structure developed over
time. The latter was partly caused by the previous two.
The study has been organized in a chronological order divided by, (1) the period in which
the dairy sector was characterized by the dominance of dairy cooperatives under a nation-
based dairy system, which in time occurred from the sector’s early industrialization in the
beginning of the 20th Century until 19854 and (2) the period thereafter, as the sector has
become increasingly globalized under companies’ global systems of sourcing and food
provision. Under each period three aspects are highlighted, namely main technological
development (innovations), main institutional aspects and industrial structure. Since the
ambition is to get a global overview, it is not possible to highlight every feature of the sector
in all countries; therefore, a selection was made to offer a representative overview of events
during each period

Selection of examples and sources

There are no previous comprehensive studies about the dairy sector; consequently, the
selection of examples and cases must be seen as the first attempt to actually provide insights
on available studies and to cover the development of the sector in a global context. As such,
they are meant to illustrate different processes and events. Most available secondary sources
are from European countries, but some efforts have been made to also find examples outside

3
An early contribution to this discussion was made by Erik Dahmén. He described innovation systems as “development
blocks”, e.g. technologies and companies that complement each other, creating synergies and thereby growth (Erik Dahmén,
1950)
4
The year was selected because it coincides with the adoption of quotas in Europe (in 1984) that have become a major
source of influence from 1985 and onwards and because it coincides at least partially with the processes of liberalization in
Oceania and Latin America.

22
of Europe. One important reason for this is that one of the purposes of this article is to try to
show that the main features of the sector at farm and industry level are very similar in most
countries, although in some cases there might be some delay between events in industrialized
countries and not yet industrialized ones.

The basics of dairy systems

The productive structure of the dairy sector comprehends at least three levels/dimensions. At
the farm level, total output is dependent on a combination of biological and
infrastructural/technological aspects, for example on genetics, feed, water, milking
techniques, refrigeration and general infrastructure. The industry dimension grasps processing
and distribution from farm gate to factory gate. Total output is dependent both on processing
technologies that determine the composition and quality of farm output, as well as by general
infrastructure. The distribution dimension might be composed by wholesalers, supermarkets,
but also by state agencies, stock brokers and other agents. Another feature is that innovation
systems, defined as a set of technologies to produce and refine milk and dairy products from
farm to the dinner table live side by side, between and sometimes within countries.

The dairy sector from the early days until 1985

Before the 20th century, the lions’ share of milk was produced during the summer and became
transformed into butter or cheese in order to be conserved (Erland 1981, pp11). The earliest
records of milking animals for human consumption were found as a painting on the walls of a
Libyan cave. It was dated to 5000 years BC (Davidsson 2006, pp 504). Cheese and butter
were also the earliest dairy products used in international trade. Holland, one of the pioneers
in international dairy trade exported cheese and butter to its neighbouring countries as early as
1750 (deVylder 200, pp19). Butter became the first large-scale exportable dairy commodity in
history as production became more efficient after the invention of the separator. During the
late 19th century, urbanization was an important driving force for technological change (Du
Puis 2002, chapter 3). The increasing participation of women in the industrial work force led
to an early abandonment of breast-feeding, which made children an important consumer
group in cities (Nepham 1993, pp 225-249).
During the outset of the period the sector went through different phases, such as the
mechanization and development of different types of farm technologies and the modernization
of the farm sector; the organization of farmers and the emergence of an industry; the
development of innovations crucial to the possibility of bringing this perishable product to the
market; the consolidation of the industry resulting from a combination of stabilization of
markets; articulation of national and later regional dairy policies as well as the political
organization and influence of farms. A common feature of dairy policies is that liquid milk
was promoted by the state in many countries under a discourse of modernization; even the
pictures used to promote milk consumption are very much alike between countries (Du Puis
2002, Schmidt 2005, Jönsson 2005). This topic has previously been highlighted by several
studies and will, for that reason, not be highlighted here.

Technological development
The earliest industrial techniques and products were (sweet) condensed canned milk and
evaporated canned milk. The first patent for condensed milk was issued in Britain in 1835, but
condensed milk gained public acceptance after Gail Borden patented sweet condensed milk in
the United States. Borden’s milk became popular amongst soldiers during the American Civil
War. From there, it spread to the American public, and also to Europe through Charles A
Page, who started the Anglo-Swiss Milk Company in Zurich in 1866 (de Vylder 2004, pp21).

23
Fluid milk emerged as one of the main dairy products of early 20th century industrialization.
Fluid milk was praised by many because of its high nutritional value and was sometimes
awarded even curative effects (Du Puis 2002, pp 67-82), but it was also the cause of some of
the most important illnesses behind child mortality during the 19th century. The inferior
hygienic conditions in urban dairies and health problems among the cattle led to the spread of
several illnesses to the population. This problem was especially acute in the United States,
were the urban population consumed three times more milk than in European cities (Schmidt
2005, pp 40).
The need for increased food safety led to the adoption of sanitary practices in barns and
dairies. The spread of pasteurization and the adoption of the glass bottle – the first industrial
package for milk – were also important for solving early sanitary and infrastructural
problems. Different types of heat treatment were used to sterilize milk during the second half
of the 19th century, but it was Louis Pasteur who in 1870 discovered that by heating the milk
to 75 degrees all harmful pathogenic microorganisms died (Leander 1995). In spite of the
sanitary benefits, consumers resisted pasteurized milk because the flavour was different (de
Vylder 2004, pp 21). In Sweden, for example, pasteurization became widely accepted during
the 1930s after the flat heat exchanger5 was invented. This improvement on the original
machine not only resulted in a better flavour, it had also a larger processing capacity (Blom
2010). In Britain, pasteurization was enforced by the authorities due to acute sanitary
problems during the First World War (de Vylder 2004, pp 23). Pasteurization is even today
not a universally adopted practice; in many developing countries raw milk is still sold by
milkmen, door to door.6
Packaging was also important to solve the distribution and safety of milk. Initially, milk
was sold in bulk, which led to a great exposure to bacteria. The shift from bulk to the first
standardized package, the glass bottle, occurred parallel to pasteurization. The replacement of
the bottle started in 1952 when the first tetra package was introduced. The patent was
registered in 52 countries (Leander, 1995, p 69) and the diffusion of the tetra created a
revolution in the trade as the infrastructure for recycling, cleaning and handling bottles was
eliminated.
Another important innovation, especially for the development of the butter market, was the
invention of the centrifugal separator. Even though many inventors worked with different
solutions to speeding up the separation of cream from skim milk, it was Gustaf de Laval who
– by combining the results of other inventors - first manufactured a separator based on
centrifugal force. Before the centrifugal separator, the process could take between 12 to 24
hours and the milk could go sour. The first Alfa-Laval separator reached the market in 1890
and it was further developed to increase the processing capacity. In 1926, the separator had
reached a capacity of 5000 liters per hour (Erland 1981, pp 65). The Alfa-Laval separator was
followed by several different versions from companies based in other countries.
Innovations at farm level were also important. Raw milk is by nature a seasonal product; cows
give birth to their calves in the spring and the length of the lactation period is dependent on
the availability of food, which, historically, meant that the lactation ended during the autumn.
Achieving a more even all-around year production of milk has been a gradual process
achieved by improvements on animal feed (Du Puis 2002, pp 134-139) and a change of the
genetics of dairy cattle through breeding and artificial insemination. One of the earliest large
scale artificial insemination projects was conducted by The Royal Veterinary College in
5
The continuous Pasteur based on heat exchange
6
This milk is not controlled or regulated by authorities, it is not used as a base for taxation and not processed in any way. It is
cheaper than industrially processed and serves as an important source of protein for income poor families and an important
income opportunity for poor farmers that are unable to meet industrial requirements for milk. A good example is Uruguay, a
country that has a vast industrial production for exports and domestic consumption, but where important income poor
segments of the population are dependent on the purchase of informal milk.

24
Copenhagen, in 1936 when 1070 cows were enrolled in a performance study of artificial
insemination (Foote 2002, pp 1-10).
Efficiency at farm level was also improved upon through the development of automatic
milking. The automatic milking technique was developed at the same time as the separator
and pasteurization. Gustaf de Laval’s first automatic milking machine patent was for example
registered in 1894. Different versions using the same principles were developed in different
countries and improved over the course of the century. In the United States the milking
carousel was already being used during the late 1930s. In Sweden and Norway the fishbone
system became more dominant and many different versions of fixed or portable milking
machines were developed and improved upon over the century (Erland, 1981, pp 37).
The problem of seasonal production was also addressed through the development of dried
milk. Drying milk is an ancient technique; the first descriptions of dried milk are found were
written by Marco Polo when he wrote about Mongolians. Some of the first patents were
registered by William Newton (patent No 6787 1837), who developed a process to evaporate
and then pulverize milk that was mixed with sugar in 1837; T. S. Grimwade registered a
method to concentrate milk that was bottled and corked (patent No 1 1 703 in 1847, he also
registered another patent in 1855 [patent No. 2430], that combined the heating of milk with
the adding of sugar and resulted in dry solids that became powdered by rollers (Blyth 1896,
pp 318). Consumers were not completely convinced by the taste of dried milk, and even
though quality improved after World War II, it took many years after the end of the war
before consumers relied on drinking dried milk again However, milk powder started to be
used as an ingredient in industrial pastries, ice-creams and other ready-to-eat food (Tennanhill
1989). In 1953, non-fat, instant milk, with a taste very similar to fresh milk, was developed in
California; in the 1960s, this was an important technology that served the needs of emergent
health food movements in developed economies (de Vylder 2004, pp 30).
One of the most important products to use large amounts of milk as an input was milk
chocolate. Chocolate was already produced during the first half of the 19th century and milk-
based soft candy caramels were invented during the late 19th century. Chocolate was
important as a source of calories for soldiers during the world wars and both the production
and the consumption of milk increased during the outset of the 20th century (de Vylder 2004,
pp 28).

Institutional aspects - the emergence of dairy regulation

It is impossible to point out a universal date for the emergence of the state regulation of the
dairy sector. However, a few events stand out as important reasons behind the rise of food
regulation in industrial countries in general. The first of these was the First World War in
Europe. In England, food supply became the subject of a complete control that went on
between 1917 and 1920. A paradox of food rationing was that in some countries food became
more evenly distributed between rich and poor, which improved the food intake of poorer
segments of the population. In England, for example, basic foodstuffs were prioritized by
food regulation and milk and dairy products became an important part of the British rationing.
But the hardship of war created severe shortages of milk supplies as feed for dairy cattle
became scarce (de Vylder 2004). The problems in England led to regulations in other parts of
the Commonwealth. Between 1917 and 1926, for example, committees were set up to
organize and secure the sales of butter and cheese to the UK from Australia and New Zealand.
Regulations continued as a marketing scheme for butter exports was implemented between
1926 and 1933 (Dairy Australia 2010). Milk and dairy products became rationed or regulated
in many other countries as well; in Sweden, for example, butter became rationed and milk was
regulated during the war. In the United States, milk prices became regulated during the 1920s
and 1930s (USDA 2005, pp 6).

25
The second important event was the Great Depression. Falling agricultural prices that affected
agricultural output negatively, rampant unemployment and a dramatic rise of food insecurity
led to the adoption of food and agricultural regulation in many industrialized countries.
Regulation encompassed a mix of support for farmers and market regulations. Dairy
regulation became a permanent feature of agricultural as well as food policy in several
countries. In Australia, for example, dairy regulation became permanent in 1934 and
encompassed equalisation of the export prices of butter and cheese, as well as industry
subsidies during critical periods such as World War II (Dairy Australia 2010). Similar
policies were adopted in many other countries. An important feature of dairy regulation is that
it combined the interests of consumers and the industry, by providing fairly low prices for
consumers, with reasonable compensation for farmers. Dairy regulation emerged as the result
of the nations’ need to achieve food security and the political influence of farmers on the
articulation of agricultural policies through a strong cooperative movement (Rytkönen 2004,
USDA 2005, Tullberg 1977 and many others).
Dairy regulation reached new horizons when the Common Agricultural Policy started to
take form in 1957 through the treaty of Rome. The general idea was and still is to stabilize
markets, compensate farmers and consumers and contribute to guarantee security of supplies.
The first dairy regulation within the EEC, Number 13/64 divided the dairy market into two
areas: the fresh milk products market and the industrial milk market. Another relevant market
regulated by the EEC was the market for fats. In a fully developed form, the CAP led to
import restrictions, export refunds, and many other measures to regulate the sector (IDF 1996,
pp 1-6). The EEC expanded several times; gradually, the initial 6 countries that implemented
the CAP dairy regulation model became 27 countries, and three more stand in line as
candidates to the EU. Many countries outside the EEC, such as Canada and the United States,
developed similar policies. Two important dairy countries, Australia and New Zealand
regulated their markets during large parts of the 20th century, but since the 1980s their markets
have become liberalized and follow a different pattern than that of Europe and North America
(Gutman, 2003 chapter 3-4). European countries that stood outside of the EEC at the time,
such as Sweden, Norway and Finland – implemented similar regulations to those of most
other countries. Price regulations were also implemented in some developing countries as a
part of the import-substituting industrialization strategies.
Dairy regulation also involves food safety and food security. The initial national
regulations eventually led to the adoption of an international standard for dairy products under
the Codex Alimentarius, established in 1963.7 Food security was also addressed through
school milk or public milk programs. The earliest experiences with milk programs were
implemented in France, Germany, England, Scotland and Switzerland by private initiative as
early as in the 19th century. But as they proved a valuable tool for achieving food security,
states took over these activities and milk programs became a permanent part of dairy policy
(Stevens 1913, pp 45). The programs spread globally and were gradually adopted also in
developing countries. Two early examples of dairy programs were the ones adopted in Chile
and Uruguay that date back to the 1940s. Today, most countries have school milk programs.

Industrial organization and structure

The industry emerged gradually as a well-organised system of production and, consequently,
distribution grew. Dairy products are perishable goods. Exposure to heat and bacteria or a
delay in the delivery and consumption would lead to the destruction of the products. The
emergence of dairy companies in combination with the use of faster means of transportation,
such as the railway and the truck, and the development of cooling techniques, were all

7
http://www4.dr-rath-foundation.org/features/codex_wto.html

26
components in the early development of the industry. The history of the dairy industry can
roughly be divided into three distinctive periods: a preindustrial period, a period characterized
by the emergence of national industries and a period in which the industry became global.
Even though these periods are characterized by highly distinctive features, the periods of
transition between them were very prolonged. Small-scale butter-producing creameries
(Sommestad, 1994, pp 57-75), urban distillery dairies (Schmidt 2005, pp 31) and many other
forms of dairy elaboration or distribution firms existed for a few or many decades between
1850 and 1940. Some of the largest contemporary dairy companies were founded during this
period. Nestlé, for example, was founded in 18608, Helvetia Milk Company was founded in
1885, Carnation was founded in the US in 1889 and the French Lactalis (de Vylder 2004, pp
21) was founded in 1933.9 Until recently, the international expansion of private dairy
companies took place through the establishment of subsidiaries that conducted operations that
were restrained to the host country.
In spite of the large number of private companies involved in dairy processing, the most
important form of organization in the business was the emergence of dairy cooperatives. In
fact, the sensitivity of milk and the small yields obtained by farms in pre-industrial times
encouraged the development of cooperatives. The strive for standardized and safe food
required the emergence of a well-organized industry, and for most farms the only option was
to join forces and integrate forward in order to ensure sustainable distribution channels and
fair prices for their products (Cropp, 2001, USDA, 2005). The dairy cooperative movement
started to rise during the early 19th century as a response to the demands from emergent urban
markets. While many cooperatives in the early industrial nations were founded during the
19th century, in many developing countries the cooperative movement first appeared during
the 20th century. In total, there are two types of dairy cooperatives: the first has the purpose of
arranging the sales of the members’ milk and the second has the purpose of manufacturing
and marketing the products. Most cooperatives were initially quite small. Today the size of
the cooperative depends on the line of products that is marketed. Commodities require a larger
scale and therefore larger size, while niche products require quality rather than quantity
(USDA 1995, Sommestad 1994).
Summing up, the early dairy industry resulted in two patterns of industrial organization,
namely technology-intensive, rapidly growing private companies that established subsidiaries
that targeted the hosting countries markets, and farmer cooperatives. The latter became the
dominant form of organization. Dairy cooperatives exerted a marked influence over the
articulation and implementation of market regulation policies at the national level.

The global shift

The global production and distribution of milk has profoundly changed since the 1980s. The
changes encompass an industrial-structural dimension, a qualitative shift in technologies, a
shift at the institutional level, the emergence of new global consumption patterns and a
geographical shift in the organization of production.
In most countries and at all levels there is a far-reaching process of concentration and
restructuring. In industrialized countries, this process was at a fairly advanced stage before the
1980s, but in developing countries, concentration and rationalization has become more
relevant during the last decades. The industry has become increasingly transnationalized
under the implementation of global market governance strategies. The power in the sector has
shifted from the farms to the industry as the bargaining power of the cooperative sector has
decreased, and from the industry to the retail sector, as a result of the transnationalization of

8
www.nestle.com 2010-03-23
9
www.lactalis.fr 2010-03-23

27
retail. Today some of the world’s largest companies are supermarkets. An additional group
with increased power over the sector are stock brokers, day traders and speculators with
global coverage.
Globalization pulls the sector into different directions. One is the increasing production
and sales of surpluses by countries like New Zealand, Argentina and Australia to countries
that have a dairy deficit. There is also an increasing demand for dairy products as ingredients
for the food industry (for soups, cakes and many other products), pizza cheese and fast food.
Some of the importing countries like Mexico have always had a deficit and have been major
importers, but there are a number of new, upcoming markets in Asia, the Middle East and
Africa, one of which is Algeria. Another direction is the globalization of brands and
development of brand portfolios (Andreasson, Interviewed 2008).
FAO statistics disclose that most of the dairy production today occurs in a comparatively
small number of countries. The top 20 countries listed in table one (above) produced in 2011
57,2 percent of the total world output (FAO 2012)10. But only seven of the top 20 countries
produce a surplus (Argentina, Australia, New Zealand, France, Germany, Netherlands, Poland
and Ukraine). There are some additional 18 countries that produce surpluses, a few countries
like the United States, Brazil, India and South Africa have a balanced production, while most
other countries produce a deficit.
All these changes combined also show a vast increase in total output and productivity. At
farm level, productivity has steadily increased between 1962 and 2007. In some countries,
like New Zealand, Australia and Argentina, the farm system is based on grazing, and
productivity has traditionally been calculated in relation to land, but the production per animal
has increased as farming has become more intensive.

Chart 1. World output of milk 1961-2008

World milk production tonnes

800000000

700000000
600000000
Tonnes

500000000
400000000

300000000
200000000

100000000
0
1961
1965
1969
1973
1977
1981
1985
1989
1993
1997
2001
2005

Years
Source: FAOSTAT, world production statistics.11

As can be observed from the diagram above, total milk output increased between 1961 and
2008. The increases between 1961 and 1989 were explained by the technological

10
http://faostat.fao.org/site/339/default.aspx 2013-04-14
11
While many countries have fairly accurate statistics, the FAO statistical division has estimated some of the series for some
countries. However, the countries that are responsible for the lion’s share of the worlds milk output have reliable statistics,
therefore the FAO series have been valued as fairly accurate by the author.

28
development, institutional framework and industrial structure described in the previous
section. After a short period of stagnation during the early 1990s, total output has increased
again. Of all milk produced, most will never cross any border and the industry’s own experts
estimate that this will continue to be so. Still, international trade rose twice as fast as
production between 1995 and 2005. The key exporters are the EU (28%), New Zealand
(23%), Australia (12%), USA (9%), Argentina (5%), Uruguay (2%), and Ukraine (4%) (IDF
2007, pp 12-13). Current world market shares have changed over time; while Europe lost
considerable market shares, Oceania expanded. The fastest rising markets are countries in
Asia and the Middle East (COMTRADE 2010). Moreover, international consumption
patterns have been partially leveled. In Italy for example people drank more wine than milk
during the 1950s; today, they drink much less wine and a bit more milk. In northern European
countries, the development has been the opposite. Consumption of wine was marginal in the
1950s and consumption of milk was quite important. Today, people there drink more wine
and milk has slightly declined. Before, the state of the art technologies and most modern dairy
industries were the ones in Europe or North America. Today it is possible that the most
modern industry is found in China. The Chinese industry has been built up during the last
decade and has been fueled by the rise in demand for dairy products. Consumption takes place
mainly in southeastern China where there are no cows (due to geographical conditions) and
production takes place in inland China. Chinese people consumed very little dairy products
before, but as the country has become more open, people have adopted new habits. They, too,
want to drink café latte and eat pizza (Andreasson, interviewed 2008).
As sales became more global the industry was exposed to a new type of sensibility for
events that have little to do with dairying. One example was the boycott that Swedish-Danish
Arla Foods was exposed to in 2006 when Danish newspapers published cartoons of the
Muslim prophet Mohammed. At the time, both importers and grocery stores in the Middle
East started a boycott against Arla products. When the boycott ended, the total cost was
estimated at 400 million Danish crowns, or as the company stated, “This equates to a loss of
DKK 40,000 for each of Arla’s 10,000 Danish and Swedish co-operative members”.12
International price volatility has also become an important source of influence. This can be
illustrated by the historical rise and fall of the price of dairy products experienced between
2006 and 2008. Professor Mark Stephenson, one of the world’s leading analysts of dairy
markets with specialty on price forecasting, stated in a webinar held at the Chicago Board of
Trade Company (CME) that, while in 1987 prices could be predicted quite accurately by
studying the support systems, in 1997 it was necessary to widen the scope as domestic supply
and demand became more important for the market price. In 2007, he estimated that it was not
enough to just study the dairy market, because prices had become related to events in other
markets that were beyond or exogenous to the milk market. According to Stephenson, a major
reason behind this unprecedented high price level between 2006 and 2008 was caused by the
rise of crude oil prices (from 30 to 90 dollars per barrel), state-led promotion of a shift to
ethanol (in the USA and in Europe) that fueled the prices of corn and other crops suitable for
ethanol production (that are also used in fodder), the increasing prices of soy beans, the rise in
land prices as a result of the higher demand for green fuels, as well as rising prices for
fertilizers13, rising demand for dairy products in China and Middle Eastern oil producing
countries (as a result of higher oil prices), a period of draught in Oceania that led to a cut
down in exports from Australia and New Zealand to the Asian and Middle Eastern markets
and the abolishment of export subsidies in Europe that led to a cut in production. The higher
international demand absorbed the increased level of costs in many countries in 2007 when
farm gate prices started to rise (Stephenson, webinar 2007). At least for the first half of 2008,
12
http://www.arla.com/press/archive/boycott-cost-each-co-operative-member-dkk-40000/, 2010-04-12
13
In some countries, the fertilizer prices increased with more than 300% www.fedeleche.cl, 2010-03-08

29
prices continued to rise and there was an expectation that the bonanza would continue for a
long time. But during the second half of 2008, milk prices started to fall, while prices of
inputs remained high. The negative impact on the farm sector was reflected in the riots and
protests from all over the world that media reported on.
This episode revealed the new impact of international prices on national production
systems. Many developing countries, but also major players like Australia and New Zealand,
have liberalized their economies since the 1980s. In these liberalized economies the
international price makes an immediate impact,14 but this time the impact was dramatic also
in highly regulated dairy sectors (Malcouri, Rodriguez, Pizzorno, Klausen Lege, Buxedas,
Hernandez- Gegler, Gonzalez Parodi,
all interviewed 2008)
The first dairy commodity to be traded internationally by brokers was butter (as early as by
the end of the 19th century); today there are ten different dairy commodities that are traded
with in commodity markets using instruments like futures and options.15 The increased
importance of this trade all the way down to the farm is caused by the process of the
globalization of the dairy sector and the entire world economy.
Another source of global transformation pressure is the emergence of transnational
supermarket chains, which is something that during the last decades altered the power
relations and structure of food production in general, and dairy production in particular
(Hendrickson, Hefferman, Howard and Hefferman, 2001, pp 715-728). Companies like
Wal-Mart (the largest company in the world) and Carrefour have become dominant retailers
in many countries and dairy companies cannot afford not to sell through them. Therefore,
conditions in terms of delayed payments, shelf rent fees and entrance fees have become
widely accepted by the dairy companies. Another example of the influence of supermarkets is
the use of the supermarkets’ own milk brands. The use of the supermarket brand obscures the
origin of the milk as sales argument, in Mexico for example, the milk sold under the Wal-
Mart brand is produced in the United States, through an agreement between Wal-Mart and
Dairy Farmers of America, which limits the opportunity of Mexican dairies to sell through
Wal-Mart (Villacaña Vasques, interview 2007).

Technological development and innovations

Innovations during the last decades have become increasingly systemic and it is difficult to
separate them from one another. The following examples are representative for the
globalization of the sector and are either a result of globalization or help fuel the globalization
of the dairy sector.

14
Uruguay constitutes a good example of the impact of price volatility on developing, export-oriented countries.
When the world prices started to rise, production received an immediate push towards increased production; this
fueled large amounts of investments that targeted an increase of output, especially of commodities. All dairy
processors, including the leading state supported cooperative Conaprole were actively promoting the
formalization of informal milk production in order to capture more milk for exports. The rate of investments was
quite high also at industrial level and the long term analysis made by the directors of dairy companies like
Conaprole, Pili and Claldy and by the ministry of agriculture was that prices were not likely to fall. But prices
did start to fall and in the autumn of 2008 the situation had turned into a crisis for the entire nation An important
reason for the fast and dramatic impact on Uruguay is that a larger part of exports are done through commodity
brokers and prices on a short term basis, thus price volatility causes an immediate impact on the entire sector.
15
http://www.cmegroup.com/trading/commodities/index.html, 2010-03-21

30
Innovations at farm level
The search for increased output at farm level led to the development of BST (bovine
somatotropin), a metabolic hormone that stimulates growth and increases milk production per
cow. Experiments with this hormone were made during the 1930s, but through the
biotechnological revolution, companies discovered new techniques that facilitated a mass
production of the hormone (The biotechnology education program 1994). BST was approved
by the FDA in November 1993 (Iowa State University 1993). This is, however, one of the
more controversial technological developments in the history of the industry. BST is used in
the United States and also in many Latin American countries, but has not been approved for
usage in Australia, Canada, Japan or Europe. The debate surrounding BST is concerned with
animal as well as human safety. The arguments against BST are that while productivity might
increase with as much as 30% per lactation, the life length of cows would be shortened with
up to two years. Moreover, the risk of infections increases considerably, which also leads to a
rise in the use of antibiotics that eventually end up in the milk. But the biggest concern is the
possible effect on humans. BST has, according to its critics, not been sufficiently tested to
dismiss the harm that the hormone might cause humans (IDF 2006).
Output per cow has also been improved by the development of sexed semen, which is an
improvement on existing insemination techniques. Replacement of culled heifers can be
costly for farmers if the offspring of inseminated cows turns to be predominantly male, or if
the cows lack the desired physical characteristics. Sexed semen allows the farmer to breed
with the herds’ genetically superior animals and also improves the rate of female offspring
with 15%. An additional innovation at farm level is the development of the milk robot that
has gained increasing importance in countries like Sweden, where agriculture is dominated by
family farming.
The new genetics, biotechnology and mechanization require the use of feed that can
support the desired increase in yields per cow. In addition, a new need for increasing the level
of protein has emerged and the development of ultra-high temperature treatment created a
need to reduce the quantity of bacteria in raw milk even further. These issues are reflected in
the new payment schemes implemented by the industry globally, which yield higher payment
for solids and discount from the prices depending on the amount of bacteria, compared to
previous decades when the most important parameter was fat (IDF 2006). The increasing
world demand for cheese (IDF 1995, pp 18) and the development of a large number of
yoghurts and other fresh products that require a raw product of high quality are some of the
reasons behind the shift in payment systems.16 The development of fodder that can serve the
purposes of higher protein levels and improved productivity were made possible by the
development and globalization process of companies that specialize on seeds and fodder
crops. According to Alvaro Eizaguirre, CEO of the transnational seed company Pioneer Hi
Breed Inc’s subsidiary in Chile, the development of improved fodder and the globalization of
animal feed was partly caused by a financial crisis in the seed and fodder crops industry and
its meeting with the “deep pockets” of the biotech industry during the 1990s. For Pioneer in
particular, the access to this “deep pocket” was provided by the acquisition of the company by
DuPont in 1999. According to Eyzaguirre, this led to the development of improved seeds and
a rationalization of the production system of new seeds through the use of counter-seasonal
production in both hemispheres (Eyzaguirre interview 2009).
There are many feeding systems at farm level. Here, however, we will simplify them by
referring to the two dominant systems. One is based on the farm production of fodder/pasture
and the other is based on purchased, often imported fodder. In reality the two models are often
mixed. A common feature of both is that fodder crops have become improved and/or

16
In previous periods the main quality parameter was the amount of fat in milk.

31
genetically modified in order to avoid crop failure, and to enhance the characteristics of the
crops when they are transformed to feed. The transformation of cattle feed has been an
ongoing process during the outset of the 20th century and has been addressed especially by
post-war agricultural policies. But the latest development means a qualitative improvement, as
a result of new technologies and a new organization in the forage industries.
In addition, the rise in competition between dairy companies at global level exerts pressure
on farms (globally) towards increased efficiency, productivity and rise of production per farm.
These new market dynamics led to the globalization of the farm input sector and a process of
consolidation through the interconnection, alliances and fusions between agricultural
companies with biotech companies. For the farms that mainly grow their own feed, the seeds
for fodder crops are produced by fewer and larger companies in a global sourcing system for
seeds. Some of the main crops are fodder maize, alfalfa, sorghum and different varieties of
clover. For the farms that buy a larger part of their fodder, a main ingredient in the fodder is
soybeans. The development of the soybean market has fueled a fast and quite dramatic
increase of soy production in the United States, Brazil and Argentina, and a large share of the
soybeans produced are genetically modified (RR ready). Soybean based fodder is not only
used for milk production, but is also used for other types of animal production and the
production of soybeans mainly takes place in the United States, Argentina, Brazil and China.
Because of this change in the inputs for feed, the production of milk, which used to be local in
all aspects only a century ago, has become a global affair.

Innovations at industry level

There are of course many technologies that are of importance for the industry. In this article
we will only highlight one; the ultrahigh temperature technology (UHT), because of its impact
on the development of new markets. While pasteurization during earlier periods meant the
effective elimination of potential pathogenic microorganisms and contributed to the
eradication of tuberculosis in milk, this new technology eliminates all microorganisms, even
thermoresistant spores, through a total sterilization of the milk (or other food) (University of
Guelph 2008).
This technology has now become widely spread in most parts of the world. It was first
developed as a result of the merger of Tetra Pak with Alfa Laval during the 1990s, when two
complementary technologies, tetra packaging and industrial processing technologies, were
combined. Today there are a few other companies that sell industrial processing systems with
ultrahigh temperature for different uses, for example APV and Krones (Andreasson,
interviewed 2008). The main benefits of this technology are that the total elimination of
bacteria in combination with an automatic packaging system in a sterile environment leads to
the increase of shelf life to more than six months (University of Guelph 2008). Another
benefit is that the products can be transported over long distances without refrigeration. In
addition, the latest versions of the technology contain a membrane filter that purifies the milk
that is less than perfect. Some of the downsides of the technology are that vitamins are
sensitive to the heat, so the industry has chosen to solve this problem through adding vitamins
after the sterilization. In addition, the use of UHT technology requires operations at very large
scale because the system is very expensive (Andreasson, interviewed 2008).
The main results of this technology are that it allowed for a market enlargement of milk to
countries where the climate is hot and where access to refrigerators is still a privilege, thus
supporting the globalization of milk. This is also a very expensive technology, thus the extent
of the investment in itself is a driving force for large scale operations, thus contributing to the
trend of industrial consolidation. In both these senses the UHT technology is a vehicle for
globalization.

32
Market innovations
Global changes of consumption patterns and the appearance of lifestyle oriented consumption
stimulated the emergence of global coffee shop operations. Today’s leading coffee company,
Starbucks, was founded in 1971. The gradual global expansion of Starbucks and other global
coffee shop companies, especially since the 1990s (Ponte 2002: 1099-1122) led to an increase
in the use of milk, as the coffee prepared was, amongst other products, lattes and cappuccinos.
The new consumers are adults that fell for the latte trend. This development has, however,
not entirely been driven by the coffee shop companies. Dairy industries have also taken an
active part in this development. Swedish Arla, for example, launched the lifestyle campaign
”Café au lait” in 1985. The reason was that consumption had stagnated and the company felt a
need to stimulate consumption (Willers 2010). This campaign was a success, especially
among younger people. New expressions were coined, for example “latte mamma” and ”latte
papa” (a café latte-drinking mother or father on parental leave) to match the new coffee shop
lifestyle.

Institutional aspects - dairy regulation under a global food order

The regulations adopted in the EEC led to almost a duplication of output between 1968 and
1983. The expected expansion of the EC led to the adoption of milk quotas in 1984. Milk
quotas were also implemented in North America, but in Europe, negotiations between
member states led to different outcomes for different countries. While France, Holland and
Ireland managed to increase their total output under the quota, Germany was forced to cut
down to levels matching those of 1968. Thus, for some EU countries, the adoption of the
quota was highly dynamic (IDF 1993::11-12). Overproduction was a recurrent problem and
systems for herd conversion have been introduced and implemented over the years – with
doubtful results. The initial idea behind the dairy policy of the CAP was to secure the supply
of dairy products, but production increased faster than consumption (IDF 1993:32-34).
The process of convergence of markets within the EU created new market opportunities for
export oriented EU countries like Denmark and Holland. For Southern European countries
that were characterized by a large number of small-scale dairies convergence created new
threats. Cheese producers were especially vulnerable. France, Italy and Spain joined forces to
meet this threat and adopted a quality regulation that would protect small scale dairies.
Manuel Lainz, responsible for this regulation in Cantabria Spain, argued that: “Danish cheese
was flooding all Europe. Tthe cheese was cheaper than the Spanish, and it was good, too. We
had to do something to prevent our cheese producers from disappearing”(Lainz interviewed
2009). The first regulation 2081/92 was adopted in 1993 and the first products became
certified within the system.17 The regulation was sharpened in 2006 within the 510/2006
regulation adopted after the EU reached an agreement with the WTO (Ernlund and Ionescu
interviewed 2009).
Perhaps the most important institutional change of the period was the abolishment of the
GATT and adoption of negotiations within the frame of the WTO. Under the new regime, one
of the primary goals has been to abolish export subsidies and trade barriers, but it has been
extremely difficult to get an agreement (IDF 1999:16). In 2003, the dairy market continued to
be the most distorted agro-food market. That same year, the US implemented direct and
countercyclical payments, disaster aid, government purchases, marketing orders, import
quotas, tariffs and export subsidies. The EU implemented supply management, intervention,
storage aid, consumer subsidies, tariffs, import quotas and export subsidies; Canada
implemented disaster aid, supply management, support prices, tariffs, import quotas and
17
When the first regulation was passed by the European Community, products that already had denomination of origins
within the frame of national AOC systems

33
export subsidies; Japan implemented producer payments, production quotas, consumer
subsidies, tariffs and import quotas. The most liberalized countries were Australia and New
Zealand that only implemented tariffs and import quotas. Thus, in spite the agreement of
replacing nontariff barriers, import monopolies, duties and other taxes, the level of protection
in developed countries continued to be extremely high until recently (Langley et al. 2003).
In 2007, under the financial pressure of an increasing number of member states the EU
decided to abolish export subsidies for dairy products. At the time it was not a difficult
decision, because world market prices were at the top. But as prices started to fall in 2008,
voices were raised to reinstate export subsidies. In January 2009, the EU, responding to the
demands from farmers, started to reverse the process of liberalization and carried through
large purchases of butter and skim milk powder. The EU also decided to reinstate export
subsidies and initiated a change in legislation in order to include dairy products into the
market stabilization measures allowed through regulation 1234/200 (EU Document
2009/0152). The export subsidies were stopped again from all dairy products except for butter
starting from the 6th of November 2009 through regulations nr 1056/2009 and 1059/2009.
However, it might be reinstated if the market situation changes again (Exportenheten vid
Landsbygdsverkets Marknadsstödsavdelning 2010).

A global industry
The dairy sector was previously characterized by the predominance of a strong, forward,
integrated cooperative sector intimately connected to state interests in most countries. The
existing international companies were organized through subsidiaries, developed to work on
many national markets, the possibility of affording state of the art technologies limited the
expansion of most dairy companies/cooperatives and the costs of transport limited
transnational activities. Today, one of the main features of the sector is the decline of
cooperatives and the increasing size of dairy companies due to mergers and joint ventures.
State of the art technologies have become more affordable, the educational level in most
countries has increased and made the assimilation of new technologies easier, international
transports are much faster and less expensive, and the demand for dairy products is higher in
emerging economies. The changing conditions fueled a far-reaching structural transformation
process. Most transnational companies disclose an increase in cross-border presence through
investments, joint ventures and or subsidiaries. Bongrain, for example, increased its foreign
market presence from 10 in 1985 to 17 in 1998, Danone increased from 10 to 26 over the
same period and Lactalis increased from 2 to 11 (IDF 2001:39-41).
In the line of production, dairy companies have been moving towards different strategies:
some have focused on mass production of commodities, others on production of high-tech
health food and differentiated products (USDA 2006). A general global trend is that
companies broadened their product portfolios, strategic alliances have become common and
the rate of mergers have risen considerably (Dobson 2002:4, Rytkönen 2004:135-148).
Most companies above have at some point carried out strategic cooperation, been involved
in joint ventures, or gone through mergers. Over the last couple of years there is both
continuity and remarkable change. Europe, USA and Oceania still dominate the global dairy
scene. However, there are now two Chinese dairies on the top 20 list and the Japanese
company is advancing. A marked characteristic of the big players are that they implement
global or regional sourcing strategies. These global or regional strategies are highly
influenced by the emergence of powerful customers and changes in dairy politics (Dobson et
al. 2002:4).

34
Table 1. The top 20 dairy players 2011 and 2000, Millions of USD
Company Turnover 2011 Turnover 2000 Country
Nestlé 25,7 13 Switzerland
Danone 19,5 6 France
Lactalis 18,8 5,1 France
Fonterra 15,7 5 New Zealand
Friesland/Campania 13,4 Netherlands
Dairy Farmers of America 13 6,7 USA
Dean Foods 11,7 9 USA
Arla Foods 10,3 4,4 Denmark/Sweden
Kraft Foods 7,7 6,1 USA
Meiji 7,4 3,2 Japan
Unilever 7,2 5 Netherlands/UK
Saputo 6,9 Canada
DMK 6,4 Germany
Sodiaal 6,1 France
Yili 5,8 China
Mengiu 5,8 China
Bongrain 5.5 3,6 France
Muller 4,6 Germany
Screiber Foods 4,5 USA
Land O’Lakes 4,3 Germany
** In 2008 Friesland Campina was founded as the result of a merger of two companies, (a)Friesland-Coberco
and (b)Campina-Melkunie.
Source: Hunt Tim, Global Dairy Top-20, Jostling for a position in a changing global market, Rabobank
2012;Voorbergen Mark, Global Dairy top 20, The calm before the storm? Rabobank 2009.

Nestlé, the world leader, implements a strategy that aims at market dominance in food
through the establishment of subsidiaries in all continents. Nestlé has been more restrictive on
the number of partnerships and the economic goal is to achieve four percent per year real
internal growth (Dobson et al. 2002:4). They also implement a policy of continuous
improvement and constant cost-cutting, which leads to a constant strive to buy milk from
larger and fewer farms (Jaton interviewed 2007). They focus on the long-run balance sales
between low-risk and low-growth operations all over the world. Fonterra defined a strategy
of world leadership in dairy in the 1980s: “through acquisitions and joint ventures with
companies already operating in the inaccessible part of the market”. The profit targets were
15% of a minimum return on the total gross assets and an annual growth of 15% in revenues.
In 2004/05 the total shareholder returns was 17,2 % (Fonterra 2004, Dobson et al. 2002:4).
Fonterra and Nestlé are examples of the patterns of fusions and cooperation through a
strategic alliance called Dairy Partners Americas (DPA). The DPA coordinates operations,
ensures the access of raw materials for both partners and allows for a faster growth through
cooperation rather than competition. The size of DPA strengthens the market position of the
partners vis-a-vis competitors, but it might also be helpful in relation to supermarket chains.
The alliance has been implemented through joint ventures in many Latin American countries.
The alliance has been useful for the penetration of the Mercosur area and the production of
commodities that target exports to Asia, the Middle East and Africa (Rytkönen 2009).
Lactalis is the leading milk collector in Europe. The company has carried through a large
number of takeovers in France, Italy, Ireland, the UK, Russia, Ukraine and many other
countries.18 The third place in the turnover rating is the result of the successful acquisitions
since 1990. Danone, the second largest company, has also evolved as the result of a large
number of acquisitions. Danone owns a large number of well-known brands involving bottled

18
http://www.lactalis.fr/english/groupe/historique.htm 2010-03-12

35
waters, medical nutrition and ultra fraiche dairy products such as yoghurts and functional
foods.19
Phillip Morris acquired General Foods in 1985 and Kraft in 1988. In 2000 the company
acquired Nabisco Holdings. The main strategy of Kraft has been to accelerate the growth of
core brands, achieve category leadership, increase productivity and build employee and
organizational excellence. Philadelphia Cheese is one of the brands of Kraft. Dean Foods is
the result of a merger between US based Dean Foods and Suiza Foods. Some of the main
strategies of Dean foods is to develop regional dairies and to process milk for supermarket
brands such as Albetson’s and Wal-Mart. Dairy Farmers of America is the result of a long
series of mergers that started in the 1960s, their main strategy being to target the high value
market for fluid milk. The DFA has alliances with Fonterra. Land O’Lakes has carried out a
number of acquisitions during the last decades and they have a diversified strategy that ranges
from fluid milk to livestock feed (Dobson et al. 2002:4).

Concluding remarks
The dairy industry started to emerge more than a century ago in response to the needs of
industrial and urbanized societies. Most of the early technologies focused on the need to
increase scales, improve sanitary conditions and create basic conditions to sustain the local
and national trade with dairy products. Farmers organized and were able to gain sufficient
negotiating power to influence the development of dairy policies in most countries. One
important reason was the vulnerability of nations when they were exposed to wars and crisis.
As a result, the dairy market became one of the most distorted ones in the history of food and
agriculture.
Over the last decades, the structure and focus of the industry shifted from the national to
the global level. Although the amount of dairy products that are used in international trade is
still small, trade is increasing faster than production. The combination of knowledge and
capital between the fodder and biotechnology industries, scientific advances in the field of
genetics and the combination of packaging and industrial processing technologies through
industrial mergers have contributed to a qualitative shift in dairy production and trade. An
important feature of the state of the art technologies today, is that they can sustain a global
expansion. This is especially true for UHT technology, because it prolongs the product life
and enables long transportations without refrigeration that are less expensive than refrigerated
transports.
While dairy regulation was sufficient to protect and stabilize the dairy trade in the past,
today, international price volatility can impact even regulated markets. One important reason
is that inputs have become global commodities; another is that as companies become more
dependent on exports and that fluctuations in global prices affect operations at all levels.
One of the differences between the two periods is that while the former was characterized
by technologies, regulations and industrial structure that was necessary for the emergence and
the long-term economic sustainability of national industries, the latter is characterized by
technologies and an industrial structure needed for globalizing operations. In the case of the
current institutional frame, there is still a long way to go before regulations in all countries
can support globalization. If the removal of trade obstacles and export subsidies in Europe
becomes permanent, it is probably going to make a deep impact on the industry in the near
future.
Since the late 19th century, dairy cooperatives and firms emerged as an organized economic
branch and, during the process, became national champions in several nations’ search for food
security. During the last decades, the power obtained by these champions gradually declined.

19
http://www.danone.com/en/brands/business/fresh-dairy-products.html 2010-03-12

36
The markets that these agents relied on stagnated and dairy companies and cooperatives
started to merge in order to survive the pressure of increased competition. When new markets
opened up, the remaining companies continued to merge and join forces in order to manage
the expansion to these new markets. In this new situation, the old national champions became
global players in a business that becomes more integrated and increasingly dependent on the
actions of transnational retailers, traders and brokers.

Sources
Interviews
Yvonne Andreasson, Industrial systems manager at Tetrapak, 16th of May 2008
Martin Buxedas, Milk Director, Ministry of Agriculture in Uruguay and Alfredo Hernandez
Gegler, statistical expert, Ministry of Agriculture, 1st of March 2008
Stefan Ernlund and Carmina Ionescu, Certification experts at Livsmedelsverket, Interviewed
November 2009.
Alvaro Eyzaguirre, CEO of Pioneer Hi Breed Chile, Interviewed March 2009.
Alfredo Gonzalez Parodi, Quality managerof PILI SA, 27th of February 2008
Jerome Jaton, Director of the Nestlé factory in Lagos de Moreno, 27th of July 2007.
Hans Klausen agronomist at the dairy cooperative Claldy 26st of February 2008
Manuel Lainz, Quality director at ODECA in Cantabria, Spain. 19th of June 2009
Klaus –Wilhelm Lege, Director of Claldy, 25th of February 2008
Enrique Malcouri, Alfredo Rodriguez, and Antonio Pizzorno from the dairy cooperative
Conaprole, 28th of February 2008.
Jose Luis Villacaña Vazques, Director of the International Dairy Federation office in Mexico
City, 23th of July 2007.

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Stevens B. Louise (1913), School Feeding: Its History and Practice at Home and Abroad,
Philadelphia and London, J. B. Lippincott.
Tannanhill R (1989), Food in history, New York, Three Rivers Press.
The Biotechnology Education Program (1994), Factsheet, Some Questions and Answers
about BGH/BST, The Biotechnology Education Program of the University of Wisconsin-
Extension and the UW Biotechnology Center.
Tullberg Per (1977), Bönder går samman, En studie I Riksförbundet Landsbygdens Folk
under världskrisen 1929-1933, LTs Förlag.
University of Guelph (2008), UHT, Processing, Dairy Science and Technology Database,
University of Guelph, Canada, http://www.foodsci.uoguelph.ca/dairyedu/uht.html, 2010-
03-08
USDA (2005), Cooperatives in the Dairy industry, Cooperative Information, Report 1,
Section 16, 2005.
USDA (2006), Dairy: World Markets and Trade, Foreign Agricultural Service FD2-06, dec.
Willers Katarina (2010), Carl-Arne Samuelson – en plikttrogen problemlösare Vd 1984–1990.
www.cfn.se
Wolfson Richard (1999), “How bovine growth hormone was rejected in Canada”, Consumer
Health Volume 22 Issue 9.
Voorbergen Mark (2009), Global Dairy top 20, The calm before the storm? Rabobank

39
Web Lecture
Stephensson Mark, Dairy price Volatility, webinar held at the CME group 2007-11-29,
available at http://accordent.powerstream.net/008/00102/071129fdsa/msh.html
Web pages.
http://www4.dr-rath-foundation.org/features/codex_wto.html 2010-03-02
http://www.arla.com/press/archive/boycott-cost-each-co-operative-member-dkk-40000/ 2010-
04-12
http://www.cmegroup.com/trading/commodities/index.html 2010-03-21
http://www.danone.com/en/brands/business/fresh-dairy-products.html 2010-03-12
www.fedeleche.cl 2010-03-08
http://faostat.fao.org/site/339/default.aspx 2013-04-14
http://www.lactalis.fr/english/groupe/historique.htm 2010-03-12
www.nestle.com 2010-03-23

40
41
 42
Photo: Paulina Rytkönen, Cow ina mountain corral in Peru, 2008
Part II. National experiences in the history of the dairy sector

43
44
 2. From small scale artisan and farm house production to a
global player: The French dairy sector in the post-war period

Ulf Jonsson

Introduction
Until the post war era the French dairy sector was significantly more small scale and
fragmented compared to the main European competitors. In most West European countries
the transition from an artisan and/or farm house based butter and cheese production to an
industrial processing was completed by the 1930s. France advanced in a much slower pace.
Still in the inter-war years on farm production of butter captured a large share of the total.
Without any ambitions to give a complete picture some important factors are worth
mentioning (Jonsson et al 2004). First of all the French dairy industry was to a large extent
dependent on the home market, this is particularly true for butter but also for cheeses.
Furthermore most of the cheese export went to French colonies in particular North Africa thus
to customers with preferences close to those at home20.
However, the French dairy as the food market in general was in many respects more
differentiated than in most other western countries. Take butter as an example, the lower
segments were to a large extent supplied by farm house produced butter of low and shifting
quality. Farm house produced butter varied considerable in quality from a small segment of
gourmet butter for demanding upper class clients to simpler goods for direct sale in the
country side or to working class customers in nearby towns (Fremont, 1967:147-148). A
highly differentiated market did not encourage industrialization either in private or
cooperative form in the old strong holds of dairy farming. For many farmers it was favourable
to keep the production of butter at the farm. Milk production was only part of a markedly
diversified system of farming. In such a situation farm house production offered many
advantages for the individual peasant. He could chose to produce butter on the farm or sell it
to a private dairy according to the option most favourable in each specific situation.
Technological development in particular the small scale cream separator also contributed to
strengthen the farm house production.
There were exceptions to this pattern. In Poitou-Charente, a region close to the strong hold
of farm house production in Normandy and Brittany industrial co-operative dairies answered
for the lion’s share of butter production. In this region dairy farming was established only
after a crisis of local wine cultivation. Thus, was no old established tradition of farm house
butter making. The developed system of middle men connecting farmers in Normandy and
Brittany to market did not exist. However, the dairies were compared to their Danish and
Dutch counterparts relatively small (Julien-Labruyère, 1982:422-426). Another exception was
cheese production in the Eastern Alpine region, where a tradition of industrial but small scale
cooperatives, fruitièrs processed a significant part of the milk (Delfosse, 2007:60-76). Thus,
in the cheese sector we saw some timid steps towards industrialization and the development

20
In 1938 the North African colonies took 56 percent of the French cheese export (Commonwealth Economic Committee,
1948, pp 25-27).

45
of some national rather than strictly regional brands. The ambitions of the industrialists to
reduce variation and the number of cheeses were not crowned with success. The resistance of
the amateurs of local cheeses and their ideas that cheese was a product of a specific locality
just like wine could not be eradicated (Fremont, 1967:96-98).
Thus, the French dairy sector was significantly less industrialized then in other western
countries up to the Second World War. The global player of today was still far away.

The Rise of a Global Giant: the French Dairy Sector in the Post War Period
In the post war era the French agro-food sector went through a rapid modernization. This is
equally true for agriculture and food industries. Between 1950 and 1980 the productivity in
agriculture did increase by seven per cent per year. The small scale food processing and food
distributing enterprises changed thoroughly. In a number of different sectors we saw the
emergence of French based/owned global companies. In first decade of the twenty first
century, no less than three French dairy companies are found on the list of the twenty top
global dairy companies, two of them Danone and Lactalis occupy the second and the third
place (Hunt, 2012). Few observers would have imagined such a development in the early post
war years. In the following I will try to examine the basic traits of this dynamic and delineate
some of the specificities of the French dairy market in order to situate the leading companies
and their strategies in a wider context.
The long period of economic expansion from the end of the Second World War until the
mid 1970’s, dubbed the thirty glorious years, Les Trente Glorieurses, according to the
economist Jean Fourastier, opened up a large window of opportunity for private as well as co-
operative dairies (Fourastier, 1979).21 Regionally based companies expanded rapidly. In
regions like Brittany and Normandy both strongholds of farm house processing industrial
dairies triumphed. The period of peaceful coexistence between co-operative and private
companies and between enterprises of various sizes came under increasing pressure from the
late 1960s and onwards. The last twenty years have been characterized by growing
concentration. In this process of concentration it is the middle sized companies that have
experienced the greatest difficulties. The French dairy sector has become increasingly
polarized. The “big fishes” advance and in certain sectors small scale niche producers thrive
(see the chapter 2 in this volume). In the race to the top the co-operative sector has lost out to
more dynamic private firms. The cooperative dairy sector has also gone through a phase of
concentration. Already in the mid 1960’s the biggest coop Sodiaal was formed through a
merger of six regional cooperatives.22 One of the biggest assets of the Sodiaal group is the
yoghurt brand Yoplait that has a global reach. However in general the co-operative sector has
its stronghold in the least dynamic part of the market. In 2005 the co-operative dairies
collected 47 per cent of the milk and held 47 per cent of the liquid milk and 50 per cent of the
butter market. In high value lines of production like cheeses and yoghurts and milk based
desserts the co-operatives had less than thirty per cent. 23 In a recently published monograph
of midsized dairy cooperatives in south western France the author Hubert Bonin clearly
identifies a number of important structural handicaps. What was a source of strength such as
local implantation and a strong sense of civic pride among the members in the early phase of
the post war expansion is increasingly becoming a liability (Bonin, 2006). Nonetheless it is
too early to announce the ultimate decline of dairy co-operation in France. In the present
context of increasing competitive pressure one way out is continuing concentration within the

21
By using this term Fourastier wanted to underline the thoroughness of the transformation the French society experienced in
these years.
22
www.sodiaal.fr, 2009-10-26. Formally it was an agreement of cooperation between the six regional entities. The
Sodiaalgroup was not formed until the beginning of this century.
23
www.coopfrance.coop, 2009-10-27

46
co-operative sphere and/or alliances with private firms. Recently the cheese producing
subsidiary, RicheMonts, of the biggest cooperative has formed a joint venture with the
expanding private cheese company Bongrain.24 For large scale mass producers it means that
the specific traits of the co-operative organization weaken and the diving line towards the
private sector becomes more and more blurred.25
The achievement of the French dairy industry in the post war era is quite impressive. Of
course we have to into account the common agricultural policy of European Union putting
considerable resources through subsidies into the sector. Still the transition from a situation
where the dairy industry barely succeeded to satisfy the domestic market to one of the largest
net exporters, in 2008 the dairy industry generated a positive balance of 3.5 billion € cannot
be accredited subsidies alone. Furthermore, it is the high value segments such as cheese,
yoghurts and milk based desserts that created the lion’s share of the surplus. Bulk products
such as milk powder are of minor importance.26
The next part of the article will be devoted to a brief case study of four the leading actors
on the French dairy scene, the private companies, Danone, Lactalis and Bongrain and the
cooperative group Sodiaal. Finally the specificities of the French dairy market, the lasting
coexistence between global giants and small scale quality producers will be discussed.

The global dairies in France: Strategies and prospects

Among the four leading companies on the French dairy scene, Danone, Lactalis, Bongrain,
and Sodiaal, the first mentioned is the most singular case. Lactalis and Bongrain were from
the very beginnings in the mid 1930’s (Lactalis) and in the mid 1950’s (Bongrain Sodiaal)
from the very start when six regional cooperatives merged in the mid 1960’s strongly
anchored in the dairy industry, Danone has a more quite another history not at all connected
to the dairy industry, which is of certain importance to understand the evolution of the
company and its present strategies. Danone has never been an all-inclusive dairy company
present in all lines of production, liquid milk, butter, cheese and milk powder as is the case of
the two other companies.

Danone the giant of fresh dairy produce

The start of the present company was in fact not at all directly associated with the agro-food
industry but of a merger between two middle sized French glass makers one specializing in
bottles and the other in flat glasses. To make a long and complex story short the company
dissociated itself from the glass business and developed into a food industry conglomerate.
The future Danone was present in a number of different lines of production, beer, mineral
waters, ready-made dishes, biscuits and what is called fresh dairy products in French, i.e.
yoghurts, fresh cheeses and milk based desserts (Labasse, 1997:301-306).Over the last
decades this highly diversified enterprise has concentrated on fewer and fewer lines of
production. In 2007 Danone sold its biscuit enterprise to Krafts the global leader in this
industry and the Dutch firm Royal Numico, a global top company in infant and medical
nutrition specialising in what the company chairman Franck Riboud calls food for health:
yoghurts with active bacteria cultures so called probiotic food stuffs, mineral water and
infant/medical nutrition. The goal is to enforce the standing of the company as a number one
supplier of healthy food. Riboud does not mention the role of milk based desserts in this

24
www.fromagium.typehead.com, 2009-0930
25
This is also the case in countries like Scandinavia, the Netherlands and New Zealand where cooperatives are the dominant
player. To be competitive on the world market and realize important economies of scale the link between the individual
farmer member and the powerful industrial organization of which he/she is formally the owner tends to weaken.
26
www.maison-du-lait.com/chiffres/PDF/Chiffre_cles_2008.pdf, 2010-01-15

47
context. Today Danone is the world leader in fresh dairy products, number two in bottled
waters and number two in baby nutrition and the European leader in medical nutrition
(Danone 2008).
Clearly, Danone has developed into a leading global company. Europe still accounts for 63
percent of the sales but the majority of the work force is now located outside the old
continent. Of the over 80 000 persons employed almost 50 000 work in other parts of the
world. Fresh dairy products are the most important segment with 57 per cent of the sales
(Danone Annual Report 2008 pp 100-101) Nonetheless, Danone is very far from a traditional
dairy company. Large and historically important product segments such liquid milk, butter,
cheese and simple milk powder are entirely absent from the business. It is a mass producing
company but firmly confined to the high value end of the market what the French call
produits ultra frais. The conglomerate of the 1970s has become a company with only three
lines of production fresh dairy, bottled water and baby/medical nutrition. To stay on the top,
Danone has compared to a conventional dairy company a fairly large research and
development budget.27
Over the last thirty years Danone has managed to develop into a leading global agro-food
company. The horizon and the ambitions are truly global. Europe including the emerging
economies in the eastern and central parts of the continent is still the most important
geographical zone but the expansion is to a large and increasing extent taking place in Asia,
the Middle East and Latin America. In many senses the path followed by Danone resembles
that the global competitor the Swiss agro-food giant Nestle. Both companies use strategic
alliances and/or acquisitions of local more conventional dairies to secure their sourcing of
milk rather than building a full-fledged milk collecting organization.
Danone as well as main the global competitor Nestle focus on brand management and the
development of new products in the functional food segment. There are no references to the
French roots of the company. The identity that the company is presenting to the public is that
a high tech company highly innovative with a strong social and environmental engagement.
The company very consciously tries to position the activity as centred on foods for health. It is
health foods demanding a large component of biotechnical knowledge and research. In the
world of Danone healthy foods are produced in labs. It has nothing to do with ecological
preferably locally sourced milk. In the conceptual apparatus forwarded by Tim Lang and
Michael Heasman it is a company firmly anchored in the Life Science paradigm, which
according to the authors is a biotechnical addition to the old agro-industrial model the
productivist paradigm (Lang, et. al, 2004).
Thus modernity and global presence rather than age old French qualities are the image
Danone favour. The global reach of the company has its limitations. Europe including the
emerging economies in the eastern and central part still dominates the sales, 63 percent and
Western Europe alone takes almost 48 percent. Especially on the rapidly expanding Asian
market Danone has had difficulties to get a firm foothold. A Chinese joint venture has
recently ended (Press release Danone, 2009). On the Indian market the company has had
difficulties in establishing a strong and stable presence. On the gigantic Asian market fresh
dairy products only accounts for 7.8 percent of total sales baby nutrition and waters constitute
the main share. Due to a strong presence in these segments Asia amounts to 12 per cent of the
total sales. On the North and Latin American markets, on the other hand, Danone’s fresh
dairy segment has a strong foothold number one in each part of the continent. The Americas
answer for 21.5 per cent of total sales (3.28 billion euros) 2008. (Danone Annual Report
2008, pp 14-15, 100-101) To sum up Danone has successfully completed the move from a
glassmaker producing bottles and cans for dairy products, mineral water and beer to food
27
For an inhouse statement of the research strategies see an interview with the director responsible for coordination of the
company’s research, Sven Thormalen, Danone, Annual report 2008, pp 43-45.

48
conglomerate and finally to a specialized global company consciously positioning itself as a
producer of scientifically engineered “foods for health”. Fresh dairy products constitutes over
half of the total sales. Still, the company is far from a traditional dairy enterprise. The
company has consciously avoided getting involved in the bulk products of the industry liquid
milk, powder, butter and cheese. Undoubtedly Danone, is one of the great post war success
stories in the French dairy and in the agro-food sector in general. Of course the present
economic downturn has hit the company but less so than in almost any sector. In the first nine
months of 2009 consolidated sales decreased by 2.1 per cent, a figure that many companies in
other sectors would envy (Press release Danone, 23rd October 2009).

Competitors on the global cheese market: Groupe Lactalis and Bongrain

Groupe Lactalis and Bongrain, number three and thirteen on the global top twenty list are
more of traditional dairy industries present in all segments of production. However, in both
cases cheese constitute the lion’s share of the total sales and generating most of the profits.
Lactalis started in the mid 1933 as a small private company by the entrepreneur André
Besnier in small provincial town of Laval in the department of Mayenne in western France.
The company is still exclusively owned and controlled by the Besnier family. It is only in the
post war period under the leadership of Michel Besnier that the company begins the rise to
global eminence. From the mid1980s the expansion of the company accelerates through a
series of successful mergers and acquisition inside and increasingly outside France. The
United States was the first arena outside France receiving Lactalis investments. Today,
Groupe Lactalis has production units in Italy, Spain, Switzerland, Great Britain, Russia, and
Ukraine and in the Balkans. After the latest acquisitions in Italy the company has become the
number one cheese maker in that country as of course also in France.28 Thus, besides the USA
the foreign expansion is very much European in the wide sense. In that sense it is less of
global actor than Danone. The strong focus in cheese makes it favourable to invest in
locations with a strong tradition in this type of production.
A corner stone in the strategy of the company has been mass production organized around
a relatively small number of strong trademarks. The most well-known is President used for
pasteurized standard Camembert, Brie and Coulumbier as well as butter. The foreign
acquisitions have added locally strong trademarks like the 1997 take-over of the Italian cheese
form Locatelli from Nestle and the take-over of an another leading Italian cheese maker
Galbani 2006. The strongest local brands can be developed into global assets on export
markets. Acquisitions of foreign cheese makers are normally outright takeovers. The firm
bought is completely integrated into Lactalis under full ownership. In other lines of dairy
production where the leadership of the company is less confirmed various forms of joint
ventures are tried. The recent joint venture with Nestle in fresh dairy products constitutes a
good example. The two global companies have agreed to create a new company called
Lactalis Nestle Produits Frais, covering nine countries in Europe. Lactalis has 60 per cent
share in the new enterprise, which is number two in Europe in this product segment
confronting the leader Danone. On its own Lactalis would has had serious difficulties
competing with Danone. Nestle an old global leader in this segment has got access to milk
collecting organization since more than five decades developed and fine tuned by Lactalis29.
Thus it is through the strength in standardized mass production, although very often with
trade marks in the upper segment that Lactalis has moved from the small artisan provincial
dairy of the 1930s to the present global company. Undoubtedly, looking at the figures only the
28
The following is to a large extent based on an in-house history of the company produced by a former director a of the
company aided by a journalist, Urion , Matthieu, (2004)
29
For a similar view of the dynamics behind this joint venture see, Nestle prepare l’amélioration des sesproduitsfrais avec
Lactalis, www.blogagroalimentaire.com 2010-01-09

49
result is impressive. When Michel Besnier took over the company 1955 it was still a small
scale artisan dairy employing 50 person collecting 7 million litres of milk in one production
site in Laval . The turn-over was very modest 2.4 million new francs. In 2008 the company
employs 38 000 person in 127 production sites. A majority of the working force is found
outside France. The turnover has increased to 9.3 billion euros and the milk collected is 9.35
billion litres and 60 per cent of the turnover is generated outside France.30
In spite of the strong focus on mass production Lactalis also has a keen interest in high
quality niche production. The top segment of high quality European niche cheeses is those
with the sign Appellation d’origine contrôlée. The system and its importance in the French
dairy sector is discussed in further detail in another chapter, see Only France has cheeses like
these, pp. 00. Here I will only try to identify the dynamic behind the interest of a big global
company in this sector.
During the 1980s and in particular in the1990s Lactalis acquired a number of small and
midsized dairies producing AOC-cheeses including the dominant Roquefort firm Société Des
Caves Et Producteurs Reunis de Roquefort. Today the company has over thirty AOC-cheeses
in its product portfolio. Since 2001 Lactalis decided to group all the AOC-cheese in a separate
department around Société containing 3000 employees in 30 dairies spread over the French
territory. In the press release announcing the federation of the AOC-segment under a single
administrative unit the company was eager to communicate that this change did not in any
way interfere with a firm respect of the tradition. Quality based on century old legitimacy, an
ambition to create value added in often disadvantaged regions and defend the AOC as a
spearhead of French gastronomy, was according to Lactalis the main reason behind the
administrative change.31
In 2003 the producer of traditional Italian AOC-cheeses Cademartori was added to the
Italian assets making Latalis number one in Gorgonzola and Taleggio cheeses.32Lactalis does
not lose money in AOC-production. Nonetheless, I think the interest in this line of production
that in volume and value terms is relatively marginal, has to do with the great symbolic
importance of these cheeses. To be present on this prestigious segment of the cheese market
adds to the reputation of the company as a guardian of quality and tradition. To a certain
extent the AOC-segment serves the same function on the cheese scene as the grand cru wine
on the global wine market. It adds to the prestige of the company. The reputation can also be
recycled in the publicity of the up-scale segment of mass production. The relationship
between mass and niche production is not without tensions as the conflict around the AOC-
cheese Camembert de Normandie demonstrates (see the second article by Jonsson in this
volume).
In the beginning of the new millennium Lactalis has achieved the rise to a number one
position as cheese producer. No other company is close in volume and value. In spite of the
global reach of the products it is still in many senses a very French and European company.
French identity and the established French gastronomic reputation form a significant part in
the establishment of the trade marks also for standardized products. In the cheese business
Lactalis always tries to have a full control when buying domestic or foreign companies. In
other lines of dairy production where the knowledge base is less evident joint ventures where
other global dairy companies as in the case with Lactalis Nestle ProduitsFraisare tried.
Furthermore in the first twelve years of the 21st Century Lactalis has pursued a daring
strategy of acquisitions. The most important is the takeover of the asset of the bankrupted
Italian dairy giant Parmalat making the group a truly global company. Until the acquisition of

30
www.lactalis.fr, 2010-01-08
31
Actualites.Lanqueot et Valmont rejointent Roquefort Societé pour former le premier pole francais d´appelation
d´origine,www.lactalis.fr 2001-10-01.
32
www.lactalis.fr, 2009-10-12, www.cademartori.it, 2009-10-14

50
Parmalat, Lactalis was primarily implanted in Europe including East and Central Europe with
a North American extension. Today a presence in Latin America, the Middle East and Africa
has been achieved.33 The acquisition of the second largest Swedish dairy cooperative
Skånemejerier constitutes a considerable consolidation on the North European market but
more in line with Lactalis’ traditional business model. The strategy of the 21st Century
Lactalis is to create a global player in all branches of the dairy industry even if cheeses still
constitutes 35 per cent of the turnover.
Bomgrain is a dynamic challenger of Lactalis’ dominant position on the French and the
global cheese market. Considerably smaller than Lactalis with a turnover of 5.5 million
dollars 2011 the company is pursuing an aggressive but at the same time complex policy of
expansion (Hunt 2012). Cheese is an even more part of the product portfolio answering for
over 60 per cent of total sales. The core of the cheese business has always been pre-packed
cheeses exploiting the historically formed French gastronomic image and reputation.
The first success case was the introduction of the brand Caprice de Dieux in 1956 of which
two billion units have been sold at the fiftieth anniversary of the brand 2006. Over the years
Bongrain has successfully launched a number of this type of brands that are now quite well
known in France and worldwide.34 The blue vein chesse Saint Agur and the soft cheeses
Chaumes and Saint Albray are found in most supermarkets around the world. These brands do
not try to evoke a specific regional identity but rather a vaguer and more general image of
France. Thus, it is in the upper end of mass produced cheeses classified as the middle top
segment (le moyen haut gamme) that Bongrain tries and to a large extent also succeeded to
establish a strong position (Bonin, 2006:291-296). The idea with these lines of production is
to occupy a space between the top segment and mass products without submitting to the
constraints of AOC-production but communicate a more authentic image than simple generic
products. Consequently the company has not tried to get a firm position in the top segment of
AOC-cheeses as the bigger rival Lactalis. The customers are not the most informed
gastronomes but a wider middle class clientele. Especially in the export markets outside Latin
Europe the AOC-system is much less well known. For example, the ordinary middle class
customer in the US or in the Nordic countries looking for a tasty blue vein cheese for the
Saturday cheese tray do not immediately sense the difference between a Saint Agur from
Bongrain and the AOC alternative Le Bleu des Causses. Indirectly the company, of course,
profit from the prestige and reputation AOC-cheeses contribute to establish. Thus, the more
general notion that a country like France dispose of a variety of high quality products are
common knowledge. From time to time the same consumer groups are prepared to a relatively
high price to enjoy these goods. In fact on the two most important markets outside the
European Union French cheeses fetch much higher prices than the bulk products of Australia
and New Zealand.
In 2005 France was the third largest supplier in value terms behind Australia and New
Zealand on the Japanese market. The French sold a very modest volume slightly less than
8000 tons but at a per kilogram price of more than 7 US dollars compared to compared to the
roughly 2.5 dollars for the big bulk suppliers New Zealand and Australia. The same pattern is
also visible on US and Canadian market. (Comtrade 2005)
The expansion of Bongrain has also to a large extent relied on join ventures. In 1992
formed an alliance Union Latière Normande one of the bigger cooperatives in France. The
two partners created a holding company Compagnie Latière Européenne, where Bongrain is a
minority owner. By this agreement Bongrain got access to one of the most prestigious butter
brands, Elle-et-Vire.

33
www.lactalis.fr/doc/DP-L, july 2011, accessed 2012-12-15
34
www.bongrain.com.fr, 2010-01-12

51
Recently a new joint venture with the cheese subsidiary Riches Monts of the biggest
cooperative Sodiaal has been launched. The new company called Compagnie des Fromages et
Riches Monts owned at a 50/50 basis by Sodiaal and Compagnie Latière Européenne will
produce and market most of the brands of Riches Monts and some of the brands of Bongrain
without putting all the valuable assets in that specific basket.35
The investments and establishment of production outside France is also to a large extent
dependent on joint ventures with local actors often cooperatives. This strategy gives the
company a high degree of flexibility and access to foreign markets without engaging the same
amount of capital as a green field investment. Furthermore, Bongrain profits from the local
knowledge their partners possess. Bongrain’s foreign activities is not only focused on
spreading the middle top segment of French cheeses but also developing local cheeses of the
same character when such a tradition is present. The recent acquisition of the Belgian dairy
Passendale from the Dutch global dairy company Campania is an illustrative example.
Passendale is the major actor on the market for a traditional Belgian specialty, les
fromagesd’abbaye, constituting the core of middle top segment cheeses in Belgium.
In other cases the availability of cheap milk, the sourcing of raw material, is the reason
behind an investment in form of a joint venture. This was the case when Bongrain launched a
joint venture with the dominant actor on the Uruguayan dairy scene the cooperative
Conaprole creating the cheese dairy Bonprole on an equity basis. The cheap milk from the
grass fed Uruguayan cattle was according Bongrain uniquely well suited to produce the Dutch
type of hard cheeses Edam, Gouda and Marsdam. Under the brand name Holtzberg the
company is developing the product for export on the Latin American market. The company
consciously tries to represent itself as a truly multicultural enterprise with a product portfolio
reflecting this ambition.36
The international expansion has experienced temporary setback and withdrawals but on the
whole been quite successful. Like the bigger rival Lactalis the core of business is still Europe,
however in some sense Bongrain is more of a global company with a stronger presence on
markets in South both Latin America and Asia. Bongrain is not untouched by the present
crisis (Letissier, 2009). Nevertheless the development from a small scale artisan company to
the global actor of today is by no means threatened.

Sodiaal: a leading cooperative facing troubled times

Sodiaal the biggest cooperative actor is much more of a company firmly anchored in the
national context. In fact the company still resembles the national champion type of enterprise
that characterized the dairy industry in the developed countries during the heydays of the
golden years. In 2008 of the 2.7 billion euros turnover only 15 per cent was generated by
international activities. The production is heavily leaned towards the less dynamic liquid milk
segment. The 1990s has been a difficult period with substantial losses. The cheese branch,
Fromageries Riche Monts has as already been touched upon above (p 9) entered into a joint
venture with the rival private company Bongrain. While the deal was adding strength to
Bongrainit was more of a shot gun marriage for Sodiaal. The cheese business has been losing
money in the 1990s.37
The main global asset is the yoghurt trade mark Yoplait which has been franchised to a
considerable number of international partners and bringing in highly necessary cash
contributions. Although Yoplait is a strong global brand in an expanding segment it is enough
to compensate the structural weaknesses of the company. Sodiaal has a better position than

35
www.bongrain.com.fr, 2010-01-12
36
Bongrain SA, historique, www.bongrain.com.fr, 2010-01-12
37
www.answers.com/topic/sodiaal, 2010-01-15

52
many of the smaller mid-sized cooperatives of which many are facing disclosure. Many sided
dairies present in all segments have difficulties to survive on an increasingly competitive
market where the old system of large subsidies is partly dismantled. Sodiaal is not big enough
to realize the economies of scale that global successful global cooperative competitors like the
Swedish/Danish Arla Foods or the New Zealand dairy giant Fonterra have accomplished.
Both these companies are the dominant actors on their national markets. These companies are
not challenged by dynamic private companies as the French cooperatives. Farmers at the
home base have fewer options which probably give these companies a large room of
maneuver on the global scene. Discontented Swedish, Danish and New Zealand farmers have
not a number of alternatives at hand. Thus, the original cooperative spirit including the voice
of the farmers put a more compelling brake on the actions of French cooperatives. In contexts
where the dominant cooperative is the only or almost the only actor the voice of the farmer is
much weaker. In the mid- 2000s when Sodiaal was trying to get rid of some of money losing
industries an outcry among farmer members led to the forced resignation of the CEO, Nicolas
le Chatelier.38
Still Sodiaal remains an important actor on the French dairy scene and the short term
survival of the company is not threatened. Today carefully selected joint ventures rather than
outright sell outs seem to be the way forward singled out by the present leading team. The last
years the cheese branch has been restructured and into three different companies focusing on
different segments. It is certainly too early to judge the long term prospects of this strategy but
so far the cheese subsidiaries of Sodiaal are important actors on the French and European
market. The other branches also seem to have recovered from the acute crises of the early
2000s.

Concluding remarks
The French dairy industry has experienced a through transformation in the post war era. This
process has gone hand in hand with a rapid process of concentration. Mid-sized companies
without a clear specialty are facing growing difficulties and we can most probably see further
consolidation and a strengthening of the “big fishes”. Today the sector contains some of the
leading global companies.
On the other hand due to the role of gastronomic niche production particularly in the
cheese sector we have witnessed a proliferation of small artisan enterprises. In a period when
well off and well educated customers express a growing uneasiness with standardized food
stuffs there is a ground for a kind of détente between the large global companies and the small
highly specialized artisan producers. The veneration of the local is very much a global
phenomenon, although the specific institutional form with a formalized system of
geographical indications is very much a French construction now adapted by the European
Union.
It is well worth underlining that the present state is not a static and stable constellation. The
French dairy industry, the global companies as well as the small specialized producers, are
under a constant pressure from competitors with a potentially larger milk sourcing base and
cheaper prices such as the countries in the Southern Cone of Latin America. The global
companies can and has matched this development by increasing their presence on exactly
these markets. The present comparative advantage in gastronomic niche production does not
constitute an eternal asset although the French reputation still has a considerable strength.
For the immediate future there are good reasons to believe that the French dairy industry
will remain a leading force globally and continue producing also in France. For the global

38
www.answers.com/topic/sodiaal, 2010-01-15

53
companies, however, direct presence on different markets will become an increasingly
compelling necessity as it is for the competitors in other developed countries. In France the
point of gravity will probably as we have witnessed in the last decades move towards
production in the high value segments. It is exactly in these segments that we find the most
dynamic and expanding companies. Danone has successfully established itself as the global
leader in fresh dairy produce. The image the company is aiming to communicate is that of
producer of food for health, a high tech production making uses of the latest explorations in
bio- and medical science. Of course the competitors are not watching this process without
counter measures and do not intend to leave the scene for Danone to exploit in splendid
isolation. Lactalis and Bongrain have achieved a global leadership on the specialty cheese
market.
These positions cannot be taken for granted. The life on the top to use an almost outworn
truism means constant struggle. However, compared to be stuck in the least dynamic
segments like liquid milk, butter and milk powder, which to a great extent is the faith of the
cooperative sector, it is a more comfortable situation. In 2008 the three leading global
companies had a dairy turnover of 23.6 billion euros which greatly exceed the slightly more
than 7 billon euro turnover of the cooperative dairy sector as a whole (Voorbergen, 2009; La
cooperation agricole 2010). Even with the modest reduction of subsidies achieved so far
France and the old member states of the European Union will face a cut throat competition in
low value bulk products. The days when the French and European industry could supply the
world market with undistinguished standardized goods relying on heavy subsidies are gone.

References
Bonin, Hubert (2006), Les Coopératives laitières du grand Sud-Ouest (1893-2005), Editions
P.L.A.G.E, Paris.
Delfosse, Claire (2007), La France Fromagère (1950-1990), La Boutique de l´histoire
Editions, p. 60-76, Paris.
Danone (2008)Annual Report
Commonwealth Economic Committee (1948) Dairy Produce. London
Fourastier, Jean (1979), Les Trente Glorieusesou la revolution invisible de 1946 à 1975,
Fayard, Paris.
Fremont, Armand (1967), L’Elevage en Normandie. Etude géografique, Caen Publications de
la Faculté des letters et siences humaines de l’Université de Caen, vol. 2, p. 147-148.
Hunt, T, Global Dairy Top-20. (2012), Jostling for a position in a changing global market,
Rabobank
Jonsson, Ulf and Pettersson, Ronny (2004),”Den franska bondens möte med marknaden och
kooperationen inom mejrienäringen”, in: Rydén (ed), Jordbrukarnas kooperativa
föreningar och intresseorganisationer i ett historiskt perspektiv, The Royal Academy of
Agricultural Sciences, Stockholm.
Julien-Labruyère, Francois (1982), « Paysans charentais. Histoire de campagnes d’Aunis »,
Saintonge et Angoumais, Rupella, Vol. 1, p. 422-426, La Rochelle.
Labasse, Pierre (1997), “De BSN à Danone” in: Marseille (ed), Les industries agro-
alimentaires en France. Histoire et performances, Le Monde Editions, p. 301-306, Paris.
Lang, Tim and Heasman, Michael (2004), Food Wars.Battle for Mouths, Minds and Markets,
Earthscan, London.
Letissier, Ivan (2009), “Le plan de Bongrain pour réorganiser la filière latière”, Le Figaro, 31
august.
Voorbergen, Martin (2009), Global Dairy Top-20, Rabobank International, 3 July.

54
UN Statistical Division COMTRADE 2005
Urion Marcel and Noli, Matthieu (2004), La Saga Lactalis, Bottin Gourmand, Paris.

Internet links
www.answers.com/topic/sodiaal, 2010-01-15
www.blogagroalimentaire.com 2010-01-09, Nestle prepare l’amélioration des sesproduitsfrais
avec Lactalis
www.bongrain.com.fr, 2010-01-12, Bongrain SA, historique.
www.cademartori.it, 2009-10-14
www.cooperation.agricole.fr 2010-01-15, La coopération agricole francaise. Analyse de
périmètre coopérative et des secturs d’activité.
www.coopfrance.coop, 2009-10-27
www.danone.com 2009-11.09, Press release Danone, 23 October 2009
www.danone.com 2009-10-09, Press release Danone, 30 September 2009.
www.danone.com, 2008-10-26, Interview with Franck Riboud – April 2008,
www.fromagium.typehead.com, 2009-09-30
www.lactalis.fr 2001-10-01, Actualites.Lanqueotet Valmont rejo intent Roquefort Societé
pour former le premier pole francaisd´appelation d´origine.
www.lactalis.fr, 2009-10-12
www.lactalis.fr, 2010-01-08
www.maison-du-lait.com/chiffres/PDF/Chiffre_cles_2008.pdf, 2010-01-15
www.sodiaal.fr, 2009-10-26

55
56
 3. Policy, technology and development in the Mexican dairy
sector

Luis Arturo Garcia Hernandez

Livestock and dairy production is an ancient economic activity in Europe. In Mexico,

livestock was first introduced by the Spanish conquistadores five centuries ago. During the
second half of the 20th Century, dairy production and trade became the subject of
specialization as a result of the globalization of the sector. This chapter tries to identify the
principal characteristics of the Mexican dairy sector and production system, by analyzing its
organization and articulation.

Background
Policy is understood as group of activities under an ideological framework which allow us, as
a group, to reach certain objectives. In the case of Mexico, different ideological frameworks
for the political have been and are supported by a social contract that conditions the
development of society during specific periods of time, each one of them with specific and
distinctive characteristics. For the purpose of this chapter, three such specific and distinctive
periods can be identified. The first is the Colonial period, which as we will see later, had the
objective to incorporate the population into the ideology of the government of the time; and
during which cattle played a key role for that specific state goal. The second is the period
between 1810 when the War of Independence took place and 1910, when the Mexican
Revolution took place, during which the independent Mexican State was formed and that was
characterized by great instability and stagnation for the rural sector. The third started during
the Post-Revolution and is still going on until the present day. The latter was first
characterized during its first 70 years by the ideology and policies of the Institutional
Revolutionary Party and the shift of policies during rercent years caused by the accession to
power of right wing groups in the year 2000. .
Mexico has one of the largest dairy producers in the world as its closest neighbour, the
United States. Although the US dairy sector is not the most competitive, its geographical
closeness to Mexico leads to distortions in the production and trade with milk. While the
United States advocates trade liberalization, its dairy sector is one of the most regulated and
protected in the world (Jachnick 2006). In contrast, in Mexico, dairy policies have become
increasingly liberalized over the last decades and especially since Mexico became a member
of the NAFTA (North America Free Trade Agreement).
During the last 500 years, the origins and the orientation of policies were responsible for
the promotion of Mexican cattle production in different ways. From the point of view of
“orientation”, the arrival of the Spaniards with their cattle to America and the implementation
of colonial policies were oriented to the specific transformation of indigenous people and their
territories. From the perspective of their “origin”, the policies have not only been applied by
the State, but also by other social agents from the private sector, many of which - for example
transnational enterprises such as Nestlé, Danone, Yakult, as well as national firms like Lala
and Alpura - have promoted and developed a dairy model through their own policies.

57
 The purpose of this article is to identify the principal periods and policies in which dairy
activities were established and developed in Mexico. This will shed light on the current
conditions under which Mexican dairying is inserted in a global business. The present text
highlights mainly two of the periods named above. It starts with an opening section that deals
with the introduction of cattle, an important Spanish activity to Mesoamerica that became
integrated by diverse indigenous cultures. The following section highlights the establishment
and development of the dairy sector since the end of the Mexican Revolution, and discusses
the political, social and economic models starting from the emerging livestock production
systems and that eventually led to the current structure of the sector. In the last section the
impact of technology in terms of transport and refrigeration and other current issues will be
discussed.

The introduction of livestock in Mexico

The introduction of domesticated animals to Mexico, took place with the arrival of Spaniards
in 1519. In the pre-Hispanic world the vast majority of the population consumed animal
protein provided by the wild fauna and composed by mainly fish, turtles and other water
animals. The wealthier stratum of the population also had access to turkeys and dogs
(Xoloexcuintle).
Livestock played an essential role in the Spanish Conquest (1519-1521) from two
perspectives. The first was to provide different services/products to the “peninsular”:
1. Food, especially meat and milk, provided by large (cows) and small (sheep and goats)
ruminants. The milk was mainly used to manufacture cheese as the conservation of
dairy products was limited by their own perishability.
2. Clothing. For examples skins that were worn especially in extremely cold
temperatures and when working in water.
3. Furniture: especially the so called “equipales” (armchairs made with wood and whose
seat and back were of leather).
4. Traction. Mules were for the preparation of the land, which radically modified the
productivity of the crops.
5. Transport. The horse, the donkey, and the mule, offered an alternative to quickly
mobilize people in a territory with a very complicated terrain, but also to transport the
small volumes of high value cargo that arrived by sea.
6. Lighting. The livestock provided animal fat, a material used to manufacture candles.
Cows’ fat was especially suitable for that purpose. The candles were used to light up
the mines. The fat from goats was used to light up houses and churches.
7. Mining. In the northern parts of the country silver mines were discovered and an
intensive exploitation started. Livestock provided leather pouches for the transport of
the minerals mixed with mud and the transports were carried out by the animals.

The second perspective was to establish a domain over the conquered economic territory
(Morrisey, 1951). When the Spanish navy arrived it was composed by 900 men. They
suppressed the population of 11 million inhabitants not only by defeating them militarily, but
also by building economic relations that depended on the colonial political and economic
system.
Livestock operation was an activity that could be carried out with less use of physical
labour and that occupied large areas of the territory. The abundance of territory natural food
fueled a fast growth of the livestock population (Simpson, 1952). Between 1550 and 1620, the
ovine population grew from 600,000 to 8 million heads. In this way “haciendas” started to
take shape (Dussemberry, 1963). These agricultural units of great dimensions were very
productive. One important colonial institution, the “encomienda”, also made the owners or

58
possessors of the haciendas to the owners of the land and its natural resources, and also the
native people living within its boundaries. Only the Spanish were allowed these privileges
(Gunder Frank, 1982).
Among the locals, the only people allowed by the colonial rule to own animals were the
“cacique’s”, who were rich and economically powerful indigenous persons. But they were
only allowed to own small animals, such as sheep, goats, pigs and turkeys. The Spaniards and
their children were the only people allowed to own large animals (Butzer, 1988).
This phenomenon led to a large concentration of the best agricultural land in terms of
quality and slopes/gradients in the hand of Spaniards. The indigenous villages were relegated
to land of inferior agricultural quality, like for example the tropical jungle and high
mountainous areas.39

From Post-independence until today

It is convenient to point out that only a small portion of the national territory is arable. At the
present time the total area of the country amounts to 2 million square kilometers, but only
between 15 and 18 percent is destined for agriculture; the rest is used for livestock and
forestry.
This can partly explain the great competition over land that has taken place between
different social groups over the course of history. Some of these are the War of Independence
in 1810, the Mexican Revolution in 1910, the wars against the United States and France and
the Reform movement in the 19th century. All of these imposed an important obstacle against
the development and modernization of agriculture.
The reorganization and restructuration of the agricultural sector and fisheries started first
after the Mexican Revolution, during the administration of President Cardenas (1934-1940).
A new form of land tenure called “ejido” was established. An “ejido” is an individual or
collective right to use a parcel of land designated and owned by the state with cultivation and
United States rights. The ejidatario normally has the right to use their land indefinitely as
long as they don’t cease to use the land for a consecutive period of two years. The “ejido” can
be passed from generation to generation, but it cannot be sold. The “ejido” as an institution
was important for the emergence of peasant agriculture.
By the same period, the advent of the 2nd World War with the participation of the United
Stated in this war provided the opportunity for Mexico to participate in the exports of food
and raw materials to the North American market. In addition, the emergence of urban areas
namely of three cities: Mexico City, Guadalajara and Monterrey opened up new markets for
Mexican agriculture. The two events led to the constitution of a new Mexican working class
and middle class with the corresponding increase in the demand for food that was accentuated
even more by the increase in rural to urban migration. The agricultural and fishery sector was
therefore encouraged to embark in a process of modernization that eventually paved the way
for the establishment of intensive livestock systems.
North American farmers started to implement an intensive production model. This model
arose as an alternative to the model of the extensive production of meat promoted by Great
Britain outside its borders in Australia, New Zealand, Uruguay, and Argentina. In the British
model, the land was not regarded as a limitation for livestock production. In the United States,
in spite of its enormous territory, land was regarded as a scarce resource. This was the start of

39
This explains why indigenous villages even today are found in the southeast of the country.

59
a transition from an economic model that was based on land rents to another that was based
on the profits from livestock activities. This shift was caused increased investments.

60
61
The segment of Mexican farms that became incorporated into this model, were mainly located
in the northern frontier provinces of Durango, Coahuila and Chihuahua, as well as in the
central parts of the country. It is important to point out that only large scale producers were
able to become part of the new model. Small scale and medium sized farms continued to carry
on their activities with rudimentary technologies, which led to the emergence of four
completely different dairy chains, with different technological characteristics. There are the
intensive system; the semi intensive system; the mixed/double purpose system, (beef-dairy);
and finally the peasant family system (see Table 1). All systems produce raw milk for
processing industries, but the destination in terms of final products varies depending on the
origins of the milk. For example, the intensive and semi-intensive production systems satisfy
the demand for fluid milk and the surplus is destined to the elaboration of cheese, yoghurt,
infant formulas and other dairy products. The production of the mixed double purpose system
is destined for the feeding of calves and the surplus goes to cheese production. The milk
produced by peasant agriculture – because of its quality variations and low yields - is
collected in community cooling tanks and used to for milk powder or cheese production40
(McDonald, 2000). Peasants normally get a very low price for their milk in comparison to
intensive and semi-intensive farms.

Politic, economic and social models

The ideological orientation of policy has been of great influence over the dairy sector. In
contemporary Mexico, two main influences can be found. One is characterized by a
nationalistic focus and seeks to give preference to Mexican products over foreign ones,
despite the existence of marked productive inefficiency. Another, the so called neoliberal
seeks to open borders and make import barriers more flexible in order to benefit the consumer
by lower prices. A criticism against this orientation is that it implies reducing sources of local
employment and increasing the dependency on imported food. The negative consequences
involved with this model became very clear in 2007, when world market prices for milk and
dairy products increased dramatically due to increase demand for milk in China (Dobson,
2008) and draught in Australia because of total farm and fisheries production declined by 11
per cent to 30.2 billion in 2006-2007 (ABARE, 2008).
The Mexican political economy is currently immersed in a model denominated as “growth
stabilizing”. This is the result of a combination of many different sets of policies over time
influenced by the ideological orientations mentioned above. The first of those was the “Import
substitution industrialization” model (ISI), implemented between 50’s to 70’s41. By not
allowing imports, the lack of competition erased incentives towards technological
development and increased productivity. This resulted in very expensive and technically
backward products that lacked the capacity to compete with products from other countries. In

40
The genetics of holstein cattle, the feeding system and the cool chain enables the intensive system to maintain homogeneity
in the milk quality, its chemical (proteins, fat and carbohydrates) and biological composition, that are reflected in a process of
delayed acidification. It is not the same with the more extensive exploitation models, in which the lack of refrigeration and
heterogenous composition of the raw milk leads to a fast acidification. Therefore this milk is mostly used for artisan cheeses
and sweets.
41
ISI (Import substitution industrialization) is a development strategy for underdeveloped economies that aims to achieve
industrialization by heavily increasing domestic investments in the industrial sector, often with state finance and preferential
loans in combination with a high level of trade tariffs and barriers. The strategy also included far reaching regulations of
domestic prices, especially of food, that were aimed to secure low prices and therefore also low salaries for industrial labour.
In Mexico the strategy was implemented during the post war period and until the 1980’s when Mexico was incorporated in
the sphere of the GATT.

62
some cases, this favoured the emergence of black markets for different products42. Even
though the model is not implemented today, some remnants of this model still influence the
dairy sector.
From the middle of the 1980´s, the Mexican economy has progressively opened up to
foreign markets. This was a rupture from the previous ISI-model. Some of the actions put into
effect were a liberalization of markets, a deregulation of commercial order, privatization of
public companies, deregulation efforts of food and agriculture and the reduction of structural
restrictions in the economy (OCDE, 1997). One important reason behind this shift was the
decision on joining the GATT in 1986. This action laid the foundation to initiate the shift
towards a neoliberal/free market national project. One of the first measures concerning milk
and dairy products was to establish a free trade agreement with the United States and Canada,
but the agreement was only achieved between the United States and Mexico, since Canada
still considers the domestic dairy sector as a national priority. An important purpose of
Canada’s agriculture policy is to protect the dairy sector from a competition on unequal terms
with one of the most consolidated sectors in the world (Loyns, et. al, 1996).
The free trade agreement has had a great impact on the Mexican market. In the case of
fluid milk, Mexican companies have consolidated their presence. In 2010 Mexicans consumed
10,1 million liters and between 12 and 18 percent was imported. The two largest companies
like Lala y Alpura have together 70% of the market shares. The remaining 30 percent is
composed by small and regional companies, for example organic milk companies like El
Rancho, Biorganic, and Pradera Verde and regional companies like Sello Rojo and Chilchota.
Imported milk, for example Nonfat Dry Milk is destined for social programs that target
children in low income families.
Mexico has a long standing tradition of cheese consumption and therefore a high demand.
Cheese imports therefore continue to increase and come mainly from New Zealand, Australia,
Chile, and Argentina (BANCOMEXT, 2009).
The sector is generally characterized by a high degree of concentration. In the case of fluid
milk, two companies, Lala and Alpura, control more than 70% of the market the level of
concentration is also high in the market for condensed milk. However, in the cheese and
yoghurt markets concentration is not so extreme.
Both producers as well as consumers are influenced by policies through the prices.
Producers have received support through import restrictions and imports tariffs on milk
powder that correspond to between 10% and 15% of the national consumption. Consumer
prices have become partly fixed by price roofs before 1992 and in several occasions in 1995.
Since 1997 consumer prices have been partly determined by the market, but are partly
distorted because of the social program managed by LICONSA (Dobson and Jesse, 2009,
Lozada et al., 2000).
In spite of the neo-liberal orientation of socio-economic policies, the Government of
Mexico still finances a number of social programs that are an inheritance from the previous
ISI policy orientation. One of these is LICONSA (Leche industrializada Conasupco S. A.), a
program that sells cheap milk to low income families and that aims to provide a half liter of
milk diary to children under 12 years, female adolescents, women between 45 and 59 years,
people with chronic illnesses, handicaps, and people older than 60 years.( Presidencia, 2010-
10-09). The Social Milk Supply Program commenced in 1944, and in 1963 the Milk
Rehydration Company CONASUPO was founded. What makes this program unique is that it
combines the support to low income consumers with support to national dairy farmers. The

42
When domestic products were protected against competition from foreign ones, incentives to improve quality and lower
prices were removed. As a consequence a demand for imported products of higher quality rose, which led to smuggling and
the emergence of a vast black market.

63
main providers to LICONSA are small scale farms even though the cost of buying from these
farms is higher than that of buying from the international spot market (Ramírez, 1997).
In 1980 there were approximately 425,000 children who benefitted from this program,
today, six million are benefitting from it (see Table 3). In 10 industrial plants, 95 million liters
of milk are processed monthly; 76% is fluid milk and the rest is transformed into milk powder
and distributed in rural areas. It must be mentioned that to be able to purchase from the
program beneficiaries must apply and prove that they meet the requirements of the program.
The milk is sold in special stores and beneficiaries must identify themselves. The consumer
price was $4.00 per liter in 2011,43 compared to the normal market price that ascends to
$12.00 per liter.44

Table 3. LICONSA beneficiaries 2009

6’002,863
Beneficiaries
Children under 12 years old 3’807,042
Girls until 15 years old 383,247
Chronically sick or handicapped 243,504
Breast feeding women 56,869
Women aged 45-59 533,180
Adults over 60 981,352
Number of families 2’981,667
Towns attended to 1,860 de 2,445
Number of dairies 9,573
Milk distributed monthly 83’798,740 Lts
Average daily distribution 3’351,866 Lts
Average provision per beneficiary 0.558 Lts
Source: LICONSA, 2009

Livestock policies
Economic liberalization in combination with the financial crisis experienced by Mexico after
198245 led to a sharp decrease of milk production which led to severe problems to meet the
demand for milk. This problem was addressed by the state through the initiation of the
Transition Program to Become Self Sufficient in Milk (TPBSSM). This program comprised
for example increased finance possibilities to the industry and finance to farms with the
purpose of increasing and improving the national herd. One of the features of these farm
credits was that a part of the loans was paid back in milk. These actions contributed to an
increase of total production with 28.4% from 5,700 million liters in 1989 to 7,320 in 1994.
From 1995 to 2010 production increased from 7,398 million liters to 10,592 million liters,
more than 43% (see Table 24, SAGARPA-SIAP, 2009 and 2010). The production increase
rate was above the increase in population (García, et. al, 2005).

43
$0.30/lt USD, (Secretaría de Economía, Sistema Nacional de Información e Integración de Mercados) March 5th, 2011.
44
$1.00/lt USD, (Secretaría de Economía, Sistema Nacional de Información e Integración de Mercados). March 5th, 2011.
45
In the early 1980’s president López Portillo confiscated the bank sector because of the instability caused by the financial
speculation of private banks. The Mexican economy was then heavily dependent on oil exports and many investors (domestic
and foreign) exchanged all their earnings into foreign currencies, which led to a vast monetary instability.

64
Chart 1. Total production of cow milk (x1000 MT)

Total milk production (x 1000 MT)

12000000

10000000

8000000

6000000

4000000

2000000

0
1997

2010
1989
1990
1991
1992
1993
1994
1995
1996

1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Source: SIAP (Agrofood and Fishery Information Service), in Boletín de Leche de Bovino, December
2010.

However, the program did not erase all asymmetries of the milk sytems (specialized, double
purpose and family). Therefore, before the liberalization and opening of the economy —
marked by the GATT membership in 1986 and the signing of the NAFTA (North American
Free Trade Ageement) in 1994, serious modifications and technical upgrading of the sector
were carried out. To achieve these specific goals, the dairy policy was redefined through
Rural Alliance (Alianza para el Campo) and TPBSSM (mentioned above). Among the
relevant actions a clear and permanent price policy stood out. This was intended as a form of
protection against the presence of unfair policies from international corporations expressed
through the implementation of import substitution policies. The goal was to reduce imports
from 35 to 11 percent through the increases in national production by an annual rate of 10%.
This goal was never achieved (Chauvet, 1999).
The Rural Alliance Program was responsible for the mediation of up to 50% of the
economic resources aimed for the modernization of farms, their productive infrastructure,
improvements of, or increased production of fodder and increase inventories.

Resources were mediated through three sub programs:

The Milk Program. The objective was to increase the amount of milk through
technical modernization. The support consisted of construction material, the
acquisition of specialized equipment, the improvement of basic infrastructure
and milk collection centers.

The Program for Establishment of Pastures. The objective was to increase

fodder availability. Seeds and other inputs were acquired for the establishment
and rehabilitation grasslands and rangelands and pastures, installation and
improvement of fences, pumps, feed and drink lots

Program for Livestock Improvement. The objective was to increase the

production per animal through genetic improvements through the promotion of
artificial insemination.

65
It is important to mention that Mexico has been a large importer of Holstein cows from the
United States and Canada. This has been done regularly and above all to supply the needs of
intensive production systems in order to replace livestock and broaden the productive base.
The policies for the breeding centers have not been efficient because the production of
livestock in Mexico is still much lower than the demand (Saucedo, 1984).

Technology elements in dairy production and trade

Transport
As was previously expressed, the expansion and geographical dispersion of livestock
complemented the population policy that permitted the colonization of conquered territory
during the Spanish colonization of Mexico. This economic logic led to the generation of local
systems of food provision and production that eventually paved the way for the emergence of
what we today would denominate as “clusters”. The landlords of that time took advantage of
the abundant resources in terms of land, water and pastures, through the extraction of the
livestock rent in order to acquire relevant social and economic positions. Since the systems of
food provision and production were strictly local, the articulation of those systems caused
restrictions that for example limited consumption to the nearest surrounding areas. A transport
system that could carry large volumes of merchandise was impossible because of the natural
geographical features of the land. The rivers are shallow and very limited in terms of their
lack of extension. Food crisis’ were recurrent and caused by scarcity, droughts or heavy
rains. A strategy to cope food crisis’ was the development of preventive warehousing, the
“alhóndiga”,46 another was population mobility.
In the case of dairy products, the perish ability of the products, impeded their
commercialization over long distances. Therefore dairy products were consumed locally and
mainly in the form of cheese. In large cities like Mexico City, stables were established around
the city to satisfy the growing urban demand. The expansion of a peri-urban dairy production
can be directly derived to the invention of pasteurization. Pasteur discovered the milk
fermentation process in 1857. At that time, milk was not extensively consumed – this was true
also for infants. When there was a need to complement the mother’s breast feeding, wet-
nurses were engaged for that activity. It was only in very special cases that infants were fed
with goat, bovine or ovine milk. One important reason was that animal milk could lead to
lethal illnesses, for example diarrheas, tuberculosis, brucellosis (DuPuis, 2002).
At the beginning of the 20th century after the social movement of the revolution,–people
getting ill, but I mean the peace after the civil war let purchase food for the people without
problem- legislation was passed for the commercialization of milk in Mexico City. Cooling
techniques were still inexistent and the high temperatures that are a natural part of the
Mexican climate impeded the access to milk with acceptable sanitary conditions and of good
quality for longs periods of time. This is why the milk retailers law was passed.
Dairy farms were located near urban areas and as these latter grew in size distribution
centers arose. At the same time quality and food safety standards were developed to guarantee
consumer safety (LICONSA, 1987).
The general scenario made milk production an activity of limited dimensions and it did not
have mercantile characteristics until the middle of the 20th century. During the 1950’s the
milk market started to become more dynamic, but still the previous production model
persisted and was frequent until the 1970´s. A familiar feature of the old system was made up
by the milk salesmen that sold milk from door to door. In the majority of the cases, these

46
“Alhóndiga” was a building to store and trade grains; its objective was to supply to the people in scarcity times

66
salesmen were also the livestock ranchers. Due to – above all - the environmental
contamination that the old system caused, the federal government promoted a program of
relocation of these dairy farms to the neighboring state of Hidalgo. The products
commercialized were pasteurized milk bottled or in carton, as well as cheese, cream and
yoghurt. This system disappeared gradually, even though some remnants were still visible
during the 1990s (Velazco, 1995). One important cause behind its final displacement was that
long life milk, treated with ultra-high temperature (UHT)47 became more popular. UHT milk
can be preserved for longer periods of time without refrigeration, people could therefore buy
as many liters as they wished and save time. In addition, the sales of UHT milk in
supermarkets or stores that lacked refrigerator increased the frequency of spot offers.

Refrigeration
Four events that took place during the 19th century created conditions for the emergence of a
massive market for milk and other dairy products during the following century. The first was
the development of the compression by Jacob Perkins which later would permit the
establishment of refrigeration. The second was the discovery of milk fermentation by Luis
Pasteur in 1857. Pasteurization as a process in the elaboration of milk did not begin until
1905. The third was the canning process of condensed milk invented by Gail Borden in 1850
which was an important element in the supply of food to soldier during the1st World War.
Finally in 1886, Tatcher developed the glass bottle for milk which prevented its
contamination (Dupuis, 2002). However in Mexico, the refrigeration system at the beginning
of the 20th century still consisted of ice boxes (hieleras). And the general purchasing power of
the urban middle and working classes was not sufficient to generate a demand for
refrigerators. It was only recently that this technology became more affordable and could be
demanded widely. Even though in the social supply programs the main item is milk powder,
because the refrigerator is still a domestic appliance out of reach for the low income segment
of the population. It was therefore the incorporation of UHT technology into milk processing
that caused and increment of the consumption of milk in a big way (see Chart 1).

Livestock policies and technologies

In order to identify technological policies, it is necessary to place these within an analytical
framework. Animal production in general and dairy production in particular, functions – from
a technological point of view - departing from six basic concepts: genetics, reproduction,
nutrition, management, health and economy.
The knowledge about genetics applied to animal production was widened during the
1940’s with the discovery of the double Helix of DNA by Watson and Crick. This knowledge
has been used during the last two decades to develop products and methods like cloning, the
increase in yield and the management/handling of illness in livestock. The application of
genetics in animal production has had an immediate response by end users, especially since
they lead to increased productivity and diminishing costs (Montaldo, et. al, 2009).
The above mentioned has gone hand in hand with the development of reproductive
management. At the present time, artificial insemination techniques have enabled the
reproductions of animals that showed high productive capacity. For example, males that
transmit high yields can still continue to be used for insemination long after they died. An

47
Ultra High Temperature (UHT) processing, is the sterilization of milk to the complete elimination of all microorganisms
before packing using temperatures exceedin 135° C for an extremely short period of 1-2 seconds. Therefore its long shelf life
is more than 6 months (University of Guelph, 2008)

67
example is the Canadian Holstein breeding bull “Starbuck”, who is the father of 200,000 cows
around the world (CIAQ, 2009).48
In the middle of the 1960’s, the National Institute of Artificial Insemination and Animal
Reproduction (INIARA) was established under the Ministry of Agriculture and Livestock.
The objective of INIARA was to provide genetic material for the national livestock sector.
For this purpose, breeding bulls were held from which semen was obtained. The semen was
offered to farmers at low prices through a network of semen banks placed throughout the
country. But, by the year 2000 only 4.3% of the livestock population had been inseminated,
therefore the insemination program was terminated. Today farmers are dependent on
commercial companies that sell foreign semen to satisfy their demand (Trejo, et. al, 2003).
The nutritional aspect has not been directly addressed by the government policies. It is
known that more than 60% of the production cost corresponds to feed. In order to cut down
feed costs, local universities have conducted research to find alternative sources from the
local environment. The universities have therefore indirectly, through their applied research,
influenced public and private policies in the livestock sector.
The complex and integrated aspects of livestock production have recently been highlighted
through technology transfer policies that led to the creation of Livestock Groups for the
Validation and Transfer of Technology. These groups are composed by an assessor and a
number of beneficiaries that together work with customized solutions to improve the
technological and financial skills of farmers. These groups started after the conduction of a
study that assessed the productive, technical, social, economic, and ecologic situation of the
sector. The study defined a technological package that aims to improve livestock
management, as well as to implement a set of technologies. Their mission also includes
monitoring the implementation of the technological package over time.
The package is implemented in several stages. During the first stage an assessor is
appointed to evaluate and lead the group. The assessor determines about the evaluation of
productive and economic records, sets the calendar for technical activities (concerning the
animals, infrastructure and equipment resources) and is responsible for training activities
during the project.
The beneficiaries receive intensive training in the use of new technologies or practices.
Their productive and economic information is jointly analyzed by the assessor and the
beneficiaries. In this way individual learning is supported. The implementation of the
technology package is based on each individual reality in order to maximize outcomes
(Moreno, 2006). The assessor supervises the beneficiaries until the group is consolidated
through the implementation of the selected technologies.
When the technological phase has been completed, the next step is to consider alternative
options for the commercialization and creation of value added for the farmers. Additional
investments to improve productivity on individual farms are also considered and the farmers
get help to access state credits or other public financial resources that are available for this
purpose.
An additional policy that addresses the improvement of animal health led to the creation of
National Technical Consultative Council for Animal Health in 1991. This council studies
livestock illnesses and their economic impact. It is a consulting organ of the Ministry of
Agriculture, Livestock, Rural Development, Fisheries, and Food (SAGARPA), on the subject
of animal health and works with the identification, planning, programming, operation,
monitoring, control, and evaluation of the animal health programs in Mexico. The council
also promotes cooperation and strengthening of relations between the industry, academia,
farmers’ organizations, expert organizations and the government.

48
Starbuck produced 685000 doses of semen. These were distributed in 45 countries.

68
 Finally, the economic aspects have been addressed through all programs and financial
support mentioned above. The state has used large scale and intensive production units as
their point of reference when loans and financial packages have been decided on. Over time,
farmers have been able to take advantage from the opportunities made available by the Trust
Fund for Rural Development (FIRA), established by the Federal Government already in 1954.
FIRA is a development bank that offers credit and guarantees, training, technical assistance
and technology-transfer support for agriculture, livestock, fisheries, forestry and agribusiness
sectors in Mexico (FIRA, 2009).

Concluding remarks
500 years have passed since livestock was first introduced to Mexico. After some centuries of
rapid expansion the growth rate of the sector was slowed down during the 19th Century. Since
then, and especially during the 20th Century, the geographical proximity to the United States
made a great impact on the sector. During the last decades this was translated into the
incorporation of an intensive production system. The latter was supported by a number of
factors, such as private and public policies, economic growth models and globalization.
Today the Mexican dairy sector experiences a peculiar situation. On the one hand, the
productive and technological competition causes a dependency on imports and on the other
hand there are some distortions that lead to the protection of some products from foreign
competition. An important final reflection is that over the course of history state policies have
been decisive for the articulation and development of dairy production.

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Martínez, E., Alvarez, A., García, L.A. and Del Valle, M.C., Dinámica del sistema lechero
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Dobson, W. D. (2008), The Future Rol of the U.S. in World Dairy Markets, Discussion Paper
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Paper. No 2009-2, Babcock Institute for International Dairy Research and Development,
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DuPuis, M. E. (2002), Nature’s Perfect Food. How Milk Became America’s Drinks, New
York University Press, New York.
Dussemberry, W. H. (1963), The Mexican Mesta; the Administration of Ranching in Colonial
Mexico, University of Illinois Press, Urbana.
FAO (2010), FAO Statistical Yearbook. México Country Profile. Rome.
Felix, D. (1987), Sustitución de importaciones e industrialización tardía: comparación entre
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FIRA (2009), http://www.fira.gob.mx/irj/portal/anonymous, Consulted November 15th, 2009.
García Hernandez, L.A., Aguilar, A., Luévano, A., and Cabral, A. (2005), La globalización
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Gunder Frank, A. (1982), La agricultura mexicana: transformación del modo de producción
(1521-1630), Ediciones ERA, México.
Liconsa (1987), La historia del abasto social de leche en México, LICONSA, México.
Liconsa, http://www.liconsa.gob.mx/liconsa/, Consulted November 23rd, 2009.
Lozada, H., Bennett, R., Cortés, J., Vieyra, J. and Soriano, R. (2000), The Historical
Development of the México Supply System: Local and Global Contradictions, Habitat
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Loyns, R.M.A., Meilke, K. and Kuntson, R.D. (1996), Understanding Canada/ United States
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Montaldo, H.H., Núñez-Soto, S., Ruíz-López, F. and Castillo, H. (2009), Selection response
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entre productores GGAVATT y productores no GGAVATT en la comunidad de Dolores
del municipio de Maravatío, Michoacán”, Master Degree Thesis, Universidad Nacional
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interrelaciones, UAM-Xochimilco and UNAM, p. 349-360.
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University of Guelph (2008), Department of Dairy Science and Technology, “UHT
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72
4. A Community Resting on Butter: Agricultural Cooperatives
in Estonia in the Beginning of the 20th Century

Johan Eellend

At the turn of the 20th century it was possible to read in Estonian journals and newspapers
about the founding of cooperatives in villages around the country. The reason for founding
was often stated as economic and as necessary in order to meet the demands of the modern
society. The founders were generally described as mature men acting rationally and making
the decision after a calm and fruitful discussion; and the decision was described as important
for the wellbeing of the whole community (Põllutööleht, 1907). The key points were the
responsibility shown by the men and the sense of order they imposed on the local community.
This indicates that the cooperatives did not only have an economic importance but also had an
impact on shaping the social life in the villages by implementing a set of values regarding
issues such as public behavior, decision making and responsibility.
The members of the new cooperatives did mostly belong to the large group of Estonian
farmers who recently had bought their land from the manors. Living on the relatively poor
Estonian soils they were in an urgent need to improve and specialise their agriculture in order
to get profitable agriculture. The general path for most of the farmers was a transformation
from the previous grain and flax production, where the competition from the inner Russia and
overseas was increasing, to meat and dairy production for the grooving local Riga and St.
Petersburg markets. Through the farmers needs to make joint efforts in order to jointly reach
the needed capital and knowledge for the transformation and later management and marketing
a cooperative network grew strong in Estonia during the years before World War I. This
network was to have a long lasting impact on the Estonian economy and the organisation of
the rural society.
The cooperatives and the institutions of local self-governance in the villages were some of
the few stabile organizations in the society when Estonia became independent after World
War I. Managers and instructors from the cooperative movement came to have important
positions in the political life and public administration of the Estonian republic during the
inter war period, giving the cooperative ideas and networks a strong position in formulating
and implementing politics. The position of the rural society and the cooperative movement
became represented in the Estonian parliament through the two agrarian parties, Põllummeste
kogud and Asunikude koondis of which the first built its support and organization on the
agricultural associations and cooperatives established before the war and the second on the
farmers who gained land after the war. These parties attracted almost half of the electorate
and participated in the majority of the governments, of which the majority was headed by
Põllumeeste kogud. The butter produced in the cooperatives also became an important export
product and counted for in average 25 percent of the total Estonian exports during the inter
war period. Together these conditions gave agrarian issues and standpoints a dominating
position in Estonian interwar politics and society; a position for which the agenda was sett by
the agrarian and cooperative movement in the end of the 19th and beginning of the 20th
century (Eellend, 2012; Valge, 1989:141).

73
This text addresses the founding of agricultural cooperatives in Estonia in the first decade of
the 20th century. I will investigate the ideas behind the agrarian cooperatives as well as the
pattern of cooperative founding. To that I would ad the questions of what position the
cooperative had in the local community and what kind of values and practices it implemented
in the rural society? The idea behind these questions is the notion that the founding phases of
organizations will provide certain institutional frames, and hence play a significant role for
the future development of an organization (Collier, et. al. 1991).

The emergence of rural public

At the turn of the 20th century present day Estonia was a part of the Russian Empire and
administratively divided between the province of Estland, which was mostly populated by
Estonians, and the province of Livland, where Estonians populated the northern part and
Latvians the southern. Together the population in Estonia counted about one million people of
which the majority was Estonian speaking and small portions belonged to the Russian, Baltic
German, Swedish and Jewish minorities.
From the second half of the 19th Century the Estonian society was faced with a rapid social
transformation including class formation, urbanization and upward social mobility for the
Estonians. Up to the early 19th century the Estonian speaking population had mostly been
serfs ruled by Baltic German nobility on the countryside and bourgeoisie in the towns. From
the 1860s the rural population, were given the possibility to buy land from the landlords. The
reforms were initiated by progressive Baltic German landlords who realized the need to
reform the old manorial agriculture and supported by the Russian authorities realizing the
need for an agricultural improvement in order to support its program to modernize and
industrialize the Empire. Through the land reform the land was consolidated and
approximately 75 000 new farms were established. The new farms were often established
outside the traditional villages and thus split up the established local communities, with its
hierarchy and costmary village life. The reforms and the following redirection towards small-
scale farming and cattle breeding also transformed the rural landscape. Compared with other
contemporary European land reforms the reforms in Russia’s Baltic provinces strived to
create relatively large and sustainable farms able to produce for the market, causing the
average farm to employ a family, two horses and to consist of about 30 ha of arable land.
Parallel with the reforms the land owners and tenants were also given the right to take part in
the management of the rural townships. The responsibility was limited and given under
supervision of the Russian authorities but was providing the farmers with a formal and
emotional responsibility for the local community (Kahk, 1994:337; Traat, 1968:1). Following
these processes was an emerging rural landowning middle class and, according to
contemporary observers, a sharpening social line between the landed and the landless in the
villages. In absolute terms this meant that about one third of the rural population have had the
opportunity to buy land and was self-owning, one third were tenants and one third was
landless at the eve of World war I (Seep, 1938:12, Rosenberg 1985:245, Troska 1986:69).
Another angle of the development during the 19th century was the deepening activities of
cultural and social movements with a national appeal (Laar 2005:218). The associational and
cultural life was propelled and bound together by an emerging Estonian language press and
literature. For the agrarian sector it consisted of a growing number of agricultural self-help
literature educating the farmers, and agricultural journals bringing agricultural news to the
farmers. The high rate of literacy in the Baltic areas caused the books, journals and
newspapers to be widely read. Estimations gives that more than one out of ten of the
independent farms in southern Estonia had an own journal at the turn of the 20th century, but
that they were read by more than just the subscriber (Eellend et. al, 2010:167).

74
The self-owning farmers had already learned the basics of market oriented farming from the
manors and were early to transform to money economy and on producing for the markets in
Tallinn, Riga and St. Petersburg. But through the journals the farmers where thought the skills
of modern small-scale farming and to transform their agriculture form grain growing to cattle
breeding and dairy production. To attain this transformation the villagers were encouraged to
get educated and to jointly make their efforts, gathering in agricultural associations and
agricultural cooperatives (Sirk, 1994:183). The transformation was considered as necessary if
the Estonian people were not to lag behind the other peoples of Europe (Kuum, et.al, 2002:39,
Käbin, 1933:49). Based on these advices a network of 65 independent agricultural
associations was founded by farmers in Estonia during the years between 1894 and 1905.
Together with the similar development in the Latvian speaking areas the establishment of
agricultural associations in Russian Baltic provinces outnumbered the development in the rest
of the empire. The high rate of literacy among the Estonians and Latvians made it possible for
the farmers to take the initiative to found associations and to build the associations on
common learning rather than the top down mediation of knowledge which was common in the
agricultural associations in Russia, and Polish and Ukrainian areas were a few educated local
clergymen, teachers, noblemen directed the founding and education of the associations
(Wohlfart, 2006:155, Wawrzeniuk, 2008:101).
The typical Estonian agricultural association had 100-300 members meeting annually in
schoolhouses, town houses and on open ground (Raendi a), 1973:71 and Raendi b) 1973:102).
The associations were independent from the state. But founded in a society that firmly
mistrusted every expression of public life, the associations were forced to have their statutes
approved by the authorities, to follow strict regulations working and have their minutes
audited (Walkin, 1963:127; Woodworth, 2003:62, Statutes 1896, 1897, 1898 and
Leppik,1989).
According to the statutes the Estonian agricultural associations were based on the
principles of voluntary associations and open for every one sharing its aims and ideas. The
associations mainly consisted of farmers, tenants and professional villagers interested in
agriculture matters and had no members from the landless population. During the first years
of activity representatives of the local Baltic German nobility were also common in the
associations, and the nobility often had important positions in the boards. Their presence
surely facilitated the associations contacts with the local authorities and gave the associations
access to the latest agricultural knowledge, but it also gave the nobility the possibility to
influence and control the local associations (Eellend, 2007:116). These motives for the
nobility to initiate or join educative associations were common at the time and are
recognizable in nearby Russia as well as in Sweden. However it seems as if the Estonian
farmers had relatively more to gain from the cooperation than the Russian and Swedish
farmers (Eriksson, 2008:146). The relatively peaceful cooperation between the farmers and
noblemen in the Estonian associations was based on recognition of similar interests regarding
the development of the agriculture and their relation to the landless. The cooperation also took
place during a period when the political influence of the farmers was increasing through the
national movement and their presence in the local self-governance and the influence of the
nobility was decreasing due to policies of the central state to limit the impact of what was
considered as foreign nobilities and cultures. The cooperation came to an end with the
revolution of 1905, which resulted in a tension between the nobility and farmers causing the
nobility to leave the associations (Eellend, 2007:120).
The main activities of the agricultural associations studied, such as the associations in the
villages Helme, Halliste, Koeru, Räpina, Vändra, Sangaste and Väike-Maarja, were lectures
and discussions concerning the modernization of agriculture. Most associations also arranged
annual agricultural exhibitions, displaying agricultural tools, cattle and agricultural products

75
to the audience and arranging agricultural competitions (Raendi, 1975:182; Rosenberg,
1998:171, Baltische Wochenschrift, nº. 38, 1895. Olewik, nº. 30, 1898, nº. 31, 1898, nº.
32,.1898 and nº. 24.1899, Põltsamaa Eesti Põllumeeste Seltsi poolt 1899, Jurjew/Tartu, 1899).
Lectures generally followed the path of modernization outlined by the agricultural
instructions and focused on a transition from grain growing to cattle breeding and dairy
production. In the beginning lectures were often delivered by association members; especially
board members. This encouraged the members to stand up and present their ideas publicly but
also exposed them for critique and other opinions. After the turn of the 20th century lectures
held by invited agricultural instructors, employed by the largest associations, were also
common. Together with the message presented in the agricultural journals and instructions
these lectures contributed to the creation of a standardized agenda on agricultural
improvements and modernization in the Estonian villages. But the lectures and the way
lectures and discussions were held did also contribute to the articulation of a standardized
agenda on public behavior in the associations. Formally based on a democratic ideal the
discussions were open to all members, but by looking at the remaining meeting proceedings it
becomes evident that it was mostly a small group of more active and educated members who
initiated and closed the discussions (EAA f.5219, 1902, f. 3711 1898; f 2308 1898, 1899).
Discussions were also closed with the argument that the members should follow the advices
of the educated members rather than the public opinion, and votes were often avoided with
the same argument. The democratic ideal was thus put up against an ideal of knowledge and
education. In agricultural journal articles and small notices form association meetings we can
also find complaints about the limited activity of the common members at the meetings, as
well as associations in which the active members were often used as good examples. At the
same time the journals were also clear on the prime position of education and of the educated
man as having a special responsibility in leading the discussion and mediating knowledge.
The Estonian agricultural associations reflected the emergence of a new economic
structure demanding education and specialization among the farmers. Through organizing and
educating the farmers as well as training them in the skills of associational work and public
behavior they were central in remodeling the rural public sphere. However, the associations
were generally focused on the economic development of the single farm and were seldom
active in or able to solve the practical sides of production and marketing. To work out these
problems new types of organizations were needed. In order to benefit such a transformation
the promotion of cooperatives became a frequently discussed issue in the associations at the
turn of the century. Some associations also began to jointly purchase improved seeds and
chemical fertilizers in order to demonstrate the benefits of joint efforts for the members (EAA
f5219, f3711, f2308, ERA f2848, f2848, Põllumees, 1895-1905; Uus age, 1899-1905).

Promoting a Cooperative Society

At the turn of the 20th century the liberal and nationalist newspaper Postimees (The Mailman)
in Tartu became the main promoter of cooperative ideas. At first the promotion was mostly
visionary, focusing on the cooperative principles and visions of a cooperating society. The
focus was on understanding of an ideal agrarian society based on private ownership but
organized on joint production and marketing; an understanding which could be found in many
contemporary agrarian movements in Europe. In time the newspaper also began to give
concrete advice on how to found and manage different types of cooperatives as well as
educative examples from existing cooperatives. The increasing interest in cooperatives is
illustrated by the fact that seven articles or notices on cooperation were published in the
newspaper in 1896, and forty-one in 1901 and that cooperation was stated as one of the ten
most important issues for the Estonian community in a program adopted by Postimees in 1902
(Rootslane, 1996:136, Postimees, nº. 206, 1902, Ühistegewusleht, nº. 3, 1913). The number of

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articles on cooperatives also rose in agricultural journals where “ühistegewus” (cooperation)
was introduced as a new category in the table of contents. In 1910 Põllutööleht also began to
publish a supplement on cooperation, Ühistegewusleht, (The Journal of Cooperation). The
supplement became an independent journal in the following year.
In a supplement to Postimees, published in 1899, the cooperative idea was presented
through the perspective of the changing nature of human cooperation. The problem was
presented from the evolutionistic and historical perspective previously known by farmers
through agricultural handbooks. The meaning of the words ‘cooperation’ and ‘cooperative’
were understood as the same but with the later concept being a higher form. Cooperation was
presented as a basic force in human history. Thus, the foundation of cooperatives was the
natural outcome of human cooperation, it was an unavoidable step in the creation of a modern
society. Between the lines, it was stated that the true spirit of cooperation had been lost with
the loss of power to the Baltic Germans who had corrupted cooperation into serfdom. With
the abolishment of serfdom and the emergence of a new freedom a new type of cooperation
was needed in order to create a just society (Postimees, Supplement, nº. 155, 1899). The
evolutionist approach pointed at one stage was that cooperatives were a higher form of
development, mentally, economically and technologically. In this context the development of
technology made sense only when it supported humanity (Postimees, nº. 118, 1902).
By educating and uniting the farmers, the associations had, according to the promoters of
cooperatives, pointed out the direction for future progress. Since the associations did not
demand anything from their members more than a fee they were seldom capable of putting
things into work. According to some articles in agricultural journals agricultural associations,
often lectured on land reclamation and stated the need of carrying out projects jointly, but
there were few examples of jointly managed land reclamation (Põllutööleht, nº. 37, 1909,
Ühistegewusleht, nº. 26, 1909).
Other texts referred to cooperation and mutual aid from a natural scientific or social
scientific perspective (Ühistegewusleht, nº. 26, 1909). Examples of cooperation among ants,
animals and tribal people were used to underline the natural fundament of cooperatives. The
understanding of development was most certainly inspired by Russian anarchist and
cooperative theoretician Piotr Kropotkin and on contemporary Russian evolutionists,
questioning Darwin’s individualistic approach and stressing the role of cooperation in
evolution (Todes, 1989:104-143; Kropotkin, 1902). The cooperative idea was strongly
connected to a popular vision of social and economic justice. Cooperation was seen as the
opportunity for the less well off, for the ordinary people and the small nations to obtain justice
and wealth (Verlok, 1906, Postimees, nº.118, 1902, Postimees, nº.192, 1902).
According to editorials in Põllutööleht, a technical and economic development was a
necessary precondition for creating wealth in society. But the disproportional control and
access to land, capital and information in the existing economic system had caused an unequal
distribution and only brought benefits to a minority of the population. Practical problems
related to modernization or the consequences of modernization were identified and matched
with solutions, at the same time as concern could be paid to the negative effect of
modernizations, such as an increasing individualization (Ühistegewusleht, nº. 11-12, 1911).
Moreover the focus was only put on pure economic aspects while human and natural values
were neglected. One aim of the cooperative movement was therefore to create a fair
distribution of profits in accordance to the work and assets put in production. In accordance
with the historic analogies the critique could also be understood as being in opposition to the
traditional elites, and especially the group that had introduced liberal economic practices into
Baltic agriculture. In many articles the cooperative instructor and later prominent politician in
the independent Estonian republic, Jaan Hünerson, underlined the cooperative principles for
creating equality. By comparing cooperatives, in which all members had the same share, with

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joint stock companies, where the members right to vote stood in proportion to the share of the
stock, he showed the more democratic character of cooperatives and stressed their positive
potential for helping the poor (Põllutööleht, nº. 26, 1909). He thereby underlined the
importance of the cooperative economic practice for creating a democratic culture that tied the
economic and political aspects of citizenship together.
According to the press, the work in cooperatives should not be limited to the poor, or to the
villages. In general, every-one was needed and had a natural position in the cooperative
movement even the tradesmen or landlords who previously had been considered as the
exploiters of the common villagers. In the public rhetoric, cooperatives were open for
everyone willing to work for its ideas and the former enemies should be convinced to join.
The skills of traders were, for example, often mentioned as useful for the cooperative
movement who needed to reach the market in order to sell their products (Eisenschmidt,
1912:1). In the lack of good domestic Estonian examples for promoting cooperatives, the
agricultural journals put forward examples of Danish, Finnish and German cooperatives and
the early Latvian saving and loan cooperatives (Ühistegewusleht, nº. 3, 1913). By looking at
these countries it was expected that the Estonian farmers better would understand their own
possibilities (Postimees, nº. 194,1902)
The foreign examples illustrated different aspects of the cooperative work and ideals.
Finnish examples pictured cooperative work under conditions that were familiar to the
Estonian public and illustrated that the cooperative idea was not foreign. The imagined
similarity between the countries as well as the understanding of the Finns as a “brother
people” with similar language and culture enabled Finnish examples to underline nationalist
arguments (Postimees, nº. 155, 1899, Ühistegewuskalender, Tallinn, 1914, p74,
Ühistegewuskalender, Tallinn, 1914, p. 66). Danish examples were the prime models,
illustrating the cooperative success of a small country and of small-scale farming. From an
Estonian perspective the Danish development also illustrated the rapid transformation from
relative serfdom to modernity, and the development of an organization rising from below
(Postimees, nº.192,.1902, Ühistegewusleht, nº. 8, 1910, Ühistegewusleht, nº. 6, 1912)This
made the Estonian development much closer to the Danish than the Finnish, where a central
organization Pellervo took initiative to and directed much of the local cooperative expansion
(Põllumees, nº. 54, 1904, Põllutööleht, nº. 23, 1907).The Danish example was also natural
regarding the influence of Danish agricultural instructors on Baltic and Russian agriculture at
the turn of the 20th century, especially on the cooperative production and export of butter
from West Siberia (Larsen, 2001:32). German cooperatives expressed modernity in every
aspect. Farms and dairy masters were educated in schools managed by the cooperative
movement and the dairies used the latest techniques and with the highest standards of hygiene
(Põllutööleht, nº. 7, 8, 1907, Põllutööleht, nº. 44, 1909, Põllutööleht, nº. 53, 54, 1907,
Põllutööleht, nº.14, 1907. Põllutööleht, nº. 34, 1907).
The utopia presented in the journals was a vision of a future cooperative society where
everything from production to distribution and sales would be fully organized in accordance
to cooperative principles. Goods were traded between production and consumption
cooperatives. For transportation and export railroads and steamers would be owned and
managed by transportation cooperatives in order to eliminate unnecessary costs. Painted in
bright colors, these visions ignored the inherent conflicts between producers and consumers.
Building the new society needed time and the bricks should be added with care.
Revolutionary means would destroy the positive aspects of the society. Instead the current
economic system should be slowly adapted to the needs of the agrarian society so that its
mechanisms worked for a development on the terms of the agrarian society (Eisenschmidt,
1912, Ühistegewusleht, nº. 5, 1913, Põllutööleht, nº. 26, 1909.).

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In a wider context the democratic and egalitarian base of the cooperatives would lead to
solidarity among its members and induce people to work jointly towards a common goal.
Hopes were tied to a growing movement that would create a new world (Juhanson, 1914:51).
In utopian statements from the international Cooperative Union published in Ühistegewusleht
a global nation based on solidarity was described. The aim of this vision was justice and the
fulfillment of the people’s common interests. It would guarantee peace and independence for
al nationalities and support the individual’s mental development and sense of dignity
(Ühistegewusleht, nº. 9-12, 1912.). The visionary utopian statements called for an
international cooperative solidarity and thereby, to some extent, spoke against the nationalist
approaches presented in some agricultural journals and manuals. The vision of international
cooperation and solidarity within the cooperative movement was, however, badly affected by
the tense international situation prior to the outbreak of World War I. As with the case of the
contemporary labour movement the hopes that solidarity based in common ideas and interests
would overshadow the forces of nationalism were dashed. On a more basic level the outbreak
of the war also questioned the evolutionary idea that humans had become more mature, or at
least showed that they had not reached maturity yet. Appeals from British and German central
cooperative organizations were published in Ühistegewusleht stating that they still worked for
the wellbeing of all peoples and their fundamental ideas (Ühistegewusleht, nº.1, 1914)
The contemporary Estonian scholar Mart Rootslane has claimed that there were three kinds
of arguments promoting cooperatives in Estonian press in the period from 1890s to World
War I, namely economic, national and theoretical (Rootslane, 1999:11). His categories seem
highly relevant, even though the arguments often overlapped. Widening the perspective it
becomes clear that the arguments identified by Rootslane appeared differently in different
media. Nationally oriented arguments primary appeared in Postimees and other nationalist
newspapers and journals. The prime benefits of cooperatives according to these arguments
were that they provided a base for economic development and independence versus the Baltic
Germans and the Russian authorities. The arguments were, however, not specifically directed
towards any one, and did not call for any actions against former oppressors or lords. On the
contrary, the agricultural journals called for an inclusion of every one who was willing to
cooperate and considered as important to learn from others. The agricultural journals focused
on economic and theoretical arguments, and paid an interest to the practical problems of
founding cooperatives. This makes a difference to most Central- and Southeastern European
examples where the national dimension was explicitly used to promote cooperatives, causing
the economic arguments to come in secondhand. The explanation to this is probably not that
the Estonians were more tolerant than others, but rather that the Russian censorship restricted
what was possible to publish. The result was a focus on economic arguments in a manner
similar to what was promoted in most Scandinavian agricultural journals, where cooperatives
were considered primary as a question of economic rationality and organization of production.
Consequently nationalistic arguments were toned down (Östman, 2008:162).

The Cooperative Community

Up to 1905 the cooperative form of owning and management had no support in the Russian
Empire’s legislation, and this hindered most attempts to put the ideas in practice. Existing
cooperatives were instead registered as joint ownership, and could therefore be active, but
without fulfilling many of the cooperative principles. The cooperative ideas were met with
suspicion by many of the farmers who were unwilling to put their money under common
management and who considered joint work as a loss of a newly gained freedom and a return
to forms of joint work that had been mandatory under serfdom.
However, the farmers’ urgent need for credit caused discussions on the founding of saving
and loan cooperatives in the agricultural associations. The first one was founded 1902 by a

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prominent agricultural association Tartu Eesti põllumeeste selts in Tartu. With this as a
model, savings and loan cooperatives mushroomed in the villages and made it possible for
farmers to obtain micro credits (Rootslane, 1999:62). A typical example is the village of
Helme, where 62 men established a savings and loan cooperative in 1904. Membership rose
steadily and summed up to 91 in 1905, to 174 in 1907 and to 349 in 1910. By the outbreak of
World War I, two more cooperative credit institutions had been founded in the village (Helme
Laenu ja Hoiu Ühisuse 1913, EAA, f. 3711, 1903. ERA, f. 3172, 1904, EAA, f. 3711, 1912,
ERA, f. 100, ERA, f. 148). On the national arena, the number of savings and loan
cooperatives reached 84 by 1914, with 47.365 members in a nation with about 70 000 farms
and about one million inhabitants (Ühistegeline Keskpank, 1940, p. 3).
Recommendations to saving and loan cooperatives did not directly consider ethnicity. But
the aim of building an Estonian economic force had ethnic implications and clearly excluded
cooperation with the local nobility and as far as possible with the Russian state. Theoretical
considerations and practical advise also stated that cooperatives should be open to everyone
willing to work for its ideas, and considered the cooperatives as a uniting force in society,
over ethnic boundaries.
According to the agricultural journals, rural credit cooperatives were to be based on the
same geographic delimitations as the rural townships. The idea was brought from Germany
where Raiffeisen cooperatives used the parish borders for their activities (Eesti
krediidiühistud 1940, p. 95, Ühistegewusleht nº. 6, 1912). By doing so cooperatives avoided
competition with each other, which could threaten the cooperative idea of harmony. But it
was a principle that was kept at the expense of members’ possibility to choose. The
recommendations stipulated that people were only allowed to be members of the cooperative
in their own village and never be members of more than one cooperative. The restriction of
working in a single community would ensure that loans were not given to people who would
or could not pay back. Local knowledge was also important for understanding the purpose of
the loans. Money for buying land or building houses was considered to be an issue for the
state agricultural banks. This understanding was caused by the lack of capital for larger
investments among the saving and loan cooperatives but did also restrict the services of the
cooperatives to the farmers who already had land. The idea of a purposeful loan was a central
notion for a credit cooperative. Recommendations for under which circumstances loans were
to be given were also given in the journals. These were based on the ideal type of a hard
working farmer and made moral standards and high spirits to count as much as security assets.
Thereby a man who strived in the right direction and was working hard, could be granted a
loan in spite of difficulties and economic hardship, while a lazy man or drunkard with more
resources would be denied (Ühistegewusleht, nº. 5, 1912, Ühistegewusleht, nº.11-12, 1911,
Tartu Eesti Laenu-ja Hoiu-Ühisus 1907). These recommendations should mostly be
considered as ideals and do seldom find support in the minutes of the cooperatives; bud did
despite that create an understanding of how a member was supposed to act.
The establishment of saving and loan cooperatives in Estonia was relatively late in a
European perspective where cooperative saving and loan institutions had been active since the
late 1860s. The Estonian path was similar to that of Poland and the Balkans where
cooperatives emerged only at the end of the 19th century. In the Russian provinces, such as the
Baltic and Siberia, this development was made possible through a changing attitude among
the central authorities towards organized public life and a realization that a development of
agriculture was necessary in order to obtain industrialization and considered as means to
foster economic development and lower the costs of the economic transformation.
Dairy cooperatives became the dominant form of production cooperatives on the Estonian
countryside. The expansion in the 20th century was clearly linked to the change from grain to
cattle breeding and farmers need to gain access to new markets. The first dairy cooperative

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was founded in Ilmvere 1908, and was followed by a rapid expansion in a relatively short
time. According to Anu Mai Kõll, the number of dairy cooperatives rose from one to fourteen
between 1908 and 1910, to ninety-seven in 1912 and 145 in 1914, with 47, 365 members in a
nation with about 70 000 farms (Köll, 1994:34). The exact figures are, however, hard to
estimate, even for contemporary observers, as statutes and purposes could differ
(Ühistegewusleht, nº. 2, 1915). Many associations had difficulties getting permission, and
were therefore founded on the bases of other laws or just registered as joint ownership at a
notary instead of being properly registered as cooperatives (Rootslane, 1999:60,
Uhistehewusleht, nº. 17,1909, p. 134). This opened for a grey zone of cooperative-like
economic activities (Rootslane, 1999:64). Approval of statutes was denied, also when it came
to attempts to unite cooperatives or create umbrella organizations. In accordance with the
Russification agenda, cooperatives could also be denied approval or have their statutes
changed for having words such as Eesti (Estonian) in the cooperative name or for having
Estonian as the only language of management (Ühistegewusleht, nº. 1-2, 1921).
In the south Estonian village of Helme, the founding of a dairy cooperative was discussed
in the agricultural association and then slowly put into work after 1906. According to the
dairy cooperative’s own history and the meeting proceedings of Helme Põllumeeste Selts
(Helme Farmers Association) the decision to found a cooperative came after a presentation by
August Emblik, a known agricultural instructor and cooperative promoter (EAA, f. 3711,
1911). Emblik suggested statutes and presented a plan for building a new dairy. According to
the minutes of the local agricultural association the members thoroughly discussed the plans
(EAA, f. 3711 n. 1, s. 1, 24/6, 24/7, 11/9 1911)
It is worth to note that the minutes of the agricultural association and the official history of
the cooperative, in describing the event, used the same rhetoric on thoroughly discussions as
the agricultural journals promoting the cooperatives. Funding to buy equipment and basic
capital was raised from the members and Helme Leanu- ja Hoiu Ühisus (Helme Sawing and
Loan Cooperative). During the first years the dairy was housed in a storehouse at a member’s
farm. But since the cooperative intended to produce butter for the St. Petersburg market, there
was a need to expand and improve production. The cooperative’s first major project was
therefore to build a new dairy. Emblik made plans for the new house and supervised its
construction. The required 8000 rubels came from the members and the local savings and loan
cooperative (Helme Piimaühisus, 1936). The cooperative proved to be successful and already
during its first year the dairy made a profit of 200 rubles (Helme Piimatalituse Ühisuse
aastaaruanne, 1913).
Through the founding processes, local networks of mutually dependent cooperatives,
centered on the agricultural associations, were established in the villages. They were often
organized within personal networks that extended to the institutions of local self-government.
And while the local self-government was weak or controlled by the provincial authorities, the
cooperatives were often able to support the members, improve their economy and provide an
arena for public discussions. The networks of associations and cooperatives thus created an
alternative rural public, which despite the strong Russian control of the associational life, in
much was able to act independently from the state. In many villages, like Ambla, the
agricultural association, the savings and loan cooperative, the local consumer cooperative and
the dairy cooperative held common meetings and even published a joint audit (Ambla
Põllumeeste Selts, Ambla Kaubatarwitajate Ühisus, Tapa Ühispiimatalitus , 1912)
As in Helme, the agricultural associations in the south eastern small town of Räpina
became the main arena for promoting and discussing idea of a cooperative dairy and for
recruiting its first members. Three commercial dairies were already active in region in the
beginning of the 20th century. One dairy in Toolse was managed by a farmer and a farm
master, one dairy, in Naha which also made cheese, was managed by a farmer, and one in

81
Raigla managed by a farmer and a Danish dairy master. In spite already existing competition,
the association members decided to found a cooperative in order to control their own
production an as they hoped, to increase their revenue. The cooperative statutes were written
by association members (clergyman Alexander Raudsep, teacher Hindrik Heering and a
farmer) and were adopted on June 10, 1910 by the agricultural association. The cooperative
was to be active in Räpina district with nine villages and about 130 farms able to provide the
dairy with 3500 liters milk a day. However, some large farmers in the association opposed the
idea from the beginning, claiming it would be most beneficial to sell through the commercial
traders. After getting its approval in 1912 the cooperative began its work with thirty-three
member farms and a total herd of 144 cows. The first members were recruited from the larger
farm owners. At the formal founding of the meeting in March 1912 Emblik the agrarian
instructor, representing Estonia, a newly founded central union for cooperatives, spoke about
the importance of dairy production and presented plans for a new steam powered dairy. The
first dairy was housed in a storehouse at one of the member’s farms, and a new house was
built in 1920. However, the cooperative grew fast, they employed a dairy master and brought
steam powered machines from Tartu Eesti majandus ühisusest (Tartu Estonian Housekeeping
Cooperative) in 1914, an occasion that Emblik did not miss taking part in (Viljandi
Teataja,1911, Olevik, nº. 65, 1913, Olevik, nº. 28, 1914. RKM, vol. 124). This pattern was
essentially repeated in the founding of the dairy cooperatives in Koeru, Elva and Abja-Paluoja
in 1912. All cooperatives were founded by members of the local agricultural associations
under the supervision of the instructors Emblik, Raamot or Kalmul. In Elva the instructor
even became member of the cooperative for a while to guide and make sure that things were
correctly managed (Elva Piimaühisuse tehevus, 1936, p. 4).
The cooperative in Abja-Paluoja had thirty-eight members from the beginning and the
cooperatives in Koeru and Tartu was about the same size, but the numbers soon rose. In Tartu
the number of members rose from 53 to 83 between 1912 and 1913 (ERA, f. 2070). The
cooperatives built new dairies financed by loans from the members and from cooperative
credit institutions (Abja-Paluoja piimaühisus, 1937). Koeru’s investments were slightly higher
than the other cooperatives studied and they were also able to hire a trained dairy master
earlier than the others (Koeru Piimaühing 1937). Of central importance for the founding of
cooperatives were the activities of the Agricultural associations. It was on the association
meetings that the ideas of cooperatives were promoted and it was among the associations’
members that the cooperatives found their members. Some of the work and on occasion also
the annual meetings of the associations and cooperatives were jointly held.
Agricultural instructors were a vehicle for promoting the founding of cooperatives. These
instructors were generally sons of farmers who had attended higher agricultural education
abroad, and did thus have knowledge about modern agriculture as well as about the local
conditions. By merging the cooperative ideas and principles to the circumstances in the
villages the instructors were able to give concrete advice on how and where to begin. Their
role as outsiders, but with a known reputation from the agricultural journals and founding of
other cooperatives, was probably helpful for bringing different village interests together or
overcome local conflicts. The instructors further seem to have been present in the villages
over a long time, overlooking different aspects of the founding process. Concrete advice was
given on how dairies should be built and facilitated, and on how to write statutes, manufacture
milk and handle the cashbooks (Ühistegewusleht, nº. 6, 1910). Over the years many
instructors were also called back to the dairies to give lectures and create order in the
manufacturing, management or the annual meetings of the cooperatives (Ühistegewusleht, nº.
17, 1911.). In this way the instructors embodied the ideal educated that was promoted by the
agricultural associations, and whose advice the members had to follow. Through education

82
and skills, instructors also came to represent firm structures and order in the local
cooperatives.

The Problems of Practice

During the years up to World War I many farmers were overly enthusiastic about founding
cooperatives. Probably, believing in the prosperous future promised by the agricultural
instructors and the advertisements made by producers and sellers of equipment, they made
decisions which were not always well thought through and had unrealistic expectations.
Overinvestment in over dimensioned or too complicated equipment was common. When
production began, the cooperators soon realized that they did not have the right knowledge to
manage the equipment, or enough members to supply milk for full production. Many
cooperatives therefore found themselves in a situation where they could not fulfill the
economic goals and were sometimes unable to pay their debts (Ühistegewusleht, nº. 1, 1914.
Ühistegewusleht, nº. 5, 1914). Some cooperatives, like Antsla and Vana Antsla were
established too close to each other to find enough members. This caused local competition,
which forced both dairies to close down within a year. Other cooperatives did not have
products that matched the market or were established in so remote areas that access to the
market was problematic (Ühistegewusleht, nº. 2, 1915). During the expansion period
relatively few had sufficient theoretical or practical knowledge to manage a dairy or a
cooperative (Rootslane, 1999:74). To produce butter on the farm for the local market was not
the same thing as producing it for exports. Demands on hygiene, uniformity and quality were
much higher. Some cooperatives had poor hygienic conditions and production was not
managed in accordance with the advice given in agricultural journals and instruction books.
These conditions, could risk the whole production and the reputation of the Estonian butter.
The knowledge and understanding of the necessity of bookkeeping was often insufficient,
which caused problems for the cooperative’s economy and long term planning. Incomes and
expenses were sometimes not noted in the records. The knowledge of quantities bought,
produced and sold was kept among the management as a result of the lack of control (Küüts,
1990:74). High expectations also induced managers into paying too high prices for the
members’ milk in order to make the cooperative appear as successful. Some claimed to have
produced more than what was actually sold, to make the business look better
(Ühistegewusleht, nº. 5, 1914, Ühistegewusleht, nº.1, 1914). In the journals such relations and
behavior were condemned and the guilty managers accused for being parasites on the
cooperative body and threatening the whole society (Ühistegewusleht, nº. 1, 1914).
Ühistegewusleht also expressed concern for the undemocratic climate in some of the
cooperatives. In many cooperatives the members did not feel responsible, they delivered milk
and hoped for good revenue, but did not attend meetings or control the management (Küüts,
1990:74). Unsuitable people were put in charge and managers could take advantage of the
members’ lack of interest. Concern was therefore shown over increasing attendance at
meetings. Press items described meetings that had to be cancelled, because not enough
members were present. Being a member was according to the journals an activity, which
called for both rights and obligations. Not being present could harm not only the individual
member, but also the whole cooperative as the power devolved to a little group, or the
management (Ühistegewusleht, nº. 3, 1911)
Meetings were also accused of being badly organized, and long time was spent on
discussing small items and they’re by shading the most important questions. To solve the
problem journals published articles and checklists on how to behave on meetings
(Ühistegewusleht, nº. 1, 1914). Journals also complained that meetings were too long and that
they did not focus on the right issues. As a contrast the meetings of Danish cooperatives were
described. In those meetings everything was efficient and focused and where even meetings

83
with up to thousand participants could be managed in less than a day (Ühistegewusleht, nº. 8,
1910). The concern for the democratic problems seems to be real. But the solutions, including
stricter regulations and the presence of a firm instructor, seems to have been aiming at
improved economic efficiency rather than improving the democratic culture.
According to the journals it was necessary to keep high standards in both the theoretical
aims and practical work if the cooperative model should be successful. The discussions of
problems with establishing cooperatives and the problems with mismanagement were
intended as educative examples of cooperative management. They told newly established
cooperatives that they were not the only ones having initial problems, and showed them ways
to manage their problems. Other cooperative could also learn how to foresee and avoided
problems, which had occurred in other cooperatives. By stressing the characteristics of a good
cooperative member, and put the up against the characteristics of farmers mismanaging their
positions in cooperatives. In this way the also made the cooperative movement to close ranks
against what was considered as their enemies.

Linking the Local Initiatives

The first attempt to form a central Estonian organisation for credit cooperatives was made in
1906. The initiative was taken at a nationwide consultation with representatives from different
credit cooperatives. The hope was that a central organisation would make it possible for the
cooperatives to lend to members in a more effective way, be able to give more extensive
loans. This would create greater safety for the members lending money to the cooperatives.
Statutes were formulated and sent to the authorities for approval. The statutes were, however,
rejected. The authorities explained their decision with a lack of a standard model for central
organisations (Tõnisson, 1936:85). The denial was, however, expected and the initiators had
prepared for an alternative network for distribution money between the cooperatives. Esimene
Tartu Laenu ja Hoiu Ühisus was given the position as the central coordinator. All associated
cooperatives were expected to deposit their surplus at Esimene Tartu Laenu ja Hoiu Ühisus so
that cooperatives could borrow from there. The network was initially joined by 30 saving and
loan cooperatives. Later in 1910 and 1912 the cooperatives made further attempts to form a
central union, but without success (Tõnisson, 1936:85,314).
It was then decided to formalize the already existing network. At the credited cooperative
congress in Tartu (Ühistegewuspäew) in 1913, with 32 credit cooperatives present, a mutual
agreement was made for Ajutine Raha Liikumise Keskkoraldus. Responsible for the network
was still Tartu Laenu ja Hoiu Ühis. The 43 members agreed to be annually audited by
Ühistegewuse Nõuandmise Büroo and to send copies of their account books to the central
organisation every month (Ühistegewusleht, nº. 10, 1913)
Specialized cooperatives were founded, to control the quality of products and breeds
(Ühistegewusleht, nº. 4, 1911). P. K. Estonia a central association for agricultural production
cooperatives was founded In February 1912, with 33 member cooperatives. P.K. Estonia
aimed to encourage the founding of cooperatives, give advice and inspect the quality of the
dairy production, assist the cooperatives with exports, marketing and purchases
(Põllumajanduslise keskühisuse ”Estonia”asutamise ja 15-aasta tegevuse ülevaade, 1927).
One of the prime reasons for forming a central association was to better coordinate export. It,
however, seems as if the association had unreasonably high expectations. Some members
wanted to export directly to Britain, where the prices were highest, instead of the closer and
less demanding Russian market, but they soon realized that the St. Petersburg market was
more realistic. Two persons where therefore employed in St. Petersburg. Butter for 508 000
rubels was sold in St. Petersburg through P.K. Estonia in 1914. To be able to retail goods for
the cooperatives the association needed more financial recourses than the member fees. The

84
central cooperative primarily borrowed from credit cooperatives and members
(Põllumajanduslise keskühisuse, 1927, p. 7).
In promoting exports an important function of the central association was to inspect and
guarantee the quality of the butter manufactured by the member cooperatives. P.K. Estonia
hired controllers, something that local associations also did, and in some cases separate
control associations existed for short periods. The cooperatives then took over and formalized
the function of encouraging improvement in quality, just as the medal competitions at the
agricultural exhibitions have done had before.

Conclusions
To conclude the rural cooperatives in Estonia were founded as an extension of the activities of
the agricultural association. The cooperatives can be understood as putting the aims of
agricultural improvement and transformation to cattle breeding promoted by the agricultural
associations’ into practice. The founding of cooperatives and the cooperatives work in
finance, consumption, and production, built strong networks between the agricultural
associations and cooperatives in the local community, supported by personal relations
between the members and the leadership of the cooperatives.
By demanding participation and responsibility from the members, and demanding that the
farmers putt a great portion of their production in the hands of the cooperatives, the
cooperatives hand a comprehensive impact on the farmer’s life and the local community. This
created an alternative rural public, which ideals were based in economic efficiency and
cooperation within the community. Through the work of the agricultural instructors and active
members the cooperatives provided the local community with a group of farmers with an
increasing knowledge in how to arrange public meetings, work in boards and handle
economy. Even if the group were probably small their experience of work, success and
failures were important to the building of the future community. On a general level the
cooperatives intended to organize society according to the model of the local cooperative
based community, with networks stretching through different sectors of society. Thus, even if
the cooperative movement did not clearly express aims on how to organize society, their
practical work indicated the benefit of such a model.
Membership in the cooperatives required some assets, primarily land, but also some money
to invest. The principles for giving loans generally gave possibilities to the landowning
farmers but excluded the landless. This underlined the rural stratification in landed and
landless. The cooperatives also stressed the importance of education, knowledge and
participation, even more than the agricultural associations had done. It caused future
stratification based on these criteria. The division caused by these processes was to remain
and divide the Estonian rural population even during the interwar period and was the base for
the emergence of two different agrarian parties in the Estonian parliament during the
democratic period.
Like in other predominantly agrarian countries in East- and Southeastern Europe with a
strong cooperative movement, such as Latvia, Poland, Bulgaria and Grease, the ideology and
structures of the cooperative movement in Estonian also became a tool in the hands of the
authoritarian ideologies in the backwater of the economic and political crises in the 1930s. In
Estonia an authoritarian regime, led by the head of Põllumeeste kogud, Konstantin Päts, took
power in 1934, making subordination of the cooperative movement to the state an economic
and political aim. The ideas behind this subordination were basically the same as used by the
regime in Poland after it took power in 1926 and followed anti liberal and anti-socialist ideas
outlined by many contemporary agrarian movements in Europe (Eellend, 2007:214; Lorenz,
2005:40, Bregianni, 2006). The idea of compromising between democratic values and order

85
based on education and economic efficiency, which had been an issue in the Estonian
cooperative movement since its founding then became formalized into a state policy.

References
Archive documents
EAA, Estonian Historical Archives, Tartu
EAA, f. 2308, n. 1, s. 2, 23/8, 27/9 1898, 31/1 1899
EAA f. 5219, n. 1, s. 1, 1/12 1902; s. 2, 3/5 1898, 16/8 1898;
EAA f. 3711, n. 1, s. 1 10/1, 7/2, 22/3, 1898;
EAA f. 2308, n. 1, s. 2, 23/8, 27/9 1898, 31/1 1899
EAA, f. 3711, n. 1, s. 1 10/1, 7/2, 22/3, 1898;
EAA, f. 3711 n. 1, s. 1, 1903.
EAA, f. 3711 n. 1, s. 1, 11/3 1911.
EAA, f. 3711 n. 1, s. 1, 24/6, 24/7, 11/9 1911.
EAA, f. 3711 n. 1, s. 1, 1912 29/4.
EAA, f. 5219, n. 1, s. 1, 1/12 1902; s. 2, 3/5 1898, 16/8 1898;
ERA, Estonian National Archives, Tallinn
ERA, f. 2070 n. 2, s. 2, 21.
ERA f. 2848, n. 3, s.
ERA f. 2848, n. 27 s.
ERA, f. 3172 n. 1, s. 1, 1904, n. 1-4.
ERA, f. 100, (unsorted).
ERA, f. 148, (unsorted).
Contemporary Journals
Baltische Wochenschrift, nº. 38, 1895.
Olewik, nº. 30, 25.6.1898, nº. 31, 1.8.1898, nº. 32, 8.8.1898, nº. 24, 15.6.1899
Postimees, nº. 155, 19.7.1899, Soome põllumajandusest» (The Finnish Agriculture)
Postimees, nº. 118, 31.5.1902, «Ostu-ühisused» (Purchase Cooperatives),
Postimees, nº.118, 1902, «Ostu-ühisused» (Consumption Cooperatives)
Postimees, nº.192, 30.8.1902, «Piimatalituse korraldus Daanimaal» (The Organization of
Dairies in Denmark)
Postimees, nº. 194, 2.9.1902, «Ühistegewuse algusest ja edenemisest» (The Beginning and
Development of Cooperation)
Postimees, nº. 206, 15.9.1902, “Postimehe’ juhtmõtted» (The Legends of the Mailman),
Põllumees, 1895-1905
Põllumees, nº. 54, 1904, «Pelervo»
Põllutööleht, nº. 7, 1907, «Põllumehe kiri Saksamaalt» (A Farmers Letter from Germany)
Põllutööleht, nº.14, 1907, «Põllumehe kiri Daaanimaalt» (A Farmers Letter from Denmark)
Põllutööleht, nº. 15, 1907.

86
Põllutööleht, nº. 23, 1907, «Ühistegewuse kaswamisest Soomes»
Põllutööleht, nº. 34, 1907, «Reisipildid Daanimaalt» (Travelers pictures from Denmark)
Põllutööleht, nº. 53, 54, 1907, «Saksamaa Põllutööseltsi tänawuse näituse puhul» (About the
present German Agricultural Exhibition)
Põllutööleht, nº. 26, 1909, «Ühistegewuse tähe all» (Under the Cooperative Star)
Põllutööleht, nº. 37, 1909. «Ühistegewus Eesti põllupidamises»,
Põllutööleht, nº. 44, 1909, «Saksamaa rändaw Põllutöönäitus» (The Traveling Agricultural
Exhibition in Germany)
Uus age, 1899-1905.
Ühistegewusleht, nº. 11-12, 1911, “Ühistegewuslisi laenuasutusi korraldaw rewideerimine”
(Auditing of Cooperative Sawing and Loan Associations),
Ühistegewusleht, nº. 3, 1913, «Kuidas ühistegewuse liikumine Eestis alus pandi» (How the
Foundation of the Cooperative Movement Was Laid),
Ühistegewusleht, nº. 5, 1913, Koondamine ja parema koralduse poole» (Towards Better Order
and Unity)
Ühistegewusleht, nº. 9-12, 1912, Rahwuswaheline ühistegewuse liidu ringkiri» (A Circular
form the International Cooperative Movement)
Ühistehewusleht, nº. 17,1909, p. 134, «Auru-Rehapeksu-masinate omanikude ja rehapeksu
ühisuste asutajatele» (To the owners of Stem-Engine Grain Trashing Machines and
Managers of Grain Trashing Cooperatives)
Ühistegewusleht, nº. 26, 1909, «Ühistegewuse tähe all» (Under the Cooperative Star)
Ühistegewusleht, nº. 26, 1909, «Koondamise ja parema koralduse poole» (Towards Better
Order and Unity)
Ühistegewusleht, nº.6, 1910, «Ühisuste rewideerimine» (Auditing Coopertives)
Ühistegewusleht, nº. 8, 1910, «Daani suurostu-ühisus» (The Danish Large-Consumption
Association)
Ühistegewusleht, nº. 8, 1910, «Daani suurostu-ühisus» (The Danish Large- Consumption
Cooperatives)
Ühistegewusleht, nº.3, 1911, «Võnnu põllumeeste seltsi majanduse ühisus» (The Võnnu
Farmers Economic Cooperative)
Ühistegewusleht, nº. 4, 1911, «Kontrolli-ühisuse põhjuskiri» (The Statutes of Control
Cooperatives)
Ühistegewusleht, nº. 11-12, 1911, “Ühistegewuslisi laenuasutusi korraldaw rewideerimine”
(Auditing of Cooperative Sawing and Loan Associations),.
Ühistegewusleht, nº.11-12, 1911, «Weerewad wõlad» (Weerewad’s depts)
Ühistegewusleht, nº. 17, 1911, «Neljakuulise põllutöö kursuse» (The Three Month
Agricultural Course),
Ühistegewusleht, nº. 5, 1912, «Kodumaa laenuasutused ja põllutöö ühistegewus» (The
Homelands Loan Institutions and Agricultural Cooperation)
Ühistegewusleht, nº. 6, 1912, «Mis kawakindel töö korda saata wõib» (What a purposeful
order of work can achieve)
Ühistegewusleht nº. 6, 1912, «Väikelaenuasutuste tegewuste piirkonna asjus» (About the
Areas of Activities of Small-Loan Cooperatives),
Ühistegewusleht, nº. 3, 1913, «Kuidas ühistegewuse-liikumisele Eestis alus pandi» (How the
foundation of the Cooperative Movement was laid)

87
Ühistegewusleht, nº. 10, 1913, «Eesti ühistegewuspäew Tartus 13. jaanuaril 1913» (The
Estonian Cooperative Day in Tartu January 13, 1913)
Ühistegewusleht, nº.1, 1914, Ühistegewus ja sõda» (The Cooperation and the War)
Ühistegewusleht, nº.1, 1914, «Ühispiimatalituste juhatuskirjade kavad» (The Themes of the
Instructive Letters to the Dairy Cooperatives)
Ühistegewusleht, nº.1, 1914, «Meie ühistegewuse parassidid» (Our Cooperative parasites)
Ühistegewusleht, nº. 5, 1914, «Tööstuse kontrollimisest meie ühispiimatalituses» (To Control
Our Dairies),
Ühistegewusleht, nº.2, 1915, «Kitsikus ühispiimatalituse tegemises ja abinöud selle
kõrwaldamiseks» (Greed in Cooperative Dairies and how to Avoid it)
Ühistegewusleht, nº. 1-2, 1921, «Eesti ühisusi ei salita Peeterpuri Kubernemangus» (Estonian
Cooperatives are not Accepted in the Petsrsburg region)
Other archive sources
1912. aasta ühine aruanne 3 ühistut ja 1 selts: Lehtse Laenu- ja Hoiu-Ühisus “Toetaja”,
Ambla Põllumeeste Selts, Ambla Kaubatarwitajate Ühisus, Tapa Ühispiimatalitus (The
Joint Audit of Three Cooperatives and 1 Association: Lehtse Saving and Loan
Cooperative “Toetaja”, Ambla Agricultural Association, Ambla Consumers Cooperative,
Tappa Cooperative Dairy), Tallinn, 1912.
25. Abja-Paluoja piimaühisus 1912-1937 (25 Years of Abja-Paluoja Dairy Cooperative),
Abja, 1937.
Eesti krediidiühistud I (Estonian Credit Cooperatives I), Tartu, 1940.
Elva, 25. aastat Elva Piimaühisuse tehevus, 1936.
Helme Laenu ja Hoiu Ühisuse 1913 aasta aruanne (The 1913 Audit of Helme Saving- and
Loan Association), Tõrwa, 1913.
Helme Piimaühisus 25-a. 1911-1936 (Helme Dairy Cooperatives 25 years 1911-1936),
Tallinn, 1936.
Jurjew/Tartu, 1899. Väike-Maarja Põllumeeste Seltsi poolt 1897 aasta Müürikul ärapeetava
loomade, põllu- ja käsitööde väljanäituse program (The Program of Exhibition of
Animals, Agriculture and Handicrafts Arranged by Väike-Maarja Agricultural
Associations held in Müürikula 1897),
Koeru Piimaühing 1912-1937 (Koeru Dairy Cooperatives 1912-1937), Koeru, 1937.
Põltsamaa Eesti Põllumeeste Seltsi poolt 1899. aastal 29-mal ja 30-mal mail Põlltsamaal
ärapeetava hobuste, põllu ja käsitöö väljanäituse program (The Horse- Agricultural and
Handicraft Exhibition Arranged by the Agricultural Association in Põltsamaa in May 29
and 30, 1897)
Põllumajanduslise keskühisuse ”Estonia”asutamise ja 15-aasta tegevuse ülevaade (The
Founding and 15 Years of Activities of the Agricultural Central Cooperative “Estonia”),
Tallinn, 1927.
Statutes (1896), Helme Põllumeeste Seltsi Põhjuskiri (The Statutes of Helme Agricultural
Association)
Statutes (1897a), Koeru Põllumeeste Seltsi Põhjuskiri (The Statutes of Koeru Agricultural
Association)
Statutes (1898), Räpina Põllumeeste Seltsi Põhjuskiri (The Statutes of Räpina)
Statutes (1904) Põllumeeste Seltsi [normaal-]Põhjuskiri (The Normal Statutes of Agricultural
Associations), Tartu/Jurjev, 1904.
Tartu Eesti Laenu-ja Hoiu-Ühisus: Ringkiri laenuolude korraldamise asjus (Tartu Estonian
Saving- and Loan Association: Circular About the Organization of Loans), Tartu, 1907.

88
Ühistegeline Keskpank – Eesti Rahvapank 1920-1939 (The Cooperative Central Bank –
Estonian Peoples Bank), Tallinn, 1940.
Ühistegewuskalender, Tallinn, 1914, p. 74 ff, «Meie peame ühistgelased olema!» (We must
bee Cooperative Actors!)
Ühistegewuskalender, Tallinn, 1914, p. 66 , «Kes koppikat ei kogu, see rublat ei näe» (He
Who Does Not Save a Kopek Does Not Get a Rubel)
Viljandi Teataja, 18.2.1911. Olevik, nº. 65, 28.8.1913. Olevik, nº. 28, 8.3.1914. RKM
(Collections of Räpinna Museum), vol. 124.
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 92
Photo: Photographer and year unknown, Man packing school milk at the Skånemejerier Dairy
Part III. Politics, Corporatism, Competition, Environment and
Modernity

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94
 5. Margarine – A Scapegoat Milked by Many Maids
A brief history of margarine in Sweden with an international
background

Bengt Åke Berg

Introduction
Today, most people consider margarine an ordinary commodity far removed from political
and ideological strife, and are surprised to learn that it was once a highly controversial
product. In my early studies of the history of margarine, I thought that the product’s
ideological weight was peculiar to Sweden. But a closer look at other countries revealed that
the Swedish experience was far less unique than I had expected. When some of the formative
movements of the Swedish margarine history are accounted for in this paper, they will be
compared to similar events in other countries during the same time periods.
A substitute for butter – that was the identity of margarine. Butter had for centuries been
the most common source of fat in the diets of the peoples in North-Western Europe. The
temperate and rainy climate of this region made it suited to cattle husbandry and milk
production. The milk was skimmed and the cream was churned to butter, which, after salting,
could be stored. In a world where butter had not existed, margarine would never have been
invented; it is precisely its quality as a substitute that made margarine so controversial, and
brought it into the sphere of politics. This paper will provide a concrete example of an
industry where politics and business became closely intertwined in the period of early
industrialization.

Background
In Western Europe, the population started to grow rapidly in the middle of the 19th century
and, in tandem with urbanization, it entailed a growing demand for food. As a result, larger
quantities of grain were supplied from vast sources in America and Russia, the new railways
transatlantic shipping simplifying the process so that prices decreased. But butter was
supplied domestically, or from adjacent countries like the Netherlands and Denmark, and
consequently the price increased considerably during the century. People with lower incomes
could afford butter less and less, and they had to direct their consumption towards less
expensive calories, i.e. to carbohydrates like cereals and potatoes. The high and rising cost of
fat was considered a social problem.
The growing price gap between butter and rye in Sweden is illustrated by Chart 1 below,
but the development was similar in most other European countries. There was an obvious
need for a less expensive alternative to butter and the answer to this was margarine. It was a
product that had been developed in the late 1860s by the French scientist Mège Mouriès after
an initiative supported by Napoleon III. He is said to have had two motives: one was the need
for a type of fat that was durable enough to be used in the navy; the other was to provide the
poor people in the suburbs with a cheap food to prevent them from rioting. Mouriès’ idea was
to copy the process that took place within the cow when she transformed the lard in her body
into the fat of the milk. Why not take lard from slaughtered cattle instead, mix it with

95
skimmed milk and then churn this new liquid in the same way as cream was churned to make
butter? Mouriès’ contribution was to develop such a technique to produce an artificial butter.

Chart 1. Price of butter and Rye meal 1830-1910. Index 1831-40 = 100

Butter Rye meal

220

200

180

160

140

120

100

Source: Jörberg (1971)

The new product had a limited success in the French market, probably for the simple reason
that butter consumption in France was rather limited. The first country to successfully exploit
the new idea was instead the Netherlands, soon to be followed by Norway and the US. In
Holland there was already a developed dairy industry producing butter for both domestic
consumption and export to Britain. The production of margarine increased rather quickly and
the conditions were favorable. Raw material animal fat was first supplied from slaughterers in
France, Germany and Austria. When the production increased, larger quantities of lard were
bought from meatpacking industries in the US, which could easily be received at the port of
Rotterdam. Skimmed milk was available from the local dairies. The Dutch production
supplied the nearby, large urban markets in Holland, England and the Ruhr area in Germany
with margarine. Another country with a strong early growth was Norway. Production was
established in cooperation with the French industrialist Pellerin for domestic use and for
export to Sweden and Denmark in 1876. When the German Chancellor Bismarck in 1879
introduced tariffs on both agricultural and industrial products, the two Dutch firms Jürgens
and Van den Berg that had been exporting margarine from Holland now had to move their
production for the German market to the other side of the border.
The demand for margarine developed in areas where there was a traditional consumption
of butter, i.e. areas with an established milk production. One can distinguish three groups of
countries with different levels of per capita margarine consumption:

1) Very high: Denmark and Norway

2) Medium: Sweden, Germany, the UK, Belgium and the Netherlands
3) Low: France, Italy, the US.

96
Chart 2 Per capita consumption of margarine prior to World War II (kgs per year)

Source: Schüttauf (1955)

The demand for butter was income sensitive because of its high price. Consumption differed
between families in various social groups and income strata. The Swedish pioneer
econometrician Herman Wold made some calculations in 1940 on the income elasticity (how
a change of income influences the demand for the product) and the price elasticity of butter
and margarine (how much the quantity demanded increased when the price was decreased by
one per cent) for a Royal Commission on agricultural policy. He found that butter had an
income elasticity of 0,7 and a price elasticity of 0,8 provided that a price change of butter was
followed by a similar change of the price of margarine, i.e. that the relative prices remained
stable. If, however, the price relation between butter and margarine changed so that the price
of butter increased by 1 % while that of margarine remained stable there was a decrease by
1,5 % of the quantity of butter demanded (Wold, 1940:16). It is thus clear that the relative
price was essential for the butter demand, that is,. that there was a high so-called cross price
elasticity. A closing price gap meant less demand for margarine and more for butter and, vice
versa. The American economist W.R.Pabst had made similar observations a few years before.
The picture was confirmed by investigations into how consumption was distributed among
social classes. Middle class families had a 50 % higher butter consumption than working class
families. They also bought 15 % less margarine.
Margarine as a product changed over time in regard to its taste, texture, nutritional value
and. packaging. The changes of the raw material base were even greater. In the 19th century,
the production was more or less entirely based on oil derived from beef fats, mostly supplied
from the large-scale slaughtering and meatpacking industries in the US Midwest. In the first
decades of the 20th century, vegetable oils, primarily from coconuts, but also from palm and
peanut oils, became an increasingly popular base. After WW I, the vegetable oils became the
dominant raw material, creating a better flavor and texture. Margarine became superior to
butter in its spreadability, since its hardness and softness could be varied from summer to
winter. A third era started in the middle of the 20th century, when the use of rapeseed oil
became more widespread; this, in turn, meant that a domestic vegetable raw material became
available.

97
Chart 3. Consumption of fat in working class and middle class families in the 1930s
(Kilos per year)

Margarine Butter
50
45
40
35
30
25
20
15
10
5
0
Working class Middle class

Source: Smör- och margarinkommittén

The substitute character was a permanent threat to the peaceful coexistence between butter
and margarine. There were two periods when the antagonism became particularly acute and
resulted in economic warfare, which eventually called for political interference. In the 1880s
and the early 1930s, the agricultural interests felt especially threatened by the development;
therefore, it seemed natural to focus on these two periods in particular.

Before World War I

In Sweden, the first step towards margarine legislation was taken in October 1885 at point in
time well before there was any real margarine industry there. However, imports from Norway
had begun. The government issued a Royal ordinance requiring margarine or konstgjort smör
(artificial butter) to be kept in receptacles with special labeling. The purpose was to make it
easy to distinguish margarine from butter in order to prevent fraud. A similar law had been
adopted in Denmark half a year earlier.
In 1888, Sweden changed its economic political regime from free trade to protectionism.
Prices of grain had gone down and the export of oats that had once flourished was declining.
The free trade majority in the Parliament was replaced by one that wanted to follow in
Germany’s footsteps and introduce protective tariffs for grain. Agriculture would also be
safeguarded, by restructuring production from grains towards animal husbandry. The
emerging export of butter to Britain inspired their hopes.
But when margarine from Norway started to flow into Sweden, and when permanent
domestic production was established in 1887, anxiety started to grow. It was reflected in
intense debates in the Parliament in 1888 and 1889. It was no longer just a question of
distinguishing margarine from butter; rather, the issue was to ban imports and prohibit
production. The prohibitionists argued along two lines. The first was that margarine was - or
at least could be – not only unhealthy, but even poisonous. The fat utilized could come from
animals that had died from diseases and there was even talk of the fat being extracted from the
sewage system, bringing with it poisonous bacteria. A professor wrote a booklet in which he
linked the rampant hog fever in the US to the use of margarine; while he did not assert a direct
causal relationship, the phenomena were described closely enough to one other to result in
guilt by association (Nathorst, 1888).

98
The other argument was that margarine made the sellers prone to deception. The concern was
not primarily the domestic consumers; instead, the risk that almost every prohibitionist argued
about was that margarine might be mixed into the butter that was exported to England. The
reputation of Swedish butter would then be compromised, and the very export market that was
to save Swedish agriculture would be destroyed. The arguments were pushed so hard that they
gave the impression that the destiny of the whole Swedish agriculture was at stake. It was
argued that only if margarine was made unavailable in Sweden through a prohibition of
import and production, would it be possible to convince the market in Britain that the butter
exported was not forged. The advocates for prohibition called this the clean line (Riksdagen
1888-1889).
Those who opposed such a ban had two major objections. One was that it would be in
breach with the principles of free trade that since 1840 were fundamental for the economic
policy to prohibit one industry in order to protect another. The other argument was that a ban
would cause problems for people with low incomes like workers. This was serious, since
workers had been hurt by the price increases caused by the new grain tariffs that just had been
introduced in Sweden.
Margarine, at this point in time still little known in Sweden, was presented as something
dangerous, even life-threatening. It was contrasted to butter, which, as a product based on
milk, represented the peaceful country life, motherhood and cleanliness, becoming the very
symbol of something life-giving. But the opponents refuted the sanitary arguments by saying
that there had not been one single piece of evidence of hygienic problems with margarine. All
arguments were based on unsubstantiated rumors from America. The Director General of the
Swedish Medical Board, who was a member of the First Chamber of Parliament, said that
margarine was a wholesome food. Furthermore, he dismissed any talk of risks, arguing that
margarine was no more risky than butter since tuberculosis was so frequent among the cows
that supplied the milk.
The other assertion, that the existence of margarine in Sweden would be harmful for its
butter export, was met with references to statements to the contrary from British butter and
margarine merchants. No country had been more successful in its exports of butter than
Denmark notwithstanding its own production of margarine. The opponents thus denied that
margarine would be a threat to the production of butter, at least not high quality dairy butter.
But they admitted that there might be a competition with cheap, low quality farm butter.
These arguments were repeated again and again in the extremely long parliamentary debates
in both the First and the Second Chamber in both 1888 and 1889. The group of
parliamentarians that demanded the protection of butter was not identical to the grain
protectionists. In fact, the former group was actually larger, since many of those advocating
the free trade of grain also argued that agriculture should turn to more animal production, and
consequently wanted to protect butter. The first year the parliamentary proceedings failed
since the two chambers did not reach similar decisions, but in the following year they
managed to reach a common resolution that asked the government to prohibit the import and
production of margarine. The government never implemented the decision. It was internally
divided and issued a public statement in which it stated that it could not act because of the
“mellanrikslagen”, a law that guaranteed free trade between Norway and Sweden. It would
not make sense to prohibit the production of margarine in Sweden if it would still be free to
import it from Norway.
A closer look at the arguments used in Swedish debate show that they were influenced by
two countries, the US and Denmark. In the US, legislation was introduced very early on in
the process, but began at the state level. Prior to 1880, four states had laws “to prevent
deception in the sale” of margarine. By 1886, when the first federal law was decided upon, 22
states had similar legislation, and, moreover, seven states had laws prohibiting the

99
manufacture and sale of margarine. But since the states had few or no enforcement officers,
the laws became more or less dead letters. When the federal law was introduced, it replaced
the state laws, included definitions of butter and margarine, and imposed a special tax on all
manufacturers, wholesalers, and retailers of margarine. In addition the manufacturers had to
pay tax on production of 2 cent per lb. The discussion in Canada went along similar lines as
those in the US, but the outcome there was that margarine was completely prohibited. The ban
lasted from 1886 until after World War II, with a temporary lifting of the ban in 1918-23.
Canada thus had the most restrictive policy of all countries regarding margarine (Heick,
1991).
The first country to introduce a national margarine law was Denmark in April 1885. It had
got its first margarine factory two years earlier and had a strongly growing import primarily
from Norway. At that time, the Danes generally called margarine “Norwegian butter”. The
purpose of the law was to avoid confusion between butter and margarine by prescribing that
the text “Margarine” should be stamped on the containers, which, moreover, should be of
such a shape that it differed from those used for butter. The purpose was to maintain and
enhance the reputation for high quality that Danish butter had gained in the British market.
Since the export market was more important than the home market, the Danes wanted to
avoid the mistakes the Dutch had made when they had supplied butter of inferior quality,
which had served to destroy their reputation and sales.
The new law was, however, a rush job, and it needed improvement to become more
effective. A commission was appointed to work out a more thorough proposal. When it was
presented to the Danish Parliament, there was a vehement discussion that went on for two
years before a resolution eventually could be made. Many groups and organizations were
engaged in it and the episode has been remembered in Danish history as the “butter war”.
Various arguments now appeared that later were to play a role in other countries. A majority
wanted to restrict the coloring of margarine, not only to make a clear difference to butter but
so as to make it so pale that it would become almost white and thus less attractive to the
consumers. On the other hand, it was underlined that the coloring restrictions aimed at
preventing the margarine to be exported as butter and that the consumers were free to add a
more attractive coloring at home, which was a method used in the USA. There was even a
group that proposed a mandatory coloring of blue or green to make it look off-putting. The
idea to prohibit the mixing of butter and margarine was discussed but not accepted. It was,
however, decided that a container with a mixture had to have a label where the minimum
butter percentage was indicated. In order to secure that the regulation really was obeyed a new
state authority was established with three inspectors to oversee that the law was followed.
No other country had such an ambitious legal framework as Denmark. It is, however,
important to note that the purpose was to prevent confusion, fraud or mixture in order to
safeguard the high reputation that Danish butter had gained in the British market. There was
no intention to prohibit margarine. The purpose was only to convince customers that the
utmost had been done to prevent fraud. Denmark differed from other countries in that there
were large groups of small farmers that had a positive attitude towards margarine. The
farmers sold all of their milk to the cooperative dairies that exported the butter, but at home
they spread margarine on their own bread. The world famous Danish smörrebröd (butter
bread) were thus generally made from margarine. The possibility to distinguish butter from
margarine was also the purpose of the new laws requiring various measures to prevent
“fraudulent sales” of margarine that appeared in the UK, France and Germany in 1887.
Apart from exports from Holland to England, there was little international trade in
margarine. It was generally more advantageous to import raw materials for local
manufacturing than to import the finished margarine. There were several reasons for this:
most countries had rather high tariffs, there was a lack of adequate transport facilities for such

100
a perishable product and each country had its own regulations for the product quality, package
specifications and labeling requirements.

The 1920s
After World War I there was a short period of strong and general inflation, which was
followed by a sharp drop in prices in 1920 and 1921. After that, there was no further long-
term trend for butter prices, only short-term movements because of cyclical variations. The
Swedish prices followed the British ones fairly closely, which was natural since the two
markets were integrated by the growing exports from Sweden to Britain. The Swedish
consumption of butter increased the first years after the WW I and in1921 it was far above the
pre-war levels. This can be explained by margarine production being almost nonexistent in
these years due to a lack of raw materials. However, for the rest of the decade, there was a
decreasing consumption of butter in the domestic market. This was not such a serious problem
for the dairy industry as one could have expected since it was balanced by a strong increase of
exports, from zero in 1923 to 25 000 tons in 1929, a figure that corresponded to half of the
total production of dairy butter. The dairy industry as a whole grew significantly and became
even more dependent on exports.
Margarine consumption in the early 1920s was only half of the pre-war level because of a
raw material shortage. Production capacity had, however, increased by new investments and a
very large share of it was now idle. Contrary to butter, there was a long-term downward price
trend for margarine during the whole decade. Prices were 25 % lower in 1929 than in 1922.
This steady decline of prices both absolute and relative to butter resulted in a growing
consumption. Total per capita fat consumption (butter plus margarine) increased by more than
40 % in the 1920s and the increase could wholly be ascribed to margarine. This price decrease
was not explained by a declining raw material cost, since there was no such clear downward
trend for vegetable raw materials, e.g. like copra (coco nut fat), where the average prices in
1922 were almost exactly the same as in 1929. But there was a growth in productivity; the
number of employees in the margarine industry was almost constant while the quantity
produced increased threefold. In spite of the growing market share for margarine, there were
fewer political attacks on the margarine industry than before the war. In 1929 the road
seemed paved for a peaceful coexistence between the two products. But this was to change
dramatically.

The 1930s
The great crisis of the early 1930s started as an agricultural crisis. World market prices, first
for sugar and then for grain, took a downturn in the late 1920s. The fall in butter prices started
in October 1929 and continued until May 1934 when they were 60 % lower than at the
previous peak. This was, of course, a heavy blow against the Swedish dairy industry that had
become dependent on exports. Even worse was that the quantities exported also went down,
and in fact almost halved between 1929 and 1932. This combination of a dramatic fall in both
prices and volumes had a far-reaching impact on dairy revenues and immediately lead to a
strong reduction of the incomes of the milk farmers. This was serious, since milk sales was
the most important income for most small and medium sized farmers. The crisis, however,
brought one, albeit tiny, piece of good news to dairies. Because of the declining prices, the
domestic consumption of butter increased significantly in 1930 -1932.
The crisis among the farmers called for political action. In the agricultural policy there was
a clear dividing line between on the one hand the conservatives, who saw increased tariffs as
the solution to most problems, and on the other the liberals and the socialists, who were strong
adherents of free trade and lower food prices. When the crisis started with falling grain prices,

101
the conservative government made a proposal to increase tariffs which was defeated in the
Parliament. The liberals who replaced them in Government instead proposed a policy
requiring the mills to mix in a percentage of domestic grain into the meal they produced. Such
a policy was, however, impossible for milk/butter, where there was a large surplus for
exports. The farmers’ national organization outlined an alternative system of regulation where
the sales prices of milk and butter in the home market were increased in order to finance
export subsidies for butter. Such a system, however, required an effective control of all the
milk the farmers could supply and that could only be achieved if all milk farmers joined the
milk producers’ cooperatives. Therefore, the proposal included rules that in practice meant a
forced cartelization through the mandatory enrolment of all milk farmers into cooperatives.
Within two weeks after the organization had presented its proposal to the liberal minister of
agriculture, he transmitted it without changes as his own governmental bill to the Parliament.
In June 1932 it was approved by the support of the conservatives and the Farmers’ party, but
was opposed by the Social Democrats.
A few months later there was a general election. The social democrats focused their
campaign on two issues. One was to increase employment by an expansive finance policy
with full tariff wages at the public works and the other was a free trade policy involving
agricultural products. The conservatives and the liberals suffered losses while the Farmers’
party and the Social Democrats shared in a victory. The liberal government had to resign and
the Social Democrats formed a new government, but without their own majority in the
Parliament. Therefore, they had to maintain the milk regulation that just had been decided and
had to set into effect the very system that they had just criticized.
There was, however, one serious snag. When the home market price for butter increased,
the consumer demand transferred from butter to margarine. In order to maintain the price
margin, it was necessary to raise the price of margarine as well. The Farmers’ party wanted a
special tax on margarine with that purpose in mind, and consequently proposed that the
revenues from this tax should finance the export subsidies for butter. Such a tax was of course
contrary to the principles of free trade. The Social Democrats had strongly criticized the idea
before the elections because of its adverse effects on income distribution. The tax would hit
families with low incomes and high margarine consumption i.e. exactly those who were the
least able to carry the burden.
In the spring of 1933, the Social Democrats were busy negotiating a broad political
compromise with the Farmers’ party to get a parliamentary majority for their government. To
achieve that, they were prepared to make a complete turnaround in their agricultural policy.
They now accepted even the margarine tax in return for an agreement on their financial and
labor market policy. The acceptance of the margarine tax was a major retreat for the Social
Democrats. For the Farmers’ party this was a great victory, since they could then be sure of a
parliamentary majority for the margarine tax whatever political changes there would be in the
future. The purpose of the compromise was to pave the way for a political cooperation
between the two parties for decades to come; it resulted in a historic coalition between
agriculture and labor. The margarine tax was thus the corner stone that made this delicate
construction possible. It has been argued that the agreement was essential to prevent political
right-wing extremism to develop in Sweden.
The export market for butter did not improve until in early 1934 when British butter prices
turned upward again. The prices in Sweden increased in 1933, but that was a consequence of
the regulations. Exported quantities also increased from the very low level they had fallen to
and consumed quantities of butter at home increased because of the margarine tax.
The restrictions on margarine were not confined to the excise tax. In 1932 there were new
regulations regarding the production and marketing of margarine. Production of margarine at
the same premises as butter was forbidden. It was considered essential that any association

102
with butter in the promotion of margarine should be avoided. Words like butter, cream, milk,
cow, dairy, cowshed, barn, manor or any other word that could create associations to
agriculture were prohibited in advertisements for margarine. Pictures or drawings with such
allusions were also forbidden.
There were politicians who asked for even stronger measures than taxes and marketing
regulations. The minister of agriculture appointed a Royal commission to investigate further
policies on butter and margarine. At least one of the members was a very outspoken enemy of
margarine. A number of radical measures to promote butter at the expense of margarine were
discussed, for example mandatory coloring of margarine in unpleasant shades, “voluntary”
agreements on quantitative reductions of production, and a general prohibition of sales of
margarine except to poor families who were to be awarded special ration cards. Both
mandatory mixing of butter into the margarine and a prohibition of such mixing were
discussed at the same time, but in the end the commission did not opt for any of them. Most of
the issues discussed were obviously from the list of measures that had been considered, and in
some cases also implemented, in other countries. The commission, however, noted so many
drawbacks to them that it was not prepared to recommend any of them. Instead, they proposed
that an entirely new type of low cost butter should be developed and be sold at a price
competitive with margarine. This idea was very much ridiculed by those who commented on
their proposals and eventually it came to nothing.
The only party in the parliament that wholly wanted to safeguard the margarine from
restrictive interventions was the Communist party, but it was entirely without political
influence. The margarine industry was of course embarrassed. When the board of the Pellerin
margarine company discussed the firms' annual gift to the Conservative party it was decided
that the management should have a serious discussion on the restrictive margarine policy with
the party leader admiral Lindman in person before handing over the money. There are no
reports in the minutes on the outcome of any such talks (Pellerin). The restrictive policy
limited the growth of the industry for several decades to come but the extraordinary high
profitability compared to other industries was maintained, or even increased. The margarine
industry was locked into a cage, but it was a richly gilded cage.
The agricultural crisis was worldwide. Grain farmers were protected by tariffs or other
forms of import regulations. When it came to milk and butter products, most countries with
cattle husbandry faced problems similar to those of Sweden. i.e. a need to protect the farmers’
milk incomes by protecting butter from the competition from margarine. In France, import
quotas of margarine were introduced in September 1931 and were later replaced by high
tariffs and import license fees. In Switzerland there were high import fees for butter, which
could only be imported by a state monopoly in order to keep up prices for the domestic butter.
There were also fees on consumption milk. For margarine, it was prescribed that it should
have at least 15 per cent domestic butter mixed into it.
Norway also got a law in 1931 prescribing that butter should be mixed into the margarine
and this was a system that has been characterized as a cornerstone of their agricultural policy.
In practice it enabled the government to decide both volumes and prices of butter. The
percentage was initially only 3,5% but it was gradually increased to 20% which meant that
2/3 of all butter produced in the country was used in this way and an outlet was thereby
secured at prices far above those in the world market, enabling the dairies to increase
production almost fourfold during the 1930s (Hovland 1979). This was obviously an efficient
way to protect the butter production when it, as in Norway, was confined to the home market
and the margarine consumption was high. In 1934 this policy was supplemented by a special
fee on margarine, which was used to subsidize agriculture, i.e. a system similar to the one in
Sweden.

103
 In Denmark the government was authorized to impose a fee on all butter that was sold
domestically. It could vary from at most 35 öre per kilogram when prices were low and less
when they were high. Additionally, another fee was imposed on raw materials for margarine,
which increased the production cost by approx. 25 öre per kg. The revenues from this fee
were used to support poor people to purchase margarine. In Finland the government was
authorized to stabilize the price of butter by paying an export subsidy and to introduce a tax
on raw materials used for production that competed with butter, i.e. margarine.
Germany had the most far reaching policy of all European countries. It was called the
National Fat plan and it was part of a still broader plan aiming at autarchy for the whole food
production. The policy was carried out by a new Reichsnährstand (National Board of
Nutrition) created in 1933. Two ordinances were particularly important for margarine. The
first one amended the old margarine law of 1897 and empowered the Government to prescribe
the precise use of raw materials, their amounts and sources of supply. The government also
got the right to set quotas for the production and to control, investigate and supervise the
entire activity of all margarine factories. No legislation was necessary for this since the
Parliament had been suspended and § 48 of Weimar constitution gave the Government
dictatorial power. The second ordinance came in March 1933, when the National Fat
Monopoly Administration was established. The marketing of all fats was then organized by a
cartel and all production was to be offered to that monopoly. If a certain quantity was rejected
it would not be permitted to enter the market at all. The Finance secretary got the right to
issue equalization taxes on margarine. All in all, then, this meant that the government had
complete control over the whole margarine industry.
We can thus see a great number of measures employed in the margarine policy of various
countries. One common purpose seems to be the prevention of fraud by facilitating the
discrimination between butter and margarine. In some countries, however, these ambitions
went so far that the margarine was made unpalatable with an obvious purpose to discourage
people from purchasing it. The mixing of butter into the margarine was frequently considered,
but was obviously a double-edged weapon. In some countries, moreover, it was prohibited,
since it was considered to enhance the quality image of margarine, making butter less
competitive. In other countries it was seen as a method to increase the demand for butter, and
was therefore mandatory. Special taxes or fees directly on the margarine or on its raw
materials were rather frequent in spite of the obvious negative social effects of such policies.
Sometimes, such taxes were balanced by appropriating a share of the revenues to support poor
people. Direct quantitative quotas prescribing maximum allowed production seems only to
have been employed in Germany and prohibition of all production only took place in North
America, primarily in Canada. Some consequences of the various national policies can be
illustrated by a comparison of butter and margarine prices in a few countries.

104
Chart 4. Butter and Margarine** Prices in 1938 (Swedish öre per kilo).

Butter Margarine

350

300

250

200

150

100

50

Denmark
Norway

USA
Sweden

Germany

Canada
United Kingdom

Netherlands

** Margarine prices are not available for USA, Canada and Denmark
Source: Schüttauf 1955

Butter prices were clearly higher in Germany than elsewhere in Europe (but not in the USA).
Germany was also the country with the strongest governmental interventions. (To what extent
the high price depends on the exchange rate of the nonconvertible German currency needs to
be investigated). In the UK, prices for both butter and margarine were lower than elsewhere,
which is understandable since there was less government interference there. The price of
margarine was only 38 % of that of butter. In the Netherlands, butter prices were only
marginally higher than in the UK, but margarine prices were almost twice as high as in the
UK. The butter prices in Sweden were slightly higher than in the UK and the Netherlands and
slightly lower than in Norway. The margarine prices in Sweden were higher than in the UK
and the difference corresponds almost exactly to the margarine tax. Surprisingly Sweden does
not look very different from other European countries in spite of the extraordinary political
interventions in the margarine/butter business.

Private regulation
Margarine was a fairly homogenous product and the cost structure of both production and
distribution favored high capacity utilization. Every firm had much to gain from additional
quantities and it was tempting to use price discounts to achieve this. But when everyone did
so, the result was a price war. There were strong reasons for the firms to cooperate in order to
prevent this by committing themselves to avoid undercutting each other’s prices. When the
number of participating firms were few, this could be achieved by mutual trust in an informal
oligopoly club; however, when the number was greater, it became necessary to form some
kind of institutionalized agreement, i.e. a type of cartel. The margarine industry was a rather
ideal text-book case for an industry where cartel agreements made sense to the producers.
The first production unit with industrialized methods was established in Sweden in 1888.
In the second half of the 1890s, there were four new factories established of which three were
closely linked to the Norwegian margarine industry and the forth and the biggest was owned

105
by a French company that since long had had interests in Norway, too. By the turn of the
century, the time was ripe for cartelization. It was facilitated by a fairly high tariff protection
of the home market. Import from Denmark was not feasible since the coloring of the
margarine was forbidden there, making it less appealing. Nor were the firms in Norway a
threat against the Swedish ones, since they were so closely affiliated. There were thus a
number of conditions that facilitated cooperation between the firms. The first price cartel we
know of dates back to around the year 1900. The cartels suffered frequent breakdowns after
short price wars, which were followed by a restoration of the cooperation a few months later.
The development during the first decade of the 20th century can be seen in chart five (below).

Chart 5. Monthly margarine prices 1900-1912 (in Swedish öre)

Monthly margarine prices 1901-1912 in Swedish öre

160

155

150

145

140

135

130

125

120

115
1901 1902 1903 1904 1905 1906 1907 1908 1909 1910 1911 1912

Source: Kylebäck (1974)

After World War I the producers re-established their cooperation in November 1920, but the
new cartel was soon to be challenged when the Dutch firm Van den Bergh established a
daughter company outside Stockholm in April 1921. They asked for a much larger share of
the total market than the other cartel members were prepared to give away. Vandenbergh’s
(which is what they called themselves in Sweden) tactic was to break into the market by
offering a 10 öre lower price than the cartel, regardless what it decided. Some prominent
cartel members started planning to launch exports of margarine from Sweden to the Dutch
market simply in order to retaliate. This price fight took place against the background of
rapidly decreasing raw material prices, so the price decreases that took place were actually
long overdue. Half a year later, there was yet another skirmish when the new margarine
factory of the consumer cooperatives started, reducing the available market for the cartel by
more than 20%. On the other hand, the growing demand for margarine provided some
compensation.
By 1926 the cartel firms had reached a point where they realized that better organization of
their cooperation was necessary if it were to survive at all. The eight cartel firms agreed to
form a joint sales company, which meant that each firm gave up its own sales organization.
The new company, the MFA, initially had approximately 80 % of the market outside the
consumer cooperative stores. One very important task for the MFA was to manage the
competition with the outsiders and the new entrants to the industry. In some cases it
concluded secret price agreements of non-competition agreements and in other cases it made

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secret acquisitions. In theory, this meant that the official market share of the sales company
was reduced. In reality, it maintained an almost complete control of the market. The MFA had
to be a very active guardian, since the high profitability of the margarine business was a
constant enticement to new entrants. An ordinary cartel – i.e. a legal agreement between
independent firms not to compete – would not have been able to act so efficiently.
In the early 1930s, when the butter prices started to fall, it would have been natural for the
margarine producers to respond with price decreases to maintain their share of the total fat
market; now, however, they felt the political pressure to abstain. Margarine prices therefore
remained rather stable in spite of the raw materials becoming cheaper. The result was
increasing margins. When the margarine tax was introduced, the politicians made clear to the
industry that any reductions of the margarine price that would shrink the price difference to
butter would be met by increased taxes. Unsurprisingly, the industry refrained from such price
decreases. The political control over the margarine market in the 1930s severely limited the
growth of the industry but had no negative effects on profitability. On the contrary: all
available data on profitability for this period agree that it was higher for the margarine
industry than for almost any other industry. The margarine industry passed the crisis years of
the early 1930s with an improvement instead of a deterioration of profits. Moreover, the
officially reported profits were not particularly reliable since there were many opportunities to
disguise parts of the real profits from what was stated in the official reports. One study
showed net profit margins between 15 and 20 % for the years 1929-3 for the firms Pellerin
and Zenith (Bondeson, 1988).

The challenge of retail (consumer) cooperatives

In the late 19th century a great number of local consumer cooperatives were established and
in 1899 a national union of consumer cooperatives (K.F.) was formed. It acted as a national
organization to promote cooperative ideas but also as a wholesaler that acted as a supplier to
the local cooperatives. This activity rendered an income that was partly repaid to the local
unions as an extra provision. The private retailers had also recently established a national
organization which was vehemently opposed to the sales rebate that the KF got from the
producers -- and which was partially given back to the retailing local cooperatives. This was
a benefit that the private retailers did not have. The retailers’ organization even forced the
margarine cartel to boycott sales not only to the K.F., but also to the all the local cooperative
union stores. The K.F. responded by acquiring a small margarine factory of their own, which
triggered the cartel to respond with a price war and strong price decreases. The KF skillfully
utilized these decreases in their propaganda as evidence that the cooperatives had the power to
smash cartels and reduce monopoly pricing.
This episode with the K.F. fighting the big, evil cartel was to be heavily exploited by the
KF in the following decades. They promoted the idea that the cooperatives could successfully
combat trusts and cartels by establishing their own production. The margarine industry was to
become the first example of this. During the 1910s the KF got financial resources to prepare
for their own margarine factory and in November 1921 it was ready. It was far bigger than
any of the existing margarine factories in Sweden and it became an immediate success.
Within a few months, it had taken over the margarine sales of the cooperative stores, approx.
20 % of the total. The cartel answered in its traditional way, with a price war. When the cartel
re-established in 1920 after WW I, prices had been 376 öre per kilogram and in June 1922
they had fallen down to 127 öre. Most of the decrease was explained by falling raw material
prices, but the KF was of course not late in using this as part of their propaganda. They could
once again claim that their production could break up cartels and give the consumers greater
benefits. Once the cooperative margarine had been accepted by the customers of the
cooperative stores the situation became more stable. Since the margarine from the cooperative

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factory was only sold in the cooperative stores, and since these stores almost only sold their
own brands, there was very little direct competitive confrontation between the two suppliers.
The competition that took place was between the private and cooperative stores.
After the establishment of the new factory and the initial price war the price level
reestablished and the prices of the two groups seems to have run in parallel. Both parties
appear to have accepted that there were two markets separated from one other, a sort of
duopoly without price competition. When there were price changes, one of the two parties
generally followed the other, and it is not possible to distinguish any one of them as the clear
price leader. The KF maintained somewhat lower prices during the first years, but later price
differences seem to have vanished; it is also difficult to make exact comparisons since there
was a price spread between various qualities. At the board meetings of the joint sales
company, the competition with the K.F. was seldom discussed. For the MFA the entrance of
new private competitors seemed to be a greater problem.
The cooperative margarine business was more efficient and even more profitable than the
private cartel firms. The production unit was bigger and there were clear technological scale
advantages. In addition, KF’s sales and distribution required far less resources than the
overstaffed sales organizations of the private firms. Representatives of these firms recognized
this and used it as an argument to form the joint sales company, the MFA that was established
in 1926. For the KF, the struggle against trusts and cartels was high on the rhetorical agenda
but there can be no doubt that the establishment of the KF production was a strong incentive
to a firmer cooperation between the firms in the cartel. The net effect of KF’s entrance was
therefore a reinforcing rather than a weakening or crashing of the cartel.
By far the most important step towards a world-wide private regulation of the margarine
industry was the merger of the two biggest international margarine firms in 1927, Jurgens and
Van den Bergh, both of Dutch origin. Together they got control over a substantial share of the
market in a number of countries, such as Germany, the U.K., Norway, Belgium etc. When this
new company a year later merged with the British soap firm Lever and became Unilever, the
new company got control over a substantial part of the world trade with vegetable oils.
The Swedish KF was afraid of Unilever’s strong influence and in 1930 the Norwegian
government sponsored negotiations to establish a common sales organization similar to that in
Sweden. The purpose was to eliminate all price competition and make it impossible for the
Unilever trust to increase their market shares by using price reductions. Their only possibility
of accessing the market was to buy production quotas from Norwegian firms. The issue of the
mandatory mixing of butter into the margarine came up at the same time and it meant that
import was made practically impossible; therefore, it was easily accepted by most of the
margarine firms, and was presented as a proposal that would benefit both agriculture and
industry. The contradictions between the two parties could be resolved in this way.
In December 1929, a number of independent German oil and margarine factories joined
and established an organization, Margöl, which would provide them with raw materials and
facilitate their independence from Unilever. This was a loose organization where the only
firm commitment required by the members was that they could not sell their production units
to Unilever. When then the Nazi regime came into power it was clear that the independent
German firms were prioritized when production quotas were distributed.
Denmark was one of the very few countries in which Unilever did not get a strong
position. The structure of the Danish margarine industry was very different from that of
Sweden and other countries. There were a great number of small factories quite often run in
combination with a local dairy and with only a local outlet. There was little room for Unilever
in a structure like that, which meant the firms controlled by them only held about 1/5 of the
market.

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 For the K.F. the large profits from the margarine were used to strengthen its equity fund
that was crucial for its growth and ability to invest in other industries. At the coming of World
War II the KF had developed into one of the biggest industrial conglomerates in Sweden. But
there was one firm that the KF had acquired that was not particularly profitable. It was a
vegetable oil factory in Karlshamn which the KF bought in 1931 for fear that the newly
merged Unilever company would get too tight a control over the raw materials for the
production of margarine. The capacity of this firm was far above the KF’s own needs. The
cartel firms, of which many had links with Unilever, had, however, decided to boycott KF’s
Oil factory. The manager of the KF oil factory made contact with Pellerin, one of the cartel
firms, and suggested to them that they abandon their boycott. In return, KF would cease
selling oil to the small margarine firms that competed with the MFA and was also prepared to
discuss prices more frankly with them. This initiative awoke the interest of Pellerin’s
management, but, as the CEO of KF never authorized the discussion, it came to nothing. This
was understandable, since it was against the officially declared policy of the KF.

Conclusions
Margarine was a hot political issue that apparently had the power to break up traditional
political and ideological convictions. It made liberal free traders ask for governmental
intervention and discrimination, right-wing conservatives demand harsh state regulation and
egalitarian socialists to accept highly regressive consumer taxation. Agricultural interests had
a strong influence on politics, seeking to protect butter from competition with margarine, and
the discourse focused on anything associated with cleanliness, natural life, milk and, through
that, motherhood. In the margarine industry, there were natural tendencies for private
regulation, like cartelization, and they were not prevented but rather strengthened and
facilitated by the interference of public policy. Regulation went further than in any other
industry, and it was justified by agricultural policy at the expense of consumer interests. The
margarine industry was blocked in its expansion by the political interventions, but the owners
had no reason to complain since they were left alone with handsome profits. The proceeds
from margarine taxation and monopoly prices were used to finance butter subsidies, the
capital formation of the consumer cooperatives and extraordinary dividends to the
shareholders of private firms. Margarine was also utilized by the Social Democrats to make
political compromises in order to secure a long-lasting political power. The scapegoat
margarine rewarded all parties except one: the consumers.

References
Unpublished sources
Margarinbolaget (MFA), Board Minutes, Centrum för Näringslivshistoria.
Pellerin, Board minutes, Landsarkivet i Göteborg.
Riksdagens protokoll 1888 and 1889.

Literature
Bondesson, Gustaf (1988), Aritmos, Göteborg
Brandt, Karl. (1938), The German Fat Plan and its economic Setting, Food Research Institute,
Stanford University.
Gellerman, Olle (1958), Staten och jordbruket, Stockholm.

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Heick, W.H. (1991), A propensity to Protect, Wilfrid Laurier University Press, Waterloo,
Ontario
Hovland, Edgar (1979), ”Smör og margarin blir ett fett”, Historisk Tidskrift nr 58, p 305-325
Johansson, Albin (1945), Frihetsgaranti, Stockholm.
Jörberg, Lennart (1972), A History of Prices in sweden 1732-1914. Lund.
Kylebäck, Hugo (1974), Konsumentkooperation och industrikarteller, Uddevalla.
Lublin, Jarl (1922), Margarinindustrins utveckling, (SOU 1922:40), Stockholm.
Margarineindustrin i Danmark 1883-1933. Utgivet af Otto Mönsted AS. Copenhagen. 1933.
Nathorst, Hjalmar (1888), Hvad böra vi göra rörande margarinfrågan och svinpesten?, Lund.
Pabst, W.R. (1937), Butter and Oleomargarine: An analysis of Competing Commodities,
Columbia University Press.
Påhlman, Axel (1921), Kooperatörernas margarinstrid, Stockholm.
Schüttauf, Werner (1955), Die Margarine in Deutschland und in der Welt, Margarine-Union
A.G, Hamburg.
Snoddgrass, Katherine (1930), Margarine as a Butter Substitute, Food Research Institute,
Stanford Univeersity
SOU (1934:43), Smör och margarinkommittén (1934), Avsättningen av smör och andra
fettämnen av inhemskt ursprung, Stockholm.
SOU (1940:53), Organiserad samverkan inom svenskt näringsliv,
Näringsorganisationssakkunniga, NOS, Stockholm.
Stuyvenberg, J. H. van, Ed. (1969), Margarine: an economic, social and scientific History
1869 –1969, Ailesbury.
Wilson, Charles (1954) The History of Unilever, Cassell, Vol. II, London: Cassel & Co.
Wold, H, (1940), Efterfrågan på jordbruksprodukter och dessas känslighet för pris- och
Inkomstförändringar, SOU 1940:16.

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 6. Corporatism in Action
The Swedish Dairy Regulation of 1932

Fredrik Eriksson

Introduction
As the agrarian crisis developed after the First World War, it became obvious, all across
Europe that the former systems for supporting agriculture needed to be reformed. It was
during the 1930´s that new, modern regulation systems came to restructure rural life.
Historically, the main defence for agriculture had been tariffs, which in effect let agriculture
develop within the national boundaries. The regulation systems on the other hand, were more
coercive and reshaped the face of agriculture, through channelling production and negating
normal economic patterns of development. This essay concentrates on discussing Swedish
agricultural regulations and especially the introduction of the dairy regulation in 1932. I use
the concept of corporatism and organisation from above as analytical terms.
The dairy regulation (and its forerunners) became the patented solution for combating
hardships in agriculture, and regulations have existed ever since. Therefore the introduction of
agricultural regulations was a formative stage, as there is a distinct before and an after. This
essay discusses regulations in relation to the cooperative movement, since it was the prime
organiser of the agricultural regulations in Sweden. Finally, the essay also highlights
regulations as a means to combat the growth of rural fascism in Sweden.

The Agrarian Crisis in Sweden during the 1920´s

During the 1920´s prices on agricultural products started to drop as the post-war depression
set in. The first commodities to be affected were sugar and grain, for example the prices of
grain in 1923 were half of that in 1918. The crisis as such can be described as a mist slowly
rolling across the entire field of agricultural products. First it was sugar then it was grain,
followed by dairy, meat and eggs and soon the entire market was affected. The main reasons
behind the crisis were more efficient means of production, strongly developed during the war,
and as there is a set limit for food consumption, any over-production will inevitably lead to
price fall (Myrdal, 1997:317). Production during the war had been directed towards grain (as
it was the most efficient way to feed the population), and after the war demand for grain was
plummeting. The decrease in population led to increased wages and also changed patterns of
consumption. Therefore animal products came in demand leading to lower prices on grain,
again leading to lower prices on animal feed, leading to higher production in animal products
(Morell, 2001:162-163). In the early stages of the agrarian depression, prices on animal
products did not fall as drastically as the prices on grain. But in 1929 and 1930 the prices fell
on butter, the main agricultural export in the Baltic Sea area. The price fall was linked to the
industrial depression as unemployment led to lower demands for butter in England, the
primary market for Baltic butter, in turn leading to lower world market prices (Bonow,
1935:131).
The agricultural market more or less imploded in the late 1920´s and the system of exports
and imports fluctuated. Swedish farmers had enjoyed an economically beneficial position
during the war as food prices were high, and the ability to export food to Germany existed.
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This benefit had come at a price since farmers lost their prestige and respect in the eyes of the
consumers. The war had brought strict agricultural regulations in most countries, as in
Sweden, but most of these were disbanded after the war. The economic climate was liberal
and directed towards free trade. The agrarian crisis was an international phenomenon, and the
means to combat it was also more or less the same all over Europe. The same kinds of
regulation systems were enforced everywhere to counter falling prices and to curb supply.
Import monopolies, export regulations and government export subsidies came into effect. The
only European nations that maintained a free trade system were Denmark and the
Netherlands, both large agricultural exporters (Just, 1992, Just, 1993:269-273). All other
Scandinavian countries enforced regulation systems governing exports and imports and at the
same time directing production. All of these regulations were enforced during the early
1930´s. The cooperative movements became important actors as they were often used as the
organisers of agricultural regulations. The cooperative movements had started already in the
1890´s as a way to handle the market for farmers. Later the local cooperatives developed into
regional organisations and then national, at least ideally. In Sweden, as this essay will show, it
was the other way around. Most of the cooperative organisations had been founded around the
turn of the century and had the same missions everywhere: preserving and strengthening the
family farm, fighting for increased income for farmers, defending agricultural as such and
finally, providing services for agriculture (Michelletti, 1990:16). Although the goals of the
agrarian cooperative movement were the same, the practice differed quite a lot from case to
case. Factors such as the structure of the economy, the political system and the influence of
pressure groups, the ability for organisations to influence policy, all governed how agrarian
organisations and the state interacted (Just, 1994:37).

Corporatism in Sweden
Sweden has been mentioned as being the archetype of a democratic yet corporative society.
But corporatism is a word with different connotations. It is a political ideology (Fascism) as
well as being a term describing factual qualities in political systems. Thirdly, it can also be
seen as in between, a non-fascist version of a corporative society, where organisations are
seen as enhancing democracy and having a legitimate role in the bureaucracy. But of course,
private organisations do not have the task of promoting the interests of everybody. Therefore
corporatism is a democratic problem as it curtails influence of the citizens.
But it is important to distinguish between fascist corporatism and the factual corporatism
of the 1930´s. Corporative ideology departed from common political ideas in the early 20th
century that were institutionalised in the interwar period. Corporatism was actually a way to
counter liberal political systems and market economy. Liberalism was the ideology of the
1920´s and was implemented as a political system after the war. This can, for example, be
seen in the constitutions of the newly founded states in Eastern and Central Europe (Mazower,
1999, Gerner, 2004 and Katzenstein, 1985:139). The enemies of liberalism described it as
being directionless, imperfect and concentrated on short-sighted economic gains. In the late
1920´s the free market was often distinguished as the core of all political, social and economic
problems of the time. The depression and the following social disorder were all blamed on the
liberal economic system, parliamentarianism and democracy. To the enemies of liberalism
corporatism was portrayed as being able to create a planned “natural” society, bringing all
interests together. It was quite common that corporative ideology also took the form of
economic nationalism, at least in Eastern and Central Europe, and to a lesser degree in
Scandinavia (Kõll, 1994).
Corporatism means that private interest groups are incorporated and gain influence over
state bureaucracy. The private interest groups were in general founded to promote specific
interests. Governments to sustain economic and social control in economic systems based on

114
private ownership used these private groups (Williamsson, 1985:9). Government and
organisations cooperated to develop the economy while maintaining control. The basics being
that the state and organisations had common interests, understanding each other. The
relationship between state and organisation built on reciprocal giving and taking, but the key
is that the organisation has to something to offer, often the ability to discipline its members
(Cawson, 1986:5, Öberg, 1994). The ability to discipline members is an important commodity
since it simplifies implementation of policies. Disciplining members was also a form of
legitimising government action. Max Weber has defined bureaucracy as based on trust, as
citizens trust a legitimate bureaucracy. Through organisations there were other ways to
establish legitimacy, as organisations had to become acceptable partners, while maintaining
the trust of its members (Weber, 1983).
The democratic form of corporatism existed in many European nations with economies
open to the world market. In states such as Sweden, there was a strong need to be able to
adapt and cope with change, in turn creating systems for group collaboration (Katzenstein,
1985:136-190, Rothstein, 1991:150-152). All states in Europe faced the same challenges
during the depression, as economic hardship was combined with the rise of extremist groups
on the right and left. In this setting the historical legacy of cooperation between different
groups became very important. Legitimate organisations gathering the farmers were tied to
the state to hinder the growth of rural fascism. The Swedish economic system incorporated
many strong organisations, both private and official. The economic system was based on the
existence of strong interconnected interests, incorporating private organisations, semi-public
officials and state bureaucracy (Sejersted, 2005:15-16).

The Political Situation in Sweden after World War One

Swedish politics of the 1920´s can be characterized as unstable, as governments seldom had
majority in parliament. Therefore governments superseded each other in rapid succession. The
situation of minority parliamentarianism ended in 1933 in the Cow trade (Kohandeln)
between the Social Democrats and Farmers´ Union (Bondeförbundet). The context was that
the international depression had been brought to bear on Sweden and both agriculture and
industry were hit hard as unemployment rose dramatically. In brief the Cow trade meant that
the farmers accepted social democratic labour policy and the Social Democrats accepted the
agricultural policy of the farmers. This has been explained in many different ways in previous
research. One explanation was that the Social Democrats attempted to create stable
governments to achieve political and social order and a stable power base (Nyman, 1947,
Gerdner, 1946). Another explanation has been that the Farmers´ Union needed to create a
stable support for agricultural regulations, through forcing the Social Democrats to accept a
producer-friendly policy (Hellström, 1976). Another interpretation was that the Social
Democrats aligned with the centre-right spectrum thereby drawing a line towards the
communists (Schüllerqvist, 1992). It has also been described as an opportunity for the Social
Democrats to win the countryside by cooperating with the Farmers´ Union who in turn drifted
from their former allies among the conservatives (Söderpalm, 1976). The explanation closest
to the truth is perhaps that there was a possibility for both parties to benefit from aligning with
each other, thereby countering the depression and defending their respective voter groups.
Thereby they also countered growing communism as a threat to the Social Democracy and
fascism as the threat to the Farmers´ Union. A curios explanation is also that both parties were
strong mass organisations with clearly defined priorities. Thereby the organisations worked in
the same and they could understand one another (Bjärsdal, 1992, Eriksson, 2004:126-127). Be
that as it may, the Cow trade has been described as the very foundation for corporative
decision-making in Sweden. But another convincing explanation to the rise of corporatism in
Sweden does not relate to party interests or political deals at all. Political Scientist Bo

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Rothstein offers the explanation that collectivist ideology achieved it´s breakthrough on June
10th 1932. He refers to the initiation of the Swedish dairy regulation as the prime example of
corporative organisation (Rothestein, 1992).

Fascism as a threat
The depression brought the threat from communism and fascism ever closer to Sweden. But
Sweden never saw any strong fascist or communist movements. Instead, there were small
political groups. There were several smaller fascist or right-wing organisations, many of the
upper-class oriented and based on anti-communism, strong among army officers for example.
The same group later admired Nazi-Germany for its military prowess, but friendship and
respect for Germany was a common phenomenon among the Swedish elites (Nilsson 1996,
Richardsson, 1996).
Another group where fascist ideas existed were among university students. There was,
however, an important struggle between the Swedish Right (conservatives) and its youth
organisation Swedish National Youth Organisation (Sverigesnationellaungdomsförbund,
SNU) in 1934. From the late 1920´s there was an ongoing competition between the mother
party and the youth organisation, with regards to voters, as the SNU ran as a party in local
elections. SNU became increasingly authoritarian and radical with influences from Nazi
social policies, Austrian Heimwehr-fascism and Italian fascism. Proposals for a planned
economy were the most important rifts (Wärenstam, 1965:257, Olsson, 2000:263). SNU had a
strong agrarian ideology and strove to gather farmers, but it was not an agrarian organisation
per se. In fact it was an organisation mainly for cities and students (Wärenstam 1965:306-307,
Andersson, 2003:151, Bokholm, 2008). There were, however, rightwing agrarian corporatists
in Sweden. For example Elof Eriksson, who came from the circles that founded the Farmers´
Union in the 1910´s. He later proposed the introduction of corporative measures to strengthen
agrarian influence in society, and even later became a fully-fledged Nazi (Eriksson 1946). But
these groups were miniscule. The latest research on the area indicates that farmers were
important activists in fascist parties, especially in rural areas, but these parties never reached
power (Dammberg, 2009).
One of the main reasons to why there never developed a fascist farmers´ movement in
Sweden is the foundation of the National Organisation for the Countryside
(Riksförbundetlandsbygdens folk, RLF) in 1929. It was a trade union for farmers and
particularly for smallholders. RLF grew rapidly on a program of defending agriculture from
an ideological and democratic standpoint. This in conjunction with the agricultural regulations
initiated later, by, with and through the other main organisation in the countryside
Sverigeslantbruksförbund (previously SverigesAllmännalantbrukssällskap, Swedish Union of
Agriculture, SL), meant that there was no ideological space in the countryside. There was no
room for any fascist (or communist) movement to grow (Lindström 1985:87-88). But at the
early stages in the founding of RLF there were controversies at local level. There was a
conflict between a local chapter of RLF in Ådalen called Agricultural Peoples´ National
Union (Jordbruksfolketsriksförbund, JRF) and a syndicalist workers organisation. In the
conflict concerning milk deliveries JRF used a rhetoric naming the working classes and trade
unions the enemies of farmers, and proposed that they ought to be shot (Thullberg, 1977:226-
236). Fragments of RLF apparently used a fascist rhetoric in the early stages, but in general
RLF managed to marginalise all authoritarian elements.

Dairy Regulation and its Forerunners

As mentioned earlier Bo Rothstein called the dairy regulation of 1932 the formative stages of
the Corporative State. But the dairy regulation did not occur in a vacuum instead it was part

116
of a comprehensive national and international regulation of the economy. But there were
forerunners, most recently the regulation of the grain trade. It was the implementation of a
system where specific organisations took the role of regulating a branch of the agrarian
economy. The grain system hinged on a law prescribing that all flour milled in Sweden should
contain a percentage of Swedish grain (Inmalningstvånget). The Swedish Grain Association
(Spannmålsföreningen) was created to counter falling grain prices and consisted of the major
mills. The association bought the entire harvest at the end of the year and as compensation
received monopoly on grain imports. The coercive measure was that the entire harvest had to
be sold to the association, and that the entire harvest had to be used in production. It was a
state initiated price guarantee, where a private organisation was appointed by the government
to administer the system. The state needed a counterpart to deal with and created the sought-
after organisations, as the State Grain Board (Statensspannmålsnämnd) became the nexus.
The board consisted of government appointees commonly with a past within other agrarian
organisation, showing an arrangement of interwoven relationships (Eriksson, 2004:89-93).
The creation of the regulations was on part of an entire system with several coinciding
factors. New organisations were founded and older ones were reformed. The RLF began to
organise smallholders in the countryside, the state created organisations for solving the
immediate agrarian questions, and SL was also involved in a process of reform since 1929.
Swedish Common Agricultural Society (Sverigesallmännalantbrukssällskap, SAL)the
forerunner to SL had been created as a national cooperative organisation but was in fact an
elite organisation. These first-generation types of organisations often incorporated narrow,
elite structures. Another similar organisation was The Yeomen (Lantmännen, SLR) founded in
1905, the national cooperative purchasing organisation. Within all of these agrarian
organisations individual links and interconnecting personal ties were common. Many
representatives of SL or SLR seated positions in both organisations while also holding office
in the County Agricultural Society (Hushållningssällskapen) (Rydén, 1998:226-227). Links
between different kinds of elite organisations were strong, and these organisations were
therefore trustworthy and promoted legitimate interests. For example, manor owners
dominated SLR and SL and during the depression the chairman of SL was Johan Nilsson
iKristianstad (between 1926 and 1939). He was the county governor of Kristianstad and a
long time parliamentarian in the Upper House (Förstakammaren). The political representation
within SL was strong, in 1940 there were 12 members of board, 5 belonged to the
conservatives, 3 Farmers´ Union, 1 liberal and 1 social democrat, 2 members were non-
partisan (Johansson, et. al. 1979:86). Well-known and prominent members of society lent
atmosphere of trustworthiness.
But it was SL that was to become the major organisation. The reformation of SL started in
1929 with the expressed purpose to widen the organisation, making it more efficient and to
extend membership. SL allowed individual membership alongside local organisations
becoming members. The number of individual members was dropping, in fact half of the
members left between 1921 and 1928 (Bjärsdal, 1998:62). But the establishment of the
competitor RLF also played in, and the situation between the two was ambivalent, while it
was common for farmers to be members in both. Around 1930 RLF decided to aid SL in their
drive to organise farmers on a cooperative foundation (Morell, 2001:70).
Behind the reform stood economist LudvigNanneson, a long time servant of SL. Initially,
in 1918, he was head of the SAL bureau developing farm management. Nanneson was a
thorough economist focused on book keeping and economic performance. In 1928 he became
the managing director for SAL and at the same time a government commission on agriculture
was initiated. As the managing director he wrote a memorandum concerning membership.
Stating that the number of individual members was not going to increase and that in his
opinion the solution was to support local cooperatives. Thereby it would create the

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foundations for increased membership, which in turn would strengthen SL. The purpose was
to promote the economic interests of the members towards the state (Bjärsdal, 1989:279-280).
In his mind the organisation could not remain a political force with only individual members.
Increased membership should come through strong local cooperatives and through the use of
the County Agricultural Societies. His approximation was 300 000 members (Bjärsdal,
1989:283-284). SL should become the mother organisation for the entire agricultural
cooperative movement.

SL and the State

The reorganisation of SL was indeed necessary and it became visible in the ever present
agrarian press. Especially in the journal Landtmannen – Tidskriftförlandtmän (The Yeoman –
Journal for Yeomen) the depression was a common theme as was cooperative ideology and
organisation. The journal was formed by a merger of two separate papers, both quite
influenced by agrarian elites and the nobility (Eriksson, 2008:105-128). In an article Captain
H. Hegardt described the dire situation and that the reason for it was a civil war among
Swedish farmers i.e. competition. The old way to handle hardship was to change and adapt to
the modern world. The modern way was to unite in cooperatives (Hegardt, 1928:999-1000).
Other common concepts were rationalisation and technical arguments. Agronomist Erik
Green pointed out that SL should not collaborate with the state, because state intervention
inevitably led to inefficiency. Perhaps state collaboration worked for the moment, but in the
future it would curb innovation and sound development. Organisation could not build on
emotions and ideology alone, instead it required sound economic principles (Green,
1929:1057-1059, Green, 1930:935). In general the economic crisis led to an increase in the
amount of cooperative propaganda and ideology, both in society and from SL. Previously in
history SL did not incorporate any strong nor proper cooperative ideology. Another general
trait of the Swedish agrarian cooperative movement was that it was weak in regards to
membership. I will return to this discussion later.
In 1928 the state had initiated the government commission on agriculture in which two
former ministers of agriculture took part. The commission, reform of SL and the foundation
of RLF, all emanated from the same source: the distinct need to reform Swedish agrarian
organisations to combat the agrarian depression. The commission published its findings and
supported SL in its efforts to strengthen the cooperative movement. SL had approached the
conservative Minister for Agriculture J.B. Johansson iFredrikslund, asking for funds to
initiate the propaganda for cooperative organisation. The funds were given and Johansson
described the main reason for weak cooperatives as the lack of a strong central organisation
(i.e. SL) (Landtmannen, 1930:170). The discussions on how to promote and strengthen
agrarian cooperatives continued. A meeting was held at the Royal Academy for Agriculture
(Kungligaskogs- och lantbruksakademien) on the topic “Cooperatives in Agriculture.”, the
discussions concerned cooperative organisation and ideology and the speakers were Anders
Hedberg (Secretary of the National Consumer Cooperative Movement) and Fritiof Gustafson
iDomö (MP for the Right and later party leader). One speaker maintained that the use of
pattern statutes had been very important in founding consumer cooperatives, but less common
in agriculture. This was part of the reason for why the agrarian cooperative movement was
weak. In the discussion the need for strong central organisations, in dairy for example was
aired. The speakers well understood that organised and prosperous dairy cooperatives were
uninterested in a central organisation. But instead, according to the speakers, they should be
thrilled as they would be the leaders in a national cooperative dairy movement. As always,
Denmark was used as the ideal for agricultural development and the Swedish cooperative
movement needed to become “a popular movement with richness and marrow” (“en
folkrörelse med must ochmärg”) (Landtmannen, 1930:258-259). There were many reasons to

118
the fact that the Swedish agrarian cooperative movement was weak. The cure, however, came
through the use of cooperative ideology, something that previously had been seen as quite
leftist, at least by the ever present agrarian elites. One of the main reasons to the weak
organisation level in agriculture was that the leading farmers had no need for organisation, as
they could handle the market and rationalise agriculture on their own. They had the
organisations they needed in the County Agricultural Societies and the Royal Academy for
Agriculture. They also had strong representation in parliament, as MP´s. The smallholders in
need of cooperatives, did not have any experience in founding organisations, and did not have
the means to create them. In the late 1920´s and early 1930´s the agrarian elites turned to
cooperative ideology to create national organisations to further agriculture. “...hopefully the
farmers will, not only through joining different cooperatives, but also through unwavering
solidarity, show that they understand the fact that only unity gives strength” (Landtmannen,
1930:306). Although SL, with the aid of the state tried to increase membership among
farmers, and to promote cooperative ideals, the results were disappointing, SL developed
slowly, although they also received support from RLF (Thullberg, 1977:40).

Forced Organisation and Dairy Regulation

The foreplay to the dairy regulation was also political. In 1928 the conservatives won the
election and one of the main items on the agenda was to strengthen and support agriculture.
But the government also experienced party problems in aiding agriculture as many
industrialists within the Right saw the depression in agriculture as normal economic
development, the inefficient businesses would disappear and the prosperous ones would
prosper (Eriksson, 2004:84-87). The Prime Minister ArvidLindman more or less forced the
industrialists to accept support for agriculture. But the government lost the vote on raised
grain tariffs and resigned. A liberal government took office under Prime Minister Carl Gustaf
Ekman and Minister for Agriculture was Bo von Stockenström.
As the organisational development for SL went slowly, the organisation decided to
approach Stockenström with a proposal. SL wanted a system where they would control
production and prices on the Swedish dairy market. The state would guarantee the role of the
organisation, more or less through granting it a monopoly (Hellström, 1976:357). What SL
demanded was the creation of a system where they got the right to arbitrarily tax all milk
producers in the country. SL together with the state would control the pricing for dairy
products on the national market. Funds raised would be used to support the export of butter.
The idea was that SL´s representatives should put a price on the milk of non-members that
would make it unprofitable to sell milk directly. This would force all producers to become
members in the cooperative dairies (Rothstein, 1992:112). SL meant that all producers had to
understand and participate in the common economic interest and this demanded total and
complete cooperation on the market to avoid competition. There could be only one
organisation, these so-called “dairy unions” would control all aspects of production, selling
and marketing. When joining a union, farmers could no longer compete with each other and
had to accept the prices set by the union. Complete and utter loyalty was demanded
(Nannesson, 1932:267-269).
The funds that were raised through the taxes should not go to the state, but to SL with the
expressed purpose of strengthening the organisation and support butter export. SL collected
the tax directly. Thereby the state allowed a private organisation the right to tax. It was a
system that would force producers to become members and if they refused it would cost them.
SL intended to use the state as leverage to forcefully organise farmers. The free riders
(friåkare or pytsåkare) could receive better prices selling milk directly to consumers, and the
system would force this trade to cease (Rothstein, 1992:161).

119
 The government was positive to the suggestions from SL and a proposal was put to
parliament on June 10th 1932. The concept that a private organisation used the state to force
private actors into joining it came from the fact that the Swedish cooperative movement was
weak. Many of the producers saw themselves as businessmen and not as farmers or bearers of
cooperative ideology. They had their own interests and working distribution systems
(Johansson et. al. 1979:53). These producers did not need this form of organisation, since
their businesses were strong enough on their own. As said previously, the prosperous farmers
did not need organisation, and the smallholders needing it, could not create it (Juhlind-
Dannfelt 1917:6).
The comprehensive proposal put to parliament was that the state introduced a tax
(prisutjämningsbidrag) on milk, collected by the organisations. It hinged on that the national
organisation had to request this tax. The same system was introduced on local level, where a
local organisation would collect and use the tax. The organisations and organisational
development was the key. The organisations mentioned in the proposal had to encompass the
majority of the producers, and the national organisation had to include at least 60 percent of
the total amount of milk in the country. Only then could they request the tax. This meant that
there was an extremely strong incitement to join, and also pressure from other producers. The
local organisation had to include at least 70 percent of the amount of milk sold in the area. A
majority of the members in both organisations had to support the decision to require the
introduction of the system from the state. In parliament the proposal gained support from the
Liberals, Farmers´ Union and the majority of the Right. The most sceptical was the Social
Democrats (Eriksson, 2004:114-115).
In the upper house there was an ideological debate between three Professors of Law
concerning the constitutionality of the proposition. The most sceptical was Professor Carl
Axel Reuterskiöld from the Farmers´ Union. He suggested that the system was
unconstitutional since the state could not delegate the right to tax to a private interest
organisation (Motion 370 FK 1932). Professor Ernst Trygger (Right) and Hjalmar
Hammarskjöld (Right) both believed that the system was not unconstitutional, although
strange and not in line with tradition. Instead they contested that something had to be done to
help agriculture, and that anything was allowed in dire situations (von Stockenström,
1958:85).
The proposition passed both chambers, and the process of creating national and local
organisations started immediately. Another aspect was the creation of the organisation The
Milk Propaganda (Mjölkpropagandan) by the milk producers. Its purpose was to promote the
consumption of Swedish dairy. It was part of the general organisation The Swedish Food
Propaganda (Föreningen Svenska livsmedelspropagandan) with the promotion of Swedish
produce on the agenda (FöreningenSvenskaLivsmedelspropagandan, 1932:359). They
published different journals with descriptions of Swedish products and dairy. One article
brought forth the idea that the problem of Swedish agriculture was the patterns of
consumption. Swedes consumed imported goods and imported food but instead Swedish
products should have its honourable place on the table. Phrases like degeneration of the
bloodstock and hygiene were used (MeddelandenfrånMjölkpropagandan, 1932:133). The use
of foreign products and the propaganda of these had to be fought. Imported goods like
margarine had to be crushed. It was self-defence to fight margarine through the promotion of
Swedish patriotic products like butter (MeddelandenfrånMjölkpropagandan, 1932:227).
The creation of organisations had started before parliament had decided. In May 1932
Swedish National Dairy Union (Svenskamejeriernasriksförening) was founded by several
regional dairy organisations. The leaders of these organisations all belonged to the central
circles of Swedish politics and agriculture. The board had 10 members consisting of: 4 manor
owners, 2 managing directors and 4 farmers. It also included several members of parliament

120
(for example the next party chairman of the Farmers´ Union Axel PehrssoniBramstorp)
(Landtmannen 1932:462-463). The organisational development on the private side was
seconded by the establishment of State Dairy Board (Statensmejerinämnd) to oversee the
dairy regulation. In 1933 the local milk tax was disbanded and only the general milk tax was
used to subsidise butter exports. The subsidised export of butter to the British market actually
led to protectionist arguments in the United Kingdom as well (Nilsson, 1983:72). The regional
and local organisations developed quickly and in 1933 there were organisations in all counties
but one (Jönköping). All were members of the Swedish National Dairy Union and
encompassed 75 percent of all milk in the country (Nannesson, 1933:217). In many areas
organisational development was thriving, for example Dairy Union of Södermanland
(Södermanlandslänsmejeriförbund) encompassed 97,2percent of all milk in the area
(Landtmannen, 1932:630).
The regulation systems brought several problems as such since the relationship between
production and consumption was disbanded. This meant that overproduction remained and
actually increased during the 1930´s. Neither the international market nor national
consumption was allowed to influence Swedish production. For example, the grain regulation
led to increased production, while the actual demand actually decreased (Morell, 2001:177).
But in the end, the regulation worked for its purpose, being to save and strengthen Swedish
agriculture, nothing else. But in any case, the system worked and the Swedish agricultural
market stabilised.

Swedish Agrarian Corporatism

Why then did the Swedish state enforce a system that in some interpretations was
unconstitutional? Why did the state choose one private organisation, SL to be the national
agrarian cooperative organisation? There are several answers to this.
First, SL was an organisation that was seen as promoting legitimate interests. The members
were almost to the man belonging to the elites. For example, the Minister for Agriculture von
Stockenström had established relations to the organisation (as all Ministers for Agriculture
actually had, being farmers or manor owners themselves). The legitimacy of the organisation
came from the fact that it was already interlocked with the state and/or semi-state
organisations mainly through individuals being active on all arenas. These connected interests
were quite institutionalised and institutionalisation being one of the definitions of corporative
structures (Lewis, 1990:64). The organisations had the foundations and channels to organise
farmers and therefore they had a currency accepted by the state.
Secondly, the Swedish political system incorporated ample possibilities and channels for
private organisations to influence policy-making. For example, American Sociologist
Seymour Martin Lipset has maintained that the ideology of Labour movements was shaped in
the interaction between the movement and the bourgeois elites governing the state. His
argument being that a rigid class system generated a more radical and revolutionary Labour
movement. Another factor was how long the working classes were excluded from political
influence and the level of the repression. In repressive conditions the Labour movement
becomes hostile to collaboration with the oppressive state (Lipset, 1983:1-18). This is of
course wrong, as Bo Rothstein has shown. Sweden was the last country in Scandinavia to
implement universal franchise, Norway was one of the first. Therefore, according to Lipset
the Swedish labour movement was more radical and the Norwegian reformist. But the case is
the opposite. The Swedish labour movement was consequently reformist. The reason being
that the interests of the labour movement was seen as legitimate and incorporated into the
system of government commissions in the 1880´s (Rothstein, 1991:156). Within the
commissions, interests from labour unions were brought in, and this meant that the state gave
the movement a role. Therefore the Swedish labour movement saw no need for a violent

121
revolution, and instead became reformist, as the system actually worked. The same kind of
commission system led to the creation of the regulation system. Agrarian organisations were
brought in to organise agriculture and make it prosperous. At the same time they received
state support to force farmers to become members.
Thirdly, the system of government commissions meant that private interests were given a
task within the political system. The commission system started already in the 17th century but
the largest expansion took place during the 20th century. The committee system led to the
creation of channels of organisational influence. The state needed expertise, something often
found in private organisations. It was seen as a legitimate process, where groups were given
influence over policy-making and policy enforcement. The committees would normally
encompass different interest groups and the decisions being a compromise (Zetterberg,
1990:284-309, Johansson, 1992). The private interest groups brought specific knowledge
through their interests, the parliamentarians role was to stand for common sense (Hesslén,
1927:358-359).
Fourthly, the depression was a formative stage both for politics, social policy and
agricultural policy. The regulations of the 1930´s spilt over into World War Two and became
important means to support the Swedish population. The regulations from World War Two
spilt over into the Cold War, where preparedness for war was the crucial factor. The
regulations then spilt over into the EU and Common Agricultural Policy (CAP) constituting
the European agricultural policies. But everything started in the 1930´s when the state needed
partners to combat the depression, and chose a few cooperative organisations. This created a
system of agricultural policy where organisations have maintained their influence.

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126
 7. Wholesome Milk

Håkan Jönsson

Milk is one of the foods most strongly associated with health-giving properties. Particularly in
Northern Europe and North America, milk acquired a unique status, and a number of
governmental means were activated to promote milk consumption. This article wishes to
apply a cultural history perspective to the wholesomeness of milk. It deals with how milk
gained its status as a wholesome food and how the foundation for this status has come to be
challenged in recent years. The findings on the dangers of saturated fat, together with changed
habits of consumption, have created major challenges for the dairy industry, which is trying to
counter the situation with new types of products. The empirical material is drawn from the
Scandinavian countries, especially Sweden.

The golden years – Milk as the perfect food

Milk and other dairy products have long had the reputation of being particularly health-giving
foods, something that was noticed early on in ethnological research (Ränk, 1966; Lysaght,
1994). In 1950 the Folk Life Archives of Lund University (LUF) sent out a questionnaire
about dairy in everyday in peasant society (LUF 75). Among other things, it emerged there
that dairy products had functioned as a universal medicine against all kinds of ailments in
peasant society. Children who had rickets were supposed to drink unstrained milk, and this
worked extra well with milk from a cow that was all one color, or if the child ate from the
cat’s bowl. Warm milk with brandy or a lump of butter was recommended for colds and
shivers, mare’s milk was good for whooping cough and bad lungs, and goat’s milk for
tuberculosis, anemia, and stomach complaints. For earache or ear inflammation, it was
recommended that milk warm from the cow be squirted into the ear, usually straight from the
teat.
Unlike much else in folk medicine, this view of the wholesomeness of dairy products was
not dismissed by modern science. When one of the prominent figures of early food chemistry,
William Prout, wanted to find the essential nutrients, he analyzed milk, which he assumed
ought to contain these substances. Thanks to his analysis of milk, he succeeded in
distinguishing albumin, carbohydrates, and fats, the constituents that have been the basis of
the study of nutrition ever since (Bildtgård, 2002:76). Milk producers, with the kind
assistance of researchers and state authorities, exploited the new findings that came at the
beginning of the twentieth century on the significance of vitamins, minerals, and proteins for
the body in a manner that was remarkably positive for their activity (Helsing, 1999:111).

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 (Picture from the Milk Propaganda: Milk offers joy of life)

In the responses from some of the older LUF informants, one can read of people who had
received extra ration cards for butter during the war for everything from diabetes to poor
eyesight, and even today many people can testify to the great amounts of heavy cream that
people with tuberculosis were fed. For children, milk was the healthiest thing of all. With only
mild exaggeration, it could be argued that the whole of modern Swedish child welfare is built
on milk, for Swedish child welfare centers came into existence from what were called “The
Milk Drops,” philanthropic institutions that, starting around the turn of the century, had been
responsible for giving advice on breastfeeding and distributing substitutes for breast milk
(Stenhammar, 2001).
In 1923, the Milk Propaganda Association (Föreningen Mjölkpropagandan) was founded.
It was to have an impact that other food advocates could only have dreamed of. The
association would work to provide information about dairy products, to improve their quality,
and, not least, to increase their consumption. Milk Propaganda produced a great number of
brochures and books directed at dairy farmers and consumers. In its first ten years alone,
twenty-eight brochures were printed in more than three million copies altogether. The
association published a monthly magazine, produced films, organized milk days and milk
weeks, backed the establishment of milk bars, and produced promotional material for the
dairy industry. Milk Propaganda was very active in the schools. Special milk lessons were
organized, with lectures and films, often in combination with various competitions for prizes.

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In its work to increase milk consumption, Milk Propaganda collaborated intimately with the
dairy industry. Milk Propaganda’s public funds were used, among other things, to execute
“artistically prepared advertising proposals and slogans for milk, butter, and cheese,” which
were made available to the dairy industry for its own advertising (Mjölkpropagandan 1923-33
(Milk Propaganda 1923–33), 1933:5). Milk Propaganda was not a specifically Swedish
phenomenon; similar organizations also existed in countries like Norway, Great Britain, and
the U.S. (Lyngö, 2001; DuPuis, 2002).
Milk Propaganda was not purely a trade organization. In its governance and activities,
farmers, dairy representatives, politicians, doctors, teachers, researchers, and consumers were
brought together. It was financed mainly by fees from farmers and dairies, but the Swedish
Parliament and the country’s county agricultural societies contributed sums of money as well.
The involvement of government agencies in Milk Propaganda appeared politically
uncontroversial inasmuch as all parties shared in the positive attitude toward dairy products.
Milk was even able to function as a meeting-point for partially conflicting interests, making
work easier for the coalition governments of the 1930s in the Scandinavian countries. The
agrarian movement wanted to increase milk consumption in order to have an outlet for its
products, since both the butter and grain markets had become highly competitive, while the
Social Democrats saw free school milk as an important part of a progressive social policy.
The press, too, was positively disposed.
The association itself regarded the widespread support behind Milk Propaganda as a
natural consequence of the advances of nutritional science and the need of an undernourished
population for nutritious foods. In order to understand the strong status milk gained, however,
it is not enough to refer to the consensus on milk’s wholesomeness. After all, there are other
foods, such as wholegrain bread, that have an equally strong status as wholesome without
their having become for that reason objects of the same attention as milk.

Picture from the Milk Propaganda, “You can always trust on milk, it makes your theeth strong and white”

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Milk – Materialized modernity
During the Stockholm Exhibition of 1930, Milk Propaganda set up a milk bar, where milk
was served, and sandwiches sold, for purposes of propaganda. It was so successful that the
association decided to form a limited company, The Milk Bar AB, which opened milk bars
around Sweden within the next few years. The profits went to Milk Propaganda’s activities
(Mjölkpropagandan 1923-33 (Milk Propaganda 1923–33), 1933:12). That the milk bar was a
hit at the Stockholm Exhibition, the great showpiece of functionalism and modernism in
Sweden, was hardly a coincidence. The American historian Melanie DuPuis (2002), who has
described how milk came to acquire its status as a perfect food in the U.S. early in the
twentieth century, considers one important part of the explanation to be that milk had (or at
least could be ascribed) qualities that have characterized the narrative of modern progress.
Milk has had a capacity for being constantly refined and improved by modern
technological and scientific advances at the same time that it has refined and improved those
who have drunk it. Far into the nineteenth century, milk was called “white poison,” owing to
its capacity to convey disease, especially to children in the cities. But this image changed once
Pasteur and the sanitation experts had applied their new methods to milk (Latour, 1988). The
successes were so conspicuous that by the turn of the last century milk was a symbol for an
antibacterial campaign that Nancy Tomes (1997) has likened to a religion. Modern medical
science and the hygienic advances were spoken of as a road into a bright new future. Pasteur,
Koch, and Trudeau stood out as heroes of the modern age, with district medical officers as the
parish priests of the new religion.
The history of milk’s development, precisely like the narrative of Modernity in general, is
also a story of increased order and subdivision. The milk is separated: cream separately, skim
milk separately. It is homogenized: no glass of milk is higher or lower in fat than any other.
The packaging lists the nutrients, their content is declared in exact percentages, and we learn
to what degree one hundred grams of milk meets the daily intake doses recommended by
authorities. The visions of modern progress, particularly in the Nordic countries, came to be
interwoven with the ideas about creating a welfare state. In this context, too, milk proved to
be a useful tool. The national governments saw milk as an important part of making the
population stronger and healthier and creating a new national identity. Inger Johanne Lyngø
(2001) has described how in Norway milk came to be a symbol of the new national diet that
was propagandized during the interwar period.
It may be interesting in this context to reflect on the significance of the color. Milk is
white, both in itself and in its symbolism. Warren Belasco (1989) has called white the color of
modernity. The color white stands for purity, hygiene, progress, and order. Products like
white rice, white sugar, white plastic bags, and white tiles have all been associated, like milk,
with development and progress. Milk also has a link to the color white through the fact that it
is drunk particularly by people with white skin. An important reason for the concentration of
milk-drinking in Northwest Europe and North America is that a large proportion of the people
who live outside these regions have hereditary lactose intolerance. Thus, it does not agree
with the major part of earth’s population to drink the food that has been portrayed as a perfect
food in propaganda for milk. With that, milk could also be used to accentuate the superiority
of the white race. In 1920, the prominent nutritional expert W. C. McCollum declared that the
peoples that had low infant mortality and were outstanding in commerce, art, literature,
science, and other intellectual activities were the peoples that used a lot of milk products
(DuPuis, 2002:117). In other words, by saying that milk was a perfect food, white Northern
Europeans and North Americans were simultaneously accentuating their own perfection. This
has seldom been reflected on in the literature on milk’s positive nutritional properties.
Perhaps, as Richard Dyer (1997) has shown in his study of representations of whiteness in the
West, this is due to the fact that the color white has become synonymous with colorlessness. It
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constitutes the absence of color, the normality against which all other colors and races are
measured. It is taken for granted and thus invisible, just as drinking milk became a habit taken
for granted in the core regions of modernity.

Cracks in the façade – The saturated fat issue

Up until the 1970s, milk’s status as a perfect food was strong. At that time, however, a certain
reappraisal started taking place. In Scandinavia, it becomes visible through the production of
light products that started in the years around 1970 (if one disregards the low-fat dairy goods
like skim milk and buttermilk products that existed traditionally). An important driving force
behind these launches was the changes in dietary recommendations. From having previously
been focused first of all on deficiency diseases by urging people to eat more of certain
nutrients (vitamins, protein, calcium), dietary advice became more oriented to reducing the
consumption of certain foodstuffs: fat (saturated, especially), salt, and sugar. While the earlier
dietary paradigm said that good health was attained by eating more of popular foods like
meat, milk, eggs, and cheese, the new paradigm, called “negative nutrition,” said the reverse.
Now it was a matter of cutting down on a great deal of what had previously been categorized
as the good things of life (Levenstein, 1993:98, 204). The food industry at first felt threatened,
but as time went on, the commercial potential existing in the sale of light and fat-free products
emerged (Heasman et. al, 2001:60).
Low fat content became, at least in marketing and product labeling, something positive.
One instance of this is how, from January 1998, American varieties of milk were given
designations which assumed that fat was something bad. Skim milk is called “fat-free milk,”
the 1-percent is “light” or “low-fat milk,” and the 2-percent is “reduced-fat milk” (Kärnfullt,
5/98). This development has resulted in challenges to some of the very foundations of dairy
production. From the beginning, the system of payment to dairy farmers has been based on fat
content (Sommestad, 1987). The breeding and feeding of cattle have in fact been oriented
toward increasing the fat content of the milk, and according to statistics from the Swedish
Dairy Association, the average fat content of milk increased from 3.2 percent in 1900 to 4.35
percent in 1994.
Many consumers have changed their consumption in the direction of lower fat content due
to the medical findings. However, from the responses to the Folk Life Archives questionnaire
on dairy that I sent out in 2003 (LUF 212), it also appears that far from everyone perceives
full-fat dairy products to be as unwholesome as nutritional science authorities do. The same
phenomenon has been observed with regard to Danish consumers by Lotte Holm (1991:163).
The fact that the new findings appear to have difficulty prevailing may be due to the earlier,
firmly rooted conception that milk fat was wholesome, especially in the treatment of
tuberculosis. “Some of the people with lung disease in those days drank milk warm from the
cow with the idea of encapsulating the bacilli by means of fat,” one of the informants for the
Folk Life Archives said in answer to the 1951 questionnaire, and it recurs in the
recommendations for countering diseases that it was the rich milk which was considered
healthy. Unstrained milk, preferably warm from the cow in the form of a ladleful in the barn,
was supposed to be good for anemia, for chlorosis, eczema, and other skin conditions, and to
comfort children with, according to the informants of the Folk Life Archives, where many
testified to how people with diabetes were given extra ration cards for butter during World
War II so they would get enough of the wholesome fat into themselves.

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Milk as deadly poison

When I was a child everybody, at least in my home district, believed that milk was
wholesome and absolutely necessary. You got strong bones from milk. I still believe
that milk is wholesome, even if some people nowadays say the opposite. Some “health
fooders” take the view that milk is supposed to be drunk by babies, not by adults.
They refer to the fact that the animals nurse their young for a short time, and then they
do without milk. On this point the learned disagree. (LUF 212, M 2445849)

When the findings on the danger of saturated fat were having an impact toward the end of the
1960s, the dairies had difficulties defending their standing as producers of a perfect food.
Since it was precisely the fat in milk that had been considered healthy, one might think that
these findings would mean disaster for milk’s status as a wholesome food. But the change was
not that great, since low-fat milk products now went on to be recommended in official dietary
advice. But during the 1990s, dairy products started being called into question from a number
of quarters. In the U.S., a resistance movement against milk arose from the debate about
Monsanto’s genetically modified hormones, which were manufactured to increase the cows’
production of milk (DuPuis, 2002:219 f.). Books like Milk: The Deadly Poison (Cohen, 1998)
and websites like www.notmilk.com started disseminating reports on milk’s having harmful
effects on nature and on the health of people and animals. Even among the medical experts
who were previously milk’s greatest promoters, some degree of skepticism toward the
wholesomeness of milk has spread.
Another threat to milk’s status were diets like the Paleo diet that promised better health and
weight loss with food that excluded dairy products. Briefly, the idea behind the Paleo diet is
that one should eat the type of diet that hunter-gatherer peoples have access to (Cordain,
2003). This is the food to which evolution has adapted our bodies, the argument goes. Wild
game, fish, shellfish, fruit, nuts, berries, and vegetables are the food that is recommended,
while dairy products, margarine, and grain are eliminated. It is interesting in this context that
in the marketing of the Paleo diet, essentially the same arguments recur that the dairy industry
has been wont to use. We should eat what is natural for the human being. What we have
“always” eaten is what is best for us. For this reason, the Paleo concept appears as a threat to
the dairy industry, not primarily because it would mean any rapid changes in consumption
patterns but because it challenges the longstanding and painstakingly constructed image of
milk as the perfect food.
The success of the Paleo diet is also an example of how experts outside the established
scientific community have gained a prominent role in the thinking about food and health
(Östberg, 2003:187 ff.). Milk’s status as wholesome was based in large part on the backing
that science provided for the claims. But in recent years, alternative health traditions have
become increasingly appreciated. The dairy industry is not letting these challenges stand
uncontested, and the wholesomeness of milk is argued for in brochures, on websites, and in
trade journals. But it has also started having recourse to more offensive strategies and
developing new product categories in which dairy products are being marketed anew with
health arguments.

49
This number is the code of the individual answer to the questionnaire. Every response has a unique code number.

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New strategies 1 – The functional food approach
Even if the dairy industry were to succeed in refuting the findings on the negative effects of
dairy products on health, this is a defensive strategy. For this reason, the dairy industry is
actively seeking new concepts with a view to being able to continue marketing itself as a
producer of healthy products. In recent years it has taken a great interest in “functional foods,”
a concept that was coined in Japan in the early 1980s as a designation for food with
documented health effects. In the years around the turn of the millennium, there were great
expectations in Sweden, as in other countries like Finland, the U.S., and Japan, around this
concept (Mark-Herbert, 1993; Hilliam et. al, 2000; Heasman et. al, 2001). Trend analysts like
Faith Popcorn (1992) established that high-tech manufactured health food would be the
future, and for many in the food industry this stood out as the major opportunity in a world
filled with increased competition and decreased margins.
The optimism was heightened by the successes of some new products, like the cholesterol-
lowering table margarines Becel and Benecol and the bacteria-enriched fruit drink ProViva.
State authorities too saw the concept as attractive, both for reasons of public health and as a
link in an adjustment of food production to increase competitiveness. However, according to
current legislation, products designed to be supplied to people for the purpose of improving
their health were by definition to be treated as medicine. Companies were therefore not given
permission to say that specific food products could prevent or cure illnesses, despite the fact
that there has long been a generally acknowledged connection between food and health. After
discussions between state agencies, researchers, companies, and consumer organizations, the
Swedish Medical Products Agency decided in 1989 that it would no longer apply legislation
on medicine to food that normally appears on the dining table, which opened some
possibilities for marketing food with health claims. However, according to the regulations that
were developed, the companies were not allowed to claim that a product in itself was health-
giving, merely that it contained something (for example, dietary fiber) that was good for
health. The autumn of 2001 brought new rules that under certain conditions allow companies
to claim in their marketing that a product in itself has a “documented health-promoting
physiological effect,” with the requirement that the documentation underlying the claim has
been examined and approved by an expert panel. Similar provisions have been in existence
throughout the EU since December 2006 (www.efsa.europa.eu). The first five products that
received permission to use “product-specific health claims” in Sweden were all to be found in
the dairy case, evidence of how intensively the dairy industry worked with the concept
(Jönsson, 2005).
In spite of all the efforts of researchers, companies, and state authorities, functional foods
have a small share of the food market. Although successful projects do exist, total sales
figures do not at all come up to the optimistic prognoses (Hilliam 1996; Heasman et.al, 2001;
De Heer 2002; Nestle 2002). The attitude toward food with health claims differs among
countries. While the U.S., Japan, Sweden, and Finland were positive early on, other countries
were more skeptical. Danish consumer organizations rejected health claims in connection
with food because, among other things, they can mislead consumers so that they confuse
specific products with a healthy diet (Laurell, 2000:58). In a 1997 report, the British National
Consumer Council established that the health claims confused consumers more than they
helped them and for this reason recommended a total ban on health claims (National
Consumer Council). But there were also those who were critical all along, considering it to be
a dangerous mistake to modify the laws. Marion Nestle, of the Department of Nutrition and
Food Studies at New York University (2002), thinks that the popularity of functional foods
with companies is due to the fact that they can be marketed with an “eat-more argument.”
They expand the market without threatening existing production. But today’s health-food
problems cannot be remedied by eating more, Nestle thinks, since many of the problems are
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based on the fact that the population of the Western world eats too much. Focusing on the
individual substances in products can also obscure the fact that it is the composition of the
total diet that has significance for health.
In that case, shouldn’t functional foods be able to appeal to the people who,
influenced by the health-food movement, have been persuaded of the connection
between diet and health? Not necessarily. A fundamental component of the ideology of
the health-food movement has been a critique of modernity. The solution is to get away
from laboratory-manipulated food, to farm organically and allow the original primary
products to come into their own. By definition, functional foods contain health
properties that go beyond those that exist in the primary product. Functional foods are
thus “unnatural” in the sense that wholesome properties would have been added to the
product. The result of this is that functional food products are not necessarily perceived
to be as wholesome as the people behind the products consider them to be. In a British
study it emerged that consumers perceived organically produced food, and in fact even
fresh, conventionally produced primary products, as more healthy than functional foods
(Heasman, et. al, 2001:254 f.).
Thus, the historical roots of functional foods exist first of all neither in health food nor in
dietary supplements but rather in the public health policy measures that were established
around the turn of the last century. During the Boer War, an alarmingly poor physical status
due to inferior diet had been observed among British soldiers, and it had impaired their ability
to fight. This became the starting point of an interest on the part of nation states in improving
the stuff of the populace with the aid of efforts to promote a better diet, a will that was
reinforced by the possibilities provided by advances in nutritional science at the beginning of
the twentieth century. The possibilities of enriching food with vitamins and minerals stood out
as especially attractive. The enrichment of food has been resorted to with a view to replacing
nutrients lost in the manufacturing process (for example, the enrichment of white flour to
supply the nutrients that exist in high concentration in the parts of the grain that have been
removed), as well as preventing the genesis of deficiency diseases (such as iodized salt to
militate against goiter) and other deficiency symptoms (Levenstein, 1988, 1993; Burnett,
1989; Bruce, 2004). States have also acted by propagandizing for foods that are considered
particularly healthy. There is no denying that the enthusiasm of companies, authorities, and
scientists for functional foods is reminiscent of the passion for milk in the heyday of Milk
Propaganda. There are also similar links here between companies, authorities, and scientists.
It is hardly a coincidence that all of the foods that have received approval for health claims in
Sweden are to be found in the dairy case, or that 70 percent of the functional foods market in
Europe in 2000 consisted of dairy products (and this does not count “butter substitutes” like
Becel, for example) (Laurell, 2000:8). Functional foods involve a reconnection with the
dream of the future that was strong in the society in which the dairy industry once took shape.
It is possible to discern a hope of getting back to the time when people believed more in
science than in pseudoscience and where a doctor respected by the scientific community was
a better sales argument than one who has been rejected by it, where the problems of the day
had their obvious solution in the latest research findings of the laboratories and not in a return
to the humbug of folk medicine. An important part of the appeal of functional foods rests on
its capacity to be a late-modern variant of modernity’s faith in the future.
The relative success of dairies in marketing functional foods products is based on milk’s
traditionally strong status as a wholesome food. Dairies, in contrast to many other food
companies, are generally perceived as trustworthy when they say they have a wholesome
product. Now as before, they are assumed to have scientific support for their claims. This is
an image that the companies have been anxious to preserve. At the same time, this link
implies that functional foods are not experienced to be as exciting as they seem to be for many

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researchers; they have too much of the dullness of health campaigns about them. Nor are they
particularly gastronomically interesting products. And of all of the challenges dairy products
have been faced with in recent years, the perception of them as dull and untrendy may be the
greatest. Neither milk-drinking nor cream sauces are suited to the passion for Mediterranean
food that appeared among gastronomically interested and health-conscious consumers in the
first decade of the new century. To get these groups back, completely different devices were
required.

New strategies 2 – Old-fashioned and natural

In modernity’s narrative about milk, milk symbolized progress and a break with the past; milk
was a modern success story in which development had gone from the white poison of the
nineteenth century to a hygienic and healthy product. In that narrative, old-fashioned milk was
something associated with tuberculosis, milk on the edge of souring, and cumbersome milk
cans. But something has happened. In recent years dairy products that market themselves as
old-fashioned and natural have had a vigorous upswing in Scandinavia. One example is the
way a dairy in southern Sweden has been marketing its “old-fashioned milk.”

Old-fashioned milk
Old-fashioned milk is milk with its natural fat content. This may vary between 3.8%
and 4.5% depending on time of year and breed of cow. Old-fashioned milk is not
homogenized. If the milk is allowed to stand undisturbed for a day or so, the cream
will collect on the surface and can then be skimmed off. Just like in the old days.
Character Creamy gold in color, tastes full-bodied and a little sweet.
(www.skanemejerier.se) (accessed February 10, 2003)

One of the properties that is held up as old-fashioned is a higher fat content. This is actually
misleading. In peasant society, milk was skimmed before it was drunk (Ränk, 1966). Drinking
full-fat milk was regarded as both immoral and uneconomical. The cream was to be used for
income-producing, status-enhancing butter. Small children, old people, and sick people might
possibly be given full-fat milk, in that case in the form of what was called a silsup, a cup or
ladleful that was drunk directly upon milking. The silsup was considered to be healthy for
frail individuals but was not something for ordinary adults. During the focus of recent decades
on harmful fat, however, there has arisen a notion that food was richer and better in the past.
In the dairy case, pre-modern peasant society is portrayed as a land of milk and honey (see
Hultman, 2002:38). This notion that things used to be better also shines through in talk about
the refinement milk undergoes before it is consumed. What distinguishes the production of
old-fashioned milk from other milk is that it is not standardized or homogenized, terms that,
moved out of the context of milk, have come to have a bad connotation. Being standardized or
belonging to a homogeneous mass hardly yields positive associations. It was not so long ago,
however, that both standardization and homogenization, precisely like the process of
modernization in general, were seen as signs of progress. There is something of a thought of
fairness behind standardization and homogenization. When it was decided in Sweden in 1941
that full-fat milk would be standardized to a fat content of 3 percent, it was because this was
the fat-content level considered sufficient to prevent detrimental medical effects in people
who needed to drink full-fat milk. Thanks to this standardization, the production of butter
could be maintained in sufficient quantities and milk never needed to be ransomed during the
war. In other words, a little of the abundance was taken so that everyone could do well. The
same holds true for homogenization. No glass of homogenized milk is richer than any other.

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 Fairness in the form of standardization and homogenization can also be perceived,
however, as smoothing out differences that are experienced as positive. One LUF informant
recounts nostalgically how good he was as a child at managing to get the cream that collected
at the top of the milk bottle (LUF, M 24475). It is possible to feel the difference in different
glassfuls of old-fashioned milk. The fat content is not constant but varies depending on which
cow the milk comes from and what time of year the cows are milked. Many people think that
not homogenizing milk makes it taste better. This is an argument that has a certain degree of
support from biochemistry (Wendin, 2001). Unhomogenized milk may be experienced as
more full-bodied due to the larger size of the fat globules. Thus it feels “fatter” (which is
considered to be good for the taste) without being so, one of the things that has led the small
Danish dairy Thise to stop homogenizing its varieties of milk. Organic low-fat milk in
Sweden is also not homogenized. However, if we turn to the 1984 (thirteenth) edition of Vår
Kokbok (Our Cookbook), we find the following under “Facts about Food”:

Milk (standard) In everyday speech, just called milk. The milk is homogenized, i.e.
the fat is broken up into smaller particles to avoid separation of the cream. In addition,
taste and consistency are improved.

Thus, it was not long ago that it was the good-tasting characteristics of homogenized milk
which were emphasized. Through processing the milk, the product had been refined. Now,
instead, the natural fat content and consistency are brought out as something positive.
Old-fashioned milk is evidence of a reappraisal of the idea of modern development. Faith
in the future is significantly weaker, and the present does not always look so attractive either.
There are altogether too many risks that cannot be mastered. The thought easily arises, then,
that things were better before; the past can be polished up, becoming a lost golden age to
yearn for nostalgically (Lash, et. al, 1994:247). Hence something of the appeal of the pre-
modern. At the same time, this appeal is based on the fact that the actual pre-modern
production of milk, the production of the milk of tuberculosis, of smallpox, and of destitution,
can be repressed. The loser in the low level of faith in the future is modern milk. The
consumption of standard milk is only one-third of what it was thirty years ago. Nor is modern
milk – standardized, homogenized, created in wartime for the purpose of distributing healthy
milk to all Swedish citizens in a spirit of solidarity – experienced any longer as having the
good taste ascribed to it in Vår Kokbok (Our Cookbook).
Additives in food have become increasingly debated. For example, in a Swedish study that
examined the experience of fifteen different health risks, chemical additives in food were at
the top with regard to experienced personal health risks (Jarlbro, 2000), and in the responses
of informants in the Folk Archives’ 2003 survey a clear aversion to additives is seen as well.
They stand out as both unnatural and unhealthy.

I think actually the most wholesome are products with as few additives as possible.
(LUF, M 2447)

To me, three-percent sweet milk, butter from pure cream, and solid cheese are the
most wholesome and healthy. Because there aren’t as many unnecessary additives in
them. (LUF, M 24427)

One informant who had previously been a major consumer of milk suddenly, at the age of
thirty, started having stomach trouble from drinking milk, something he thinks must be due to
there being too many chemicals in milk nowadays. This applies especially to the long-shelf-
life UHT milk that he had come across on stays abroad (LUF, M 24475). The difference in

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keeping qualities between the milk the informant describes and ordinary drinking milk in
Sweden is due not to chemicals, however, but to the temperature at which it has been
pasteurized (120°C and 70°C, respectively). Still, it is not certain that the informant would
have changed his view of the milk if he had known about this, since pasteurization too can be
viewed as unnecessary and unnatural:

There’s moaning and groaning day in and day out about our totally ruined population,
how dangerous it is to drink unpasteurized milk. (…) I have been healthy and fit in
spite of the fact that I’ve drunk loads of unpasteurized milk. (LUF, M 24427)

The view that processed milk is unwholesome is a view with which the trade is not
particularly delighted. Even if unpasteurized milk is generally not dangerous if it is drunk
perfectly fresh and has been produced under hygienic conditions, bacterial growth can easily
become disastrous. Every year, people in Sweden get sick, sometimes with fatal outcomes,
from bacteria they have ingested by drinking unpasteurized milk. How, then, has the
perception arisen that products are better and more healthy the less they have been processed,
even for a product like milk that reaped so many victims before the pasteurization process
made itself felt in the nineteenth century?
Warren Belasco (1989) has described how the view of what was natural was transformed
during the counterculture of the 1960s and 1970s. A fundamental thought in the food ideology
of the counterculture was that what was natural stood in opposition to what was modern. This
signified a break with a previously predominant view of nature that was imprinted by the
tradition of the Enlightenment. In that view, nature was seen as governed by rational laws and
consisting of exploitable resources. In the Romantic definition taken up by the counterculture,
on the other hand, nature was seen as opposing human manipulations. With that, products
became less and less natural the more the human being had controlled and designed their
production, and for this reason one should eat food that was as close as possible to the original
primary product (Belasco, 1989:39 ff.). From this ideology was born the conviction that old-
fashioned – or perhaps, rather, pre-modern – food was natural. It did not contain modern
inventions like toxins, additives, chemicals, and plastic packaging and was therefore also seen
as healthier. Because natural food was defined primarily by what it could not be (like
convenient and factory-prepared), everything from plain fare to Mediterranean food and
exotic dishes from the Third World could be seen as natural. In the wake of the talk about
natural food, the concept of primary products (preferably placed in opposition to semi-
prepared) gained a strongly positive charge as well, not least in gastronomy. An idea that a
clear opposition existed between different sorts of food grew strong. On one side was modern
food. Hygienic, rational, and easy to prepare. But also plastic, carcinogenic, and in the hands
of the authorities and profit-hungry corporations. On the other side, old-fashioned “natural”
food. Grown on a small scale in harmony with nature. Produced by small farmers and sold by
small agents and sellers of food. Good for the environment, the future, and the children.
Consequently, it has been possible to observe a growing interest in small-scale and locally
produced foodstuffs in Europe in recent decades (Salomonsson, 2001). Appreciation of the
regional is an important part of the ideology of the Slow Food movement, and it is being used
by regions throughout Sweden as a way of profiling themselves and being seen as attractive
tourist destinations (Heldt-Cassel, 2003). Many of the Folk Life Archives’ informants say that
they try to buy locally produced food if possible, at least as long as price and quality do not
differ too much. This development has led suddenly to another look at small-scale and local
food production as a business of the future, and among other things, it is being encouraged in
a major investment by the Swedish government in “Sweden, the Land of Food,” where the

137
vision is that Sweden will take up the battle with France as the country known for the best
food in the world.

Conclusion
An historical reflection on the status of milk in Northern Europe shows how ideas of health
and wholesomeness are bound up with social changes. It also points to how dairy products
have had an impressive capacity for being reshaped such that they were able to maintain a
unique position as a health-giving food. From the 1970s to the turn of the millennium, there
came a decline, in which milk become both dull and associated with unwholesome properties
like high saturated fat content. In recent years, however, milk appears to be on the road to
recovering at least a share of its lost position. The anti-fat trend is being replaced by an anti-
carbohydrate trend, and the drinking of caffè lattes has involved a way of drinking milk that is
once again viewed as attractive for a young generation. Of those strategies that the dairies
themselves have been actively working with, it is without doubt the concept of the natural,
small-scale, and local that has the most wind in its sails at present. But hi-tech health in the
form of functional foods has become an attractive niche as well. All in all, this might mean
that, as was the case after the findings on the danger of saturated fats had challenged its health
status in the 1960s and 1970s, milk is once again succeeding in getting out of the crisis and
consolidating its position as a healthy food. This does not mean that dairies and dairy farmers
can sit back and relax. For now they must begin to tackle the climate issue. How they deal
with the attention around the fact that cows are a major source of carbon dioxide emissions
will be important for their future competitiveness. This is a further illustration of milk’s
remarkable capacity for being at the center of social revolutions and, with that, also being a
remarkable point of entry for studying those very social changes.

References
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Responses to questionnaire LUF 75, Mjölkhushållning (Dairy in peasant society). 1950.
Responses to questionnaire LUF 212, Mjölken och jag (Milk and I). 2003.

Newspapers and Magazines

Kärnfullt
Mjölkspegeln

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Ränk, G. (1966), Från mjölk till ost. Drag ur den äldre mjölkhushållningen i Sverige (From
Milk to Cheese: Features of the Old Dairy Economy in Sweden), Nordiska Museet.
Stockholm.
Salomonsson, K. (2001), E-ekonomin och det kulinariska kulturarvet (The E-Economy and
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(The Milk Drop: Philanthropy, Patronization or Social Responsibility?), Carlssons,
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Internet Links
www.skanemejerier.se
www.primaliv.com
www.proviva.com
www.notmilk.com
www.hp-info.nu
www.snf.ideon.se
www.efsa.europa.eu

Material from the Internet

Dairies in Skåne: www.skanemejerier.se, www.primaliv.com, www.proviva.com
Not Milk: www.notmilk.com
Regulations for health claims: www.hp-info.nu (in Swedish)
Swedish Nutrition Foundation: www.snf.ideon.se (in Swedish and English)
European Food Safety Authority (EFSA), http://www.efsa.europa.eu/

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141
142
 8. From Corporate Threat to Brand Value The dairy firm
Arla and the environment challenge

Oskar Broberg

This chapter analyses how the Swedish dairy industry handled the environmental movement
in the late 1980s. The industry was challenged as the green movement held the industry
accountable for several adverse environmental effects and the environmental debate was
considered to be a threat to the industry. The chapter focuses on how the largest Swedish
dairy Arla dealt with three specific issues: a competitors’ launch of eco-labelled milk, the
debate on recycling and the possible use of sludge as plant nutrient. Arla took distinctly
different stances in these issues, but by the mid 1990’s they had all been incorporated within a
newly adopted pro-market approach. Especially important was the eco-labelled milk, which
was used in Arla’s strategic branding. This re-framing is interpreted as an incorporation of the
ecological modernisation discourse by the Swedish dairy industry.

To run a business and act responsible

Who is responsible for the external effects of modern agriculture and how should the market
for food be organised in order to handle these effects? These questions surfaced throughout
world in the 1970s, when the alternative movement raised their voice about the adverse
environmental effects of the industrialised agriculture (Vail, et.al, 1994; Castells, 1997).
During the 1980s and 1990s the critical voices were supplemented by pragmatic debaters,
arguing that the external effects also presented an opportunity for competitive-oriented
businesses:

Like it or not, the responsibility for ensuring a sustainable world falls largely on
the shoulders of the world’s enterprises, the economic engines of the future.
Clearly, public policy innovations and changes in consumption patterns will be
needed to move toward sustainability. But corporations can and should lead the
way, helping shape public policy and driving change in consumers’ behaviour.
In the final analysis, it makes good business sense to pursue strategies for a
sustainable world (Hart, 1997).

Hence, environmental problems could be turned into profitable business as long as consumers
shouldered their responsibility and presented a willingness to pay for clean technology and
new practices. This ‘optimistic turn’ of the environmental movement is referred to as the
ecological modernisation discourse (Jamison, 2002; Redclift, 2005). This divide of the
environmental movement also forms the basic conflict of this chapter: How do firms perform
the balancing act of running a competitive business and acting responsible at the same time?
The goal of this case-study of Arla – the largest Swedish dairy firm – is to analyse how the
general environmental concerns were translated into specific challenges for the dairy industry
to cope with, in the late 1980s and early 1990s. The most important challenges were eco-
labelling, recycling of packages and the use of sludge as plant nutrient. By raising these issues

143
the environmental movement emphasized the responsibility of the dairy industry to handle the
external effects of modern milk production and distribution. Hence, the industry was forced to
find a strategy; if the dairies were perceived to be responsible, how would they shoulder this
responsibility? What coping strategies did Arla develop to meet these challenges? To answer
these questions, the narrative is focused on the identification of actors and the interaction
between these actors. The focal point is how Arla perceived, and took part in, the formation of
a social discourse on corporate responsibility.50

The narrative
In the 1980s, the Swedish dairy industry was still an integrated part of a highly politicised
agricultural system. The system had developed during half a century and was characterised by
local monopolies, a regulated price-mechanism and an almost complete dominance for the
cooperative agricultural movement. Furthermore, the agricultural practices were strongly
influenced by ideas of rationalisation and intensification (Flygare, et.al, 2003). The situation
was similar in many European countries and it was a consequence of the politically driven
modernization of European agriculture, which took off after the Second World War, but the
political support for this regulated economy eroded after the economic crisis of the 1970s
(Vail, et.al, 1994). In this post-war setting the environmental movement was a marginal
phenomenon; it was external to the Swedish milk market, as it played no significant role for
the behaviour of producers, marketers and consumers. However, in the late 1980s the market
for milk in Sweden was challenged as this externality was exploited by actors within the
environmental movement. In short, the framing of the market for milk in Sweden was
challenged by two discourses in the late 1980s – one environmental and one market-liberal. In
the following the roots of these two discourses are described, after which the two discourses’
impact on the dairy industry are analysed.

Modern farming and the environmental discourse

The first wave of organic farming remained a very marginal phenomenon as it were at odds
with the strong structural transformation of the agricultural sector in the Western world after
World War 2. As the debate on agricultural practises re-surfaced on the political agenda
during the 1960s it did so in part because of the visible adverse effects of this structural
transformation. During the 1970s and 1980s the alternative movement won international
political recognition and the movement managed to establish ‘the environment’ as a political
category (Padel, 2001:40-61; Jamison, 2001). For the agricultural sector, this could be seen on
several accounts: the introduction of taxes on the use of pesticides and fertilizers; the large co-
operative retailer KF started to act for ‘poison-free’ food after demand from its members; the
alternative farming movement co-operated with conventional actors to establish a unified eco-
label – KRAV (The control organization for alternative farming) (Vail, et. al, 1994; Terrvik,
2001).

The dairy market and the market-liberal discourse

The environmental discourse represented a challenge to prevailing agricultural practices, but
an even more forceful critique shook the foundations of the Swedish agricultural system
during the 1980s. It was a critique of the regulative framework that emerged in the 1930s and
1940s (Vail, et. al, 1994). The market-liberal discourse of the 1980s overthrew this half-
century long framing of the agricultural system (Lindberg, 2007:213-229; Flygare, et.al,
2003). Bo Dockered, the chairman of the leading farmers’ organisation LRF, asked the

50
This chapter is based on Broberg, 2007 and Broberg 2010.

144
farmers in 1989 to reconsider their attitude towards the system of regulation. In the end, the
farmers voted for this change and the supporters of the old framework had lost its last
stronghold, in favour of a more market-liberal stance (Flygare, et.al, 2003). The board of Arla
internalised this market-liberal discourse as they implemented a new management system
focusing on (1) consumer-orientation and (2) branding (Melin, 1997).
Another sign of the dairy industry’s internalisation of the market-liberal discourse was the
launch of a new market organisation – MMAB [Mejeriernas Marknads Aktiebolag] – in 1989.
Based on the strength of its market share, Arla received most seats in the board of MMAB
and Arla came to dominate the organisation. MMAB was formed to co-ordinate overriding
market questions and generic advertisement.
By the late 1980s, a market-liberal discourse had been established among the top
management of LRF and the Swedish dairy industry. So, when the environmental discourse
gained ground, in the wake of the 1988 election, both LRF and the dairy industry responded
by using rhetoric of this market-liberal discourse. For example, when LRF published a
brochure on alternative farming it was concluded that LRF should have an open mind towards
the demand from the customers. The increased interest for alternatively produced foodstuff
should therefore be seen as a potential market niche and a complement to conventional
farming methods. However, there was no comparison in terms of environmental effects
between different methods of farming (Klara fakta 1988). The quality program for the
Swedish milk production, launched by the Swedish dairies in the autumn of 1988, was also
along these lines. There was a general reference to environmental concerns and it concluded
that production based on scientific facts and high quality would ensure that the Swedish dairy
industry remained competitive – but alternative production methods were not mentioned.
However, the challenge for the dairy industry became more acute in 1989, when the
environmental concerns were translated into more specific issues.

Managing the sludge

Because of the ban on fertilizers, the issue of plant nutrients takes centre stage in organic
farming. Night soil has traditionally been used as manure in different parts of the world
(McNeill, 2000). Therefore it was natural that the idea of using sludge as plant nutrient
surfaced when eco-label KRAV was formed in 1985 and the board of KRAV had to formulate
its position on farming practices. The problem was that even though the use of sludge seemed
environmentally friendly in theory, in practice the sludge was often contaminated by heavy
metals and other undesirable residues. Hence, KRAV banned the use of sludge as plant
nutrient on certified farms. Within the dairy industry the issue was brought to the fore in
1989, following a discussion initiated by the farmers’ organisation LRF. The board of Arla
shared the concerns put forward LRF and decided that the use of sludge would not be allowed
on farms that delivered milk to Arla. During the 1990s the issue returned several time and the
Quality Group of Arla continued to cover both the technical/scientific side and the attitudes
among the consumers. Though the technical side made progress Arla decided that the risk of
losing the confidence of the consumers were too big and the risk of negative publicity led the
board to firmly maintain its position during the 1990s.

The challenge of ‘alternative milk’ appears

In December 1988 the Swedish dairies acknowledged an increased interest for alternative
farming: ”The interest is a potential bomb that might detonate if KRAV-milk appears in the
mass media and if the sales of organic milk do well in Denmark.” It was concluded that the
issue of organic milk was strategically important and a working team met with the
management of Värmlandsmejerier – the only dairy actually planning a launch of KRAV-

145
certified milk. Värmlandsmejerier stated that the primary reason for the launch was they could
‘no longer tell the consumer what to eat, instead it is the consumer who will tell us what he
wants to eat’. To launch of organic milk was considered a way of targeting a group of
consumer who was willing to pay a premium for milk produced with ‘high demands on ethics
and production methods’ – and the KRAV-label enabled them to identify this group of
consumers.
On the industry level, Project Alternative Milk reported their work in March. The group
concluded that the definition of Alternative Milk was not absolute, but that the rules worked
out by KRAV could be expected to prevail. Furthermore, it was noted that it was important to
incorporate alternative milk into the conventional dairies’ organization, in order to minimize
the risk that information was distorted by the media and thereby posing a threat to
conventional production methods. A month later, in April of 1989, the group’s apprehension
of media came true. Älvsborgs-Posten published an article on Värmlandsmejerier’s plans to
launch KRAV-milk where the journalist accused conventional farmers to deliver milk from
sick and ‘poisonous’ cows. The article caused a stir within the industry and
Värmlandsmejerier was urged to postpone its launch, with the argument that more
information was needed. This negative attitude towards alternative milk also found its way
into Arla. At their next board meeting it was decided that Arla would actively seek to
persuade Värmlandsmejerier not to accept the KRAV-label, because of the potential negative
consequences that this could have for the milk sector as a whole. The situation worsened
when newspapers like Borås Tidning and Sydsvenska Dagbladet published articles on
‘poison-free’ milk (Borås Tidning 1989, ATL 1989, Svenska Dagbladet 1989). The dairy
industry answered the critique, arguing that there was absolutely no proof of any measurable
quality differences between alternative and conventional milk – the argument for alternative
milk was said to be wholly emotional. However, the dairies agreed that it was reasonable to
meet the demands even from ‘small groups of consumers with odd preferences’.
Another kind of argument was put forward in a report, written by leading representatives
of the cooperative movement.51 They had formed a group to discuss whether the movement
could engage in alternative production without threatening the general public’s confidence in
conventional production. They argued that the agricultural sector must accept that customers
were genuinely worried about the negative environmental impact of modern agriculture and
that the knowledge base was insufficient. The group also concluded that it was important that
alternative foodstuff was made widely available; the argument was that even if alternative
product was not bought to a large extent, it moved the responsibility to the consumer –
thereby there was less ground for ‘revealing’ media coverage.
When Värmlandsmejerier, despite the pressure from the other dairies, stuck to their
original time-table for the launch of KRAV-milk, MMAB decided to get involved. The
strategy was to steer clear of negative comparisons between alternative and conventional
milk. These considerations were formulated in terms of Värmlandsmejerier as a pilot study
for the other dairies, coordinated by MMAB. MMAB also questioned the role of KRAV;
when the first milk package was presented the question was raised if it was really necessary to
print the logo of KRAV on the package. To anchor its strategy among the Swedish dairies an
article on alternative milk was prepared by MMAB for trade’s paper, Mjölkspegeln. This
article showed how MMAB tried to strike a balance between encouraging the launch and, at
the same time, emphasizing that alternative milk was not a threat for conventional milk.52

51
The group consisted of Bo Dockered (LRF), Ulf Lundvall (SMR/MMAB), Ola Sand (SS), Per Sorte (SLR/Cerealia),
Birger Persson (LUI) and Torsten Andersson (LRF). Thorsten Andersson left LRF in 1990 to become chairman of KRAV.
52
Alternative milk was explicitly said not to be better than conventional milk and – referring to the experiences of Denmark
– the market was not expected to become larger than one per cent, (Mjölkspegeln 1989).

146
However, MMAB’s engagement was controversial. The board or Arla urged MMAB not to
engage economically in the launch and, as the day for the launch came closer, a conflict
between Värmlandsmejerier and MMAB emerged. The press release went back and forth
several times and MMAB managed to get several changes made: formulations were altered
and the alternative/conventional-conflict was played down. However, the most important
difference was MMAB’s role; in the first draft MMAB were mentioned in several paragraphs,
taking an active role in the launch. In the final draft MMAB was not mentioned at all in the
text and a quote from Bo Forsling, of MMAB, was now ascribed to Sigmund Lisecke, the
CEO of Värmlandsmejerier. Clearly, MMAB had decided to distance itself from the launch.
The 16th of October Värmlandsmejerier announced its release of alternative milk. In the
press release it was stated that the milk came from KRAV-certified farms and that
Värmländsk Kravmjölk AB – a subsidiary of Värmlandsmejerier – was responsible for the
new milk. This construction, with a separate company, was a result of Värmlandsmejerier’s
hesitant attitude. Despite the apparent front against the rest of the Swedish dairy industry,
there were contradictory views within Värmlandsmejerier. The marketing director of
Värmlandsmejerier argued that the subsidiary had to take full responsibility for the design of
the advertisement. But, whether they liked it or not, Värmlandsmejerier had quickly become
the symbol for the alternative milk in Sweden.53
In spite of the strong reactions that the launch of alternative milk had provoked, the
introduction was no success. The sales after three months amounted only to 0.5 per cent of
Värmlandsmejerier’s total sales. Though seemingly no threat, the board of Arla remained
skeptical towards the KRAV-milk. When the consumer cooperative, KF, in Örebro showed
interest in Värmlandsmejerier’s alternative milk, Arla and MMAB dodged the request with a
multiplicity of arguments: the sales in Värmland were very low, the evaluation of
Värmlandsmejerier had to be completed first, ‘competition-neutrality’ forbade them to deliver
to only one retailer, and the dairy shelf was already crowded. This lack of interest was also
demonstrated at Arla’s top level at the annual meeting in February; neither alternative milk
nor the environmental issue in general was mentioned in the opening speeches.
In short, just a few months after the introduction, there was actually a risk that the concept
of alternative milk would not survive – the challenge of alternative milk seemed to have been
successfully dealt with by the dairies. But, as it turned out, the issue of alternative milk did
not develop in isolation and the emerging debate on recycling came to the KRAV-milk’s
assistance.

The challenge of recycling appears

Already in 1988, in a motion to Arla’s annual meeting, a group a farmers demanded a change
to non-bleached paper in the production of milk packages. The argument was that the
agricultural sector should meet the environmental critique by actively seeking
environmentally friendly solutions on all accounts and during 1988 Arla implemented this
change. In 1989, a discussion started on the possibility to replace the single-use paper
packages and the board decided to investigate the possibility to sell milk in glass bottles. This
discussion also took place at the industry level, as MMAB organized a group that would work
out an environmental policy for the whole dairy industry. In the spring of 1990 the group
reported that the importance of the environmental issue had to be dealt with strategically,
because in the general recycling debate milk packages had become a symbolic issue. The
symbolic value was demonstrated when the Swedish Environmental Minister – Birgitta Dahl
– attracted media attention by visiting a supermarket in Värmland. Here she spoke on the

53
Conventional farmers in Värmland were provoked by the launch and when SLU organized a conference on alternative milk
in November 1989 the logo of the new milk was used on the front page.

147
importance of recycling of milk packages and she also argued in favour of the newly launched
KRAV-milk.
This debate was discussed at Arla’s board meetings during the spring of 1990. The issue of
packaging was complex, because life-cycle assessments were not unambiguous on what type
of package that was most environmentally friendly. It was concluded that the arguments were
mostly ‘emotional’ and therefore a pro-market approach was adopted; by test-launching
different packaging solutions, Arla would learn what packages the consumers preferred. CEO
Åke Modig concluded that in a market economy the consumer is always right, even when
acting on incorrect information. Thereby, the responsibility of the issue was moved from the
producer to the consumer. In 1991 Arla invested 3 million SEK in a trial for recyclable bottles
– testing both glass and plastic packages.

Arla’s change of mind (1st)

The media attention created by the recycling debate forced Arla to reconsider its strategy. To
combat negative publicity, the board decided to adopt a positive attitude towards KRAV-milk.
Arla’s board acknowledged a significant problem in the launch of KRAV-certified milk,
because such a launch would mean that Arla would invest in someone else’s brand. 54 For this
reason, Arla investigated the possibility of developing a competing eco-label, together with
KF. However, KF was not interested in developing a new eco-label since they were already
involved in KRAV. When the board of Arla learned that they would gain influence over the
label if the joined KRAV, it was decided that they instead would consider the conditions for
joining. Arla became a member of KRAV in 1991.

Arla’s change of mind (2nd)

In late 1990 LRF acted to make the dairy industry aware of the growing discourse on
‘corporate environmental responsibility’, arguing that an active stance in the environmental
issue could be translated into a valuable positive public image. In January 1991 MMAB took
a further step in this direction, when they published a report arguing that the Swedish dairy
industry should be positive to alternative milk and that MMAB should support – and check –
the dairies in their market communication. The disagreements with Värmlandsmejerier were
not mentioned; instead MMAB now described the launch as a joint-venture. The overarching
conclusion was that international and national experience showed that alternatively produced
milk could be a viable niche, without discrediting conventional milk.
KF in Stockholm continued to demand deliveries of KRAV-milk and Arla responded to
these signals. In April a new milk concept was presented to the board. This new milk would
be certified by KRAV, but it should not be referred to as KRAV-milk. Rather, it would be
called Eco-milk, alluding to ‘organic’ [in Swedish ‘ekologiskt’] more than ‘alternative’. The
milk package would look radically different from the rest of Arla’s product assortment. The
board approved the concept and the launch was set to the autumn. The advertisement would
be a joint-venture with KF.
In late August 1991 the first deliveries of Arla’s Eco-milk were made to stores in
Stockholm. The weekly amount of 20 ton of milk quickly sold out the first month, but
enthusiasm faded quickly when supply became larger than the demand in November. This, in
turn, made the board of Arla cautious. At the annual meeting, CEO Åke Modig declared that
Eco-milk was not a good deal for the dairy, but that it was important to show the consumers
that Arla met their different demands – organic milk was still more of a necessary evil than a

54
The idea of a private label was not new. In 1989, an advertising agency – Observera Annonsbyrå – had written a report,
suggesting that Arla should launch an eco-label, in the shape of a shamrock – to symbolize Arla’s leadership in the areas of
health, environment, and ethics.

148
strategic product. Instead, it was other actors on the dairy market that maintained the
momentum for the issue of organic milk in 1991 to 1993: Farmers in Värmland continued to
develop new products made from KRAV-milk, KF moved forward with its organic private
brand Änglamark, and several initiatives were taken to establish micro-dairies.

Dealing with the recycling challenge

In 1992 LRF published a visionary program – Swedish farmers, one step ahead – as an
attempt to merge together the environmental issue with the challenge for Swedish farmers to
stay competitive on the world market (Rydén, 2003). To avoid conflict with the alternative
farmers’s organisation a consensus document called The vital industry was written as a joint-
venture (Andersson, et.al, 1993).55 This document, in turn, led to the implementation of a
practical tool for conventional farmers to improve their environmental impact –
‘miljöhusesyn’. LRF described organic farmers as a spearhead for the development of
sustainable agriculture and the environmental issue was also pointed out as strategic challenge
in internal reports.
In late 1992 and early 1993 two leading environmental NGOs – Fältbiologerna and
Svenska Naturskyddsföreningen (SNF) – got a lot of media coverage in their action against
Arla’s new hard-plastic package for cheese, which was said to aggravate the waste problem.
In this action they also revealed that Arla did not have an environmental policy. Furthermore,
the NGOs demanded that the dairy industry made a nationwide launch of recyclable milk
packages.
After some initial success in 1991 with Arla’s glass and plastic bottles, the amount of
customers who chose these types of packages fell back, from 20 to 6-7 per cent, in the tested
areas. Therefore, the board of Arla hesitated to invest the 30-50 million SEK needed for a
large scale launch. In defence for this position they also repeated the argument that life-cycle
assessments did not show any clear-cut solutions in the packaging issue. SNF contested this
position and when SNF organised the ‘environmental-friendly-week’ in September 1993, the
recycling of milk packages was the theme for the campaign. This campaign was met by a well
prepared dairy industry and a press conference was held the same week, where a new method
for recycling paper packages was presented, in cooperation with Tetra Pak.
MMAB:s evaluation of the campaign showed that it resulted in about 70 articles in daily
newspapers. A majority of these rendered SNF’s arguments, but at the same time MMAB’s
and Tetra Pak’s launch received positive attention. On the whole the publicity was not too
negative for the dairy industry. After this, the dairy industry made no more attempt to sell
milk in recyclable bottles and in 1995 a report also showed an increase in the general
confidence that the use of disposable packages was an environmental-friendly practice.

Arla’s change of mind (3rd)

In 1993 the interest for “green” consumption increased. The recycling of milk packages was
only one sign of this. In May a government report [Konsumentberedningen] was released,
showing that the demand for organic foodstuff was growing and that retailers were expanding
their assortment – the large retailer ICA followed KF and launched its own organic private
label, Sunda. However, Arla’s sales of Eco-milk had dropped by fifteen per cent. In other
words, the field was open for the board to re-position Arla and thereby strengthen its position
as market leader.

55
The document was worked out in cooperation with the NGO The Natural Step,(Andersson et. al 1993) .

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The re-positioning included several steps: Arla started a new strategical partnership with KF;
Arla started a recruitment-process to get more farmers to become KRAV-certified; Arla re-
launched the organic milk with a campaign called The Milk of the Future [Framtidens Mjölk];
A research fund was started to promote the development of organic milk and Arla committed
itself to donate 500 000 SEK per year to the fund, for a minimum of five years. Finally, the
board appointed a group to work out an environmental policy for Arla and in 1994 the
company’s total environmental efforts received a prominent position in the annual report and
the first paragraph dealt with KRAV-certified products.
Arla’s campaign had direct effects on the market for organic milk. In 1993 2.8 million
kilos of KRAV-certified consumption milk was produced in Sweden and two years later this
figure had risen to 11 million kilos.56 During the same period of time, Arla’s number of
KRAV-certified farms rose from 24 to 135 – giving Arla at least 80 per cent of the market for
organic milk in Sweden. The commercial campaign was a success and Arla managed to find a
market for the milk. The problem was not to get the milk sold, but rather that some of the
farmers that delivered conventional milk to Arla got upset – they felt that the campaign for
organic milk discredited conventional milk. At this stage Arla’s board summoned the
experiences of the campaign and taken together it was considered to be a success. The sale
figures were good and a market research showed that the campaign had managed to connect
properties like health, environmentally friendly production and naturalness with Arla. The
board concluded that the campaign had strengthened Arla’s brand.
Arla’s defence of organic milk was also hailed by the board of KRAV. The board of Arla
seized this opportunity for goodwill and decided that the upcoming annual meeting would
have an environmental profile. An exhibition of Arla’s organic assortment was produced and
Karl-Henrik Robèrt, from the organization The Natural Step, was invited as the key-note
speaker. Robèrt spoke about the principles of sustainability, relating to the consensus
document – The Vital Industry – which had been worked out by the farmers in cooperation
with The Natural Step. Nils-Erik Johansson – CEO of the large retailer Hemköp – was invited
to the talk about their strategy on food quality. Johansson argued that organic food was
strategically important for environmental credibility of the industry and he also told the
delegates that Hemköp was certifying their stores according to the rules of KRAV.
To conclude, by 1995 still only about one per cent of the total milk sales in Sweden
consisted of organic milk. However, when organic milk became incorporated in Arla’s
strategic branding in 1993/1994, this laid the foundation for the further expansion of the
market for organic milk, both nationally and internationally. When the environmentalist Marit
Paulsen, in 1995, wrote critically about the quality of Swedish milk, Arla answered by
inviting her to attend the Quality Group’s next meeting and the board also proudly declared
that all of Paulsen’s demands would be met by the new quality and environmental standards.
This strategy was pursued, and after its merger with the Danish dairy MD Foods in 1999 Arla
MD Foods became the world’s largest producer of organic milk.

Concluding remarks
How do firms perform the balancing act of running a competitive business and acting
responsible at the same time? This chapter discusses how inter-organisational processes
during the 1980s and 1990s translated general environmental concerns into specific
challenges for the Swedish dairy industry and what coping strategies the board of Arla
developed to handle these challenges. The focal point is how the company perceived, and
took part in, the formation of a social discourse on corporate responsibility.

56
Statistics from Svensk Mjölk (Swedish Milk).

150
The environmental movement’s first assault on the dairy industry dealt with the use of sludge
as a plant nutrient. On the one hand it was seen as more ‘natural’ than fertilizers, on the other
hand there was a risk of contaminating residues. The board of Arla decided that the risk of
losing the confidence of the consumers was too big and therefore the company shouldered the
responsibility of banning sludge. This concern was shared by the organic farmers and even
though the issue reappeared several times during the 1990s there was never any real pressure
on Arla to accept sludge.
Secondly, recycling of milk packages became a symbolic issue for the environmental
movement because most families in Sweden consumed a lot of dairy products. The challenge
appeared in 1988 on Arla’s annual meeting. The pressure on the company heightened in the
early 1990s when leading environmental NGO’s conducted public actions against Arla and
propagated for buy-boycotts. The board pursued a two-fold strategy to handle the situation.
On the one hand the company launched small-scale trials with recyclable plastic and glass
bottles, to see if the consumers preferred these packages – they did not. Only six to seven per
cent of the consumers chose the new packages. Hence, the company successfully moved the
responsibility from the production side to the consumer side. Arla’s other strategy was to
cooperate with companies in the packaging industry to evaluate the environmental impact of
different packages. Arla used these evaluations very actively to answer the critique from the
NGO’s. Arla’s position was further strengthened when a new method for recycling paper
packages was launched in co-operation with Tetra Pak – after which the recycling issue
disappeared from the agenda.
The issues of sludge and recycling could be dealt with because the dairies could present
market reports and scientific analysis that settled the controversy. The issue of organic milk,
on the other hand, continued to be controversial, because of the uncertainties regarding the
external effects. Furthermore, both farmers and dairies had invested a lot of resources during
half a century to establish and maintain the prevailing mode of production. Therefore, it is no
wonder that the dairy industry in general and Arla in particular viewed the first eco-labelled
milk as a threat. However, during 1989 to 1993 the board of Arla gradually changed their
attitude; a change which can be attributed less to scientific analysis and more to business
strategies combining external and internal dynamics. Externally the pressure from
environmental NGO’s, journalists, and politicians had to be dealt with. Internally the
transformation of Arla from a monopoly- and production-oriented company to a market- and
consumer-oriented company altered the boards take on eco-labelled milk. Between 1989 and
1993 Arla acted defensively in relation to the environmental movement, but from 1993
onwards ‘environmental-friendliness’ was incorporated in Arla’s strategic branding and eco-
labelled milk was a important part of this re-orientation. To sum up, from a strategic point of
view, Arla shouldered the responsibility of organic milk once it had proven its potential of
becoming good business.
The internalization of negative environmental externalities changes the market, but not
necessarily in a contracting direction. On the contrary, the re-framing of the market for milk
showed that new value was created as the new frame capitalized needs and demands that were
not part of the market before – such as the willingness to pay for ‘cleaner environment’.
Therefore, it is important to see that when the Swedish organization for alternative farming
changed its name to organic farming in the early 1990’s, this was part of larger transformation
of the global environmental movement. This shift has been named ecological modernization
and merged two expanding discourses in the late 1980s – the market liberal and the
environmentalist. This transformation opened up for new alliances, not least between
environmental NGO’s and conventional businesses. Organizations like the Natural Step
worked as consultants for companies that wanted to strengthen their brand by incorporating
green strategies. As demonstrated in this chapter, this general process can be traced also in the

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dairy industry – a discourse of corporate environmental responsibility emerged in the 1990s as
a result of inter-organizational processes including actors like KRAV, SNF, LRF, MMAB,
Värmlandsmejerier, and Arla.

References

Newspapers
ATL, 1989, nr 24
Borås Tidning 890426
Klara Fakta, nr. 8, 1988.
Mjölkspegeln, (1989), Nr 4, www.svenkmjolk.se
Sydsvenska Dagbladet 890503.

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Andersson, R. and Helmfrid, H. (1993), Den livsviktiga näringen, Stockholm: Det Naturliga
Steget.
Broberg, Oskar. (2007) ‘To Do Business, to Practise Ethics, and to Produce Knowledge: The
Construction of ‘Organic Milk’ in Sweden in the late 20th Century.’ Food & History, vol.
5, 171-202.
Broberg, Oskar. (2010) ‘Labelling the Good. From alternative visions to organic branding in
Sweden in the late 20th century.’ Enterprise & Society , Vol 11, issue 4, 811-838.
Castells, M. (1997) "The information age : economy, society and culture". Vol. 2. The power
of identity, Blackwell, Malden.
Flygare, I., Isacsson, M. (2003), Jordbruket i välfärdssamhället 1945-2000, Natur och
kultur/LT, Stockholm.
Hart, S. (1997) ‘Beyond greening: Strategies for a sustainable world’, Harvard Business
Review, March, p. 67-76.
Jamison, A. (2001), The Making of Green Knowledge. Environmental Politics and Cultural
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Klara Fakta (1988) ”Alternativ odling, ekologi, ekonomi, marknad”, Klara Fakta!, nr. 8.
Lindberg, H. (2007), "Liberalizing Swedish Agriculture", Econ Journal Watch, 4, p. 213-229.
McNeill, J.R. (2000), Something new under the sun: an environmental history of the 20th
century world, W.W. Norton & Company, New York
Melin, F. (1997), Varumärket som strategiskt konkurrensmedel. Om konsten att bygga starka
varumärken, Lund University Press, Lund.
Padel, S. (2001), ‘Conversion to Organic Farming: A Typical Example of the Diffusion of an
Innovation’, Sociologica Ruralis, 41, p. 40-61.
Redclift, M. (2005) "Sustainable Development (1987-2005): An oxymoron comes of age",
Sustainable Development, 13, p. 212-227.
Rydén, Reine (2003) ”MEDVINDENS TID Ekologiska Lantbrukarna och jordbrukspolitiken
1985–2000”. Ekologiskt lantbruk, no. 36. Centre for Sustainable Agriculture.
Svensk Mjölk, Statistics, www.svenskmjolk.se
Terrvik, E. (2001), Att kanalisera hållbarhet. Hur dagligvaruföretag översätter miljökrav till
handling, Gothenburg University, Gothenburg.

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Vail, D., Hasund, K.P., Drake, L. (1994), The Greening of Agricultural Policy in Industrial
Societies, Cornell University Press, Ithaca, New York.

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Photo: Paulina Rytkönen, Farm dairy in Cantabria, 2009

Part IV. From Ancient Cultures to Modern Politics

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156
9. Traditional dairy practices in Cantabria

Eloy Gomez Pellón

Cantabria is a small region in the north of Spain, in many ways very similar to other parts of
northern Iberia, and in turn it forms part of the Atlantic façade of Europe. Its mountainous
landscape and its temperate, humid climate explain the permanent greenness of the scenery,
which until recently made it one of the most important cattle-farming regions in Spain. This
activity was carried out both in the coastal lowlands, in the north of the region, and in the
mountains in the southern part of Cantabria. Cattle-farming became important during the last
quarter of the nineteenth century when foreign breeds of cattle (Swiss and Friesian) were
introduced due to their special dairy qualities. Cantabria became quickly deforested, which
created a landscape that was almost exclusively composed by meadows. The traditional
breeds of cattle were gradually replaced by the new breeds, generating an economic activity

157
that became the reason why, between 1875 and 1980, Cantabria was known as the “land of
cows”.
By the end of the 20th Century the typical farming structure of the traditional smallholdings
had become inappropriate to meet the demands of modern farming, which led to the
increasing emigration from small villages to the cities. In 1986, Spain became a member of
the European Economic Community. The inability of Spain in general and Cantabria in
particular to compete in the common market against other member states that were better
prepared for the milk and dairy production of larger quantities with smaller costs, caused the
decline of the economic importance of dairy production in Spain.
The long history of dairy farming that in some parts of Cantabria is closely connected to
different ways of life is currently threatened by the shift of agrarian practices caused by
modernization and the Spanish EU membership. During the course of the last century, farmers
both in coastal areas and inland lowlands have attempted to break the bonds imposed on them
by their traditional subsistence regime, in order to slowly enter the world of commercial
agriculture (T. Ingold 1980; C. Gómez Benito and J. J. González 2002). Whereas farmers in
coastal areas steadily succeeded in their transformation, in the mountains the old ways of life
have prevailed, keeping some structures that date to ancient times. While the development
pattern of modern dairy production in the coastal lowland parts of Cantabria is fairly similar
to that of many other countries, the mountain production systems are unique to the region.
This chapter highlights the ancient dairy systems in Cantabria, their change over time, their
practices and products, partially offering an explanation to why some disappeared and became
absorbed by a modern industrial development and why some remained. The perspective is
both anthropological and historical and aims to mediate important knowledge about a part of
the Cantabrian traditional society that is a cultural heritage which is important to preserve.
The article is mainly based on the author’s previous research about the dairy sector in
Cantabria (see references).

Background - Conditions for Cattle farming in Cantabria

The physical environment is the main force behind the emergence of different production
systems in the mountain areas. The whole regional landscape is defined by its high-energy
relief, which produces interesting contrasts that make Cantabria one of the most mountainous
regions in the Iberian Peninsula. Even though the altitudes are not exceptional, the steep
changes in height over short distances are significant. The region is particularly mountainous
in its western sector, where heights of more than two thousand meters above sea level are
reached. The relief lowers slightly in the central area, and becomes more mountainous again
in the eastern sector. In this way, the mountains in the continental divide are only a step in the
transition between the coastal strip and the central Spanish plateau. In the westernmost part of
Cantabria, the Picos de Europa forms a line of mountain ridges that extend towards the east.
To the north the Marina is a gentle undulating landscape only occasionally broken by low
ridges, some of which are found directly on the coastline.
Between the continental divide and the sea, a series of mountain chains run perpendicular
to the coast, so that the relief of Cantabria consists of a number of parallel valleys that carry
the rivers born on the mountain ridges. The large flow of these rivers has excavated and
deepened the valleys, and divided up the province, creating sub-regions. These interior valleys
are true units from both the physical and the cultural points of view and they have been
inhabited since pre-historical times. Their inhabitants have focused on the exploitation of the
resources in their surroundings; which has produced intense social relationships and territorial
identities. Even if they have many things in common, they also show different characteristics.
The different identities can still be seen today when people of each valley share the same

158
customs and the way of speaking and the specialization in certain economic activities (E.
Gómez Pellón 2002 and 2008)
Until the late nineteenth century in the low and middle lands agriculture and stockbreeding
were complementary activities with a predominance of the former. The agrarian activity in the
farms was oriented towards cereal production for human consumption and the main product
was maize. In these areas, cattle-farming was only of a secondary importance and was aimed
to supply the demand for domestic consumption of dairy products. The excessively humid
climate and the structure of the farms (smallholdings with very small fields) was a limiting
factor to increasing productivity.
In contrast, in the mountains and some of the middle valleys, cattle/ dairy farming was the
dominant economic activity since the distant past. This was based on a regime of seasonal
transhumance, a type of mobile pasture systems that implies that different areas – sometimes
located at a distance from each other – are used for pasturing during different parts of the year
(Emannuelsson 2009:140). This system is practiced even today, although it is becoming more
and more unusual. The stagnation of this practice is due not so much to the system’s
inefficiency, but the hard living conditions and the poor financial rewards explain why the
mountain communities have ended up abandoning the occupation their ancestors. The current
remnants of the transhumance system in Cantabria bring together knowledge and experiences
transmitted by oral tradition. We know of it thanks to the evidence of the people who continue
to follow this way of life.
In other parts of Cantabria, different communities have kept dairy herds, but with a very
different strategy from the one mentioned above. These are the communities located in the
southern parts of central Cantabria, in the pasiego valleys. This wide area is specialized in
dairy farming based on nomadism. This strategy aims to make the best use of available
resources. In both cases, transhumance and nomadism, a declining and aging population
threatens to eradicate these ancient practices (E. Gómez Pellón 2002 and 2008).
In the lowlands of Cantabria, cattle-farming is the relatively modern way of life. There
dairy farming took over the dominant role of agriculture by the end of the 19th Century and
became a homogenous activity. In the southern sector of Cantabria, cattle-farming is a
traditional activity which, far from being homogeneous, adopts different strategies in different
areas (E. Gómez Pellón 1995: 257-290
Both intensive and extensive production was born out of rationality and both have shown
their adaptive strength and their versatility throughout time, although. Both aim to achieve the
best possible economic results. And these results are greater in the pasiego valleys than in the
western highlands. The reason is that in the former area, the farming has developed in an
environment which is favourable for the establishment of a level of intensification which is
not possible in the latter. This said, the hostility of both natural environments means that
farming is carried out in unusually tough conditions.

Transhumance pastoralism in the western mountains

In the area of the Picos de Europa, at the end of spring, the farmers take their herds to the high
puertos57, on the borders with Asturias and León, where they remain during the summer
months, when the lowlands are affected by drought. The lesser rainfall in this season takes
immediate effect in the bottom of the valleys and hillsides in Liébana, where the vegetation
has much in common with Mediterranean types, causing dry conditions very different from
the situation in the puertos. Here, the dampness of the mist and low night temperatures keep
the pastures fresh, so that in summer they become a key part of the famers’ economic
organization.

57
Natural prairies suitable for grazing located at high altitudes.

159
Each spring, these puertos are filled with life when they receive the herds from the villages,
although they still consist of several hundred heads of cattle, they are much smaller than they
used to be. The success of the lowlands in cattle-farming oriented at milk production, using
foreign breeds of cows, has greatly reduced the tradition of transhumance. Nowadays, this is
only practiced in those areas that are unsuitable for modern dairy-farming.
Both the arrival and the departure from the puertos are subject to a common law that
establishes the basic rules allowing the general and common use of the pastures. For example,
the herds from the Saja valley are allowed to go up the Puerto de Sejos in the middle of June,
a month after the farmers from the area of Campoo. The date of the arrival of the herds is
determined by the altitude of the areas of pasture, which explains the delay when they lie at
over 1,600m above sea level. The traditional celebration of the feast of San Juan58 has left its
mark in the herders’ common law, and June 24 is one of the key dates in the movements of
the farmers in western Cantabria. The custom of this ancient practice stipulates this day as the
day when the snow melts and the fresh grazing that their herds will make good use of is
uncovered.
In the same manner, the start of the return of the herds is marked by the first cold weather
in autumn, during late September or early October, when the temperatures start to fall. The
departure from the pastures always starts from the highest located puertos. These too are
carefully regulated by common law and usually take place between the feasts of San Miguel
(September 29) and San Lucas (October 18). The time span between these dates also
coincides with the most important traditional cattle markets. The autumn markets are always
more important than those held in the spring, before the cattle leave the puertos.
Although the departure and arrival of the herd might have lost some of their previous
importance, these occasions used to be very important for the local communities. The
departure to high altitude pastures meant breaking up, both for the cattle and people, as their
way of life changed for several months. The return was a reason for celebration, as the cattle
returned shining with health. This meant economic benefits for the owners of the cattle and
for the herders it marked the return after a long time away. The loud clanging of the cowbells
and ringing of the handbells also announced the imminent arrival of the autumn and
consequently the winter. Everyone came out of their houses to watch the return of the herds
and the farmers, and the villages were enveloped by the hubbub of the festivities. For many
years this practice was forgotten, but the nostalgia for these festivities led to their revival a
few years ago. Clearly, neither the economic nor the social meaning is the same.
The importance of seasonal transhumance in the life of these farming communities in the
highlands of western Cantabria is clearly illustrated by the high level of institutionalisation of
the activity. Over the centuries, common law has woven a corpus of rules, and if these are
broken, several punishments have been carefully prescribed. The precision of these rules led
them to be put down in writing some centuries ago. This can be understood better in the light
of the ancient contests between these communities for the use of the pastures. This
competition can perhaps be illustrated by the colonisation of these areas by Neolithic
societies, proven by the megalithic remains discovered in the puertos of Áliva and Sejos.
Furthermore, the need for the farming communities to work together not only forced them to
write down the rules governing the custom but in some cases this took place at such an early
date as the late Middle Ages. For example, the first regulations for the common use of the
Puerto de Sejos was drafted in the Concordia of 1497, and similarly, for the Puerto de Áliva
in the Ordenanzas of 1494.
These are rules born out of the need to govern the transhumance, which according to the
classic typology proposed by M. Derruau (1964: 123-131) may be classified as ascendant, as
it is the farmers in the lowlands who use the pastures on high ground. In the no less classic
58
Every year the day of San Juan is celebrated to commemorate the arrival of the summer.

160
typology of F. Braudel (1949), laid out in his famous work, La Méditerranée et le monde
méditerranéen à l’époque de Philippe II, this French author calls this form of transhumance
normal. It is a local type of transhumance that crosses municipal boundaries, as the farmers
often go outside their own municipality to use the high pastures, which are usually common
land. This is a form of transhumance over short or medium distances that aim to optimize
farming by using ecological niches within a valley.
Existing sets of common law, in the case of the western mountains, show that in the late
Middle Ages, the use of the puertos was already of great importance and had become
institutionalized. The rules of the common law have been slightly modified over the centuries
and adapted for coping with new situations, but their main essence is still the same. The
institutionalization of the common pastures has survived in the western mountains of
Cantabria for obvious reasons. In the rest of the region, including the area of the pasiego
valleys, common land began to be colonized in the 18th century and became fully privatized
by the beginning of the 20th century. However, in the west of Cantabria, the location of the
puertos (at high altitude) functioned as a defensive barrier, helping to preserve them as
common land.
The regulations governing the common pastures in the puertos aim to guarantee the
grazing rights while prescribing a series of duties to ensure the collective of farmers make
good use of the land. The guarantee of use is determined by the historical linking of the
puerto to a number of villages. This link may be expressed simply by oral tradition, or may be
contained in a written document such as Ordenanzas and Concordia. Since these areas of
pastures generally extend beyond municipal boundaries, their use is carried out within a
common system, which means that the grazing is used by several municipalities or
administrative bodies. In this way, the farmers belonging to these municipalities are able use
the puertos with equal rights. Due to the complexities involved in the system, the
institutionalization of farming practices especially those associated with grazing became a
necessity.
The puerto is a precise area of land, marked out by boundary stones, which allows the
users to know the area that their rights apply to, while indicating to those without these rights
the boundaries they should not cross. To preserve these boundaries, the regulation consisted
of keeping strange cattle from entering the common pastures. The captured cattle are only
returned when their owner pays the stipulated compensation. This institution is therefore the
most frequently used form of non-judiciary forfeit and it is most often practiced in the
common land at lower altitudes, where villages and municipalities try to protect their rights
against their neighbours. The right to use the grazing in the puertos is shown by the tags that
are burned on the cattle. The tags are burned on the cattle using the marco of the owners
house, which is normally their initials, applied with a red hot iron to the animals’ rear end.
To gain access to the rights of grazing, the farming communities must accept a number of
obligations aimed at making good use of the pastures. Until the late 1960s, the herding
activities were done by cowherds. When the time came for the animals to go up to the
pastures, the communities, through their councils and corporations, hired professional
cowherds who offered to do that task. In return for his work the herds were paid. In the past
the salary was in kind, and more recently it was monetary. Each cowherd took charge of
looking after all the cattle from a village, a task that sometimes required more than one person
if the number of cattle was large. The cowherd was responsible for taking care of the cattle
the whole time they stayed in the puerto, and also during their move from and to the village.
When needed, assistants were hired to help out. In the western parts of Cantabria, in Liébana
and Campoo, as well as the Nansa and Saja valleys, it was also common practice for the
owners to assist the herders with their task (this was a regulated obligation). The farmers took
turns one by one and assisted the herders in a strict order according to the houses in the

161
village. This was called the vecera 59. In other places, for example in Vega de Liébana, it is
called corruda. The cowherds and veceros, slept in rudimentary huts, circular in shape with
thick stone walls and false dome, with just a hearth and rudimentary cot to sleep on.
The cowherds disappeared during the 1960s. This made the vecera a very important
institution, as the owners, the veceros are the ones that take care of the cattle. Thus, the
regime of seasonal transhumance has been able to continue into the twenty-first century,
although in a much weakened form. This is the result of several institutions that converge in
this particular farming system. Nonetheless, it is clear that in the places where these
institutions still exist, they are starting to show signs of weakness. Nowadays, the vecera is
carried out as short visits made by the vecero travelling to the puerto in some kind of motor
vehicle.
Another practice connected with the common use of the pastures is the sel, a small corral,
usually of a round shape located inside the area of pasture. The sel is used to shelter and
protect the cattle, and to detain strange cattle outside. These corrals are usually built with
stone walls, with a tree or standing stone in the middle. In order to carry out their function
they normally only have one gate. The sel was, and still is, an inseparable part of the
economic organization based on semi-extensive pastoralism. Sel’s are used both for the
animals’ rest during the day and to provide their safety during the night.
The high pastures ensure the cattle’s feed during the summer, when they are short of food
in the lowland. The puerto is the culmination of a series of ecological spaces used in the
annual cycle of hearding. Below the puertos other areas are given different names in different
places, but they are most often denominated as dehesas. These are special grasslands used for
cattle that have difficulties moving over long distances, such as pregnant cows. At the end of
August the cattle begin their slow descent, first to the dehesas where they mix with the cattle
already grazing there, and from there on all cattle is brought down to the village together. The
herds made up of cattle, and occasionally also of horses.
The herds of smaller animals, consisting of sheep and goats, only occasionally coincide
with cattle and horses. These smaller animals, called reciella in Liébana, spend most of the
summer in lower ecological niches that are also part of common land. In the latter part of the
season, they are moved to higher altitudes, but as far as possible they are kept apart from the
larger animals.
The final destination of all the cattle in their descent from the high pastures is the village,
with the family homes, stables and barns that are located nearby. The latter hold the cattle
during much of autumn and spring. They are generally rectangular with a gabled roof and two
floors. The ground floor is occupied by the cattle and the first floor is used to store the hay.
This hay was cut while the animals were in the puertos and provides feed during the winter.
The stables in the farmhouses also have haylofts, storing the hay gathered in early summer, in
the meadows on the hillsides and by the river, mown by scythe.
A further practice connected with this farming regime is the vereda, which is the public
right of passage for the herds. The immediate surroundings of the villages and the common
land possess a network of tracks as well as rights of way across private land. These are routes
that have been used by the farming communities since ancient times, and have reached our
time with full rights for the movement of the herds. These rights are limited with the
obligation of not crossing the sides of the tracks and avoiding any damage to bordering land,
whether and these limitations are the same for private and common rights. Similar rights of
way used in the transhumance of herds exist across the whole of southern Europe. These
routes are governed by strict regulations that are a heritage from the Roman calles pastorum.
(Matley 1968: 231-261).

59
The word vecera originates from the word vez that means turn in spanish.

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In the west of Cantabria, it is also usual for some of the hillsides near the villages to be
devoted to large common meadows. They are always meadows, and not grazing, and are
therefore scythed. Each year, this common land is divided into suertes or portions, depending
on the number of farmers in the village, and then in a public meeting the council shares them
out by drawing lots. These meadows produce grass of an excellent quality, although due to the
altitude they only produce enough to be mown once a year. Once they have been cut during
the summer, the suertes of the different farmers become once again common property,
belonging therefore to the administration of the council (E. Gómez Pellón 2005).
All the mentioned rules and practices play a vital role within the system based on seasonal
transhumance. The economic and social activities generated within this system are regulated
within this institutionnal setting. They are the expression of social consensus hammered out
over time and a prime example of customs developed for centuries. This same consensus has
created the necessary mechanisms to smooth out the difficulties and tensions arising between
private and collective rights.

Nomadism among the cattle-farmers in the Pas Mountains

The farming and resource utilization strategy established in the highlands in western
Cantabria is completely different from the system used in the Pas Mountains. These
mountains, are located in the souteastern part of Cantabria, and reach lower altitudes than the
western mountains. It is possible that here too, in the past, the use of the natural resources was
extensive or semi-extensive. However, a long time ago, the farmers in the Pas Mountains,
who are known as pasiegos, adopted the practice of keeping their cattle indoors. This system
was gradually improved and became institutionalised during the first half of the nineteenth
century (E. Gómez Pellón 2004 and 2005). Another production system that uses confinement
of the cattle in barns is the intensive low-land system; however, the pasiego is very different
from that implemented in the lowlands. The landscape of the Pasiego valley reveals an infinite
sequence of meadows, each one surrounded by a drystone wall. The enclosed meadow might
be said to be the essence of the system, as each one is a small pastoralist universe.
Each pasiego cattle-farmer owns a number of fields that are distributed over the hillside,
from the bottom of the valley to the top of the hill. The fields are therefore located at different
altitudes, covering a large range of ecosystems. The stone wall does not only enclose a field
but also a barn. They are all very similar and are built in such a way to make use of the slope
of the hill. They are all rectangular, with a gabled roof. The front wall is also unusual because,
unlike all other farmhouses in the region, it is located the short side that faces south. The side
walls of the house are prolonged to make a rudimentary balcony on the upper level, while
gaining a space at ground level that can be used in different ways, from keeping animals to
sheltering the farmer while he carries out various tasks on rainy or cold days.
The ground floor is used to stable the animals, while the first floor is used both as a hay
loft and as the family home, beginning with the kitchen. The access to this floor is not through
the ground floor, but by outside steps lead directly to the balcony, which becomes a transition
area before going indoors. The cattle-farmers always own several barns, each one in a
different field. However, they are not all of the same size, nor laid out to the same standard.
The largest and best built are those in the valley bottoms, and these are the ones occupied for
the longest part of the year during the cold months by the farmer and his family. These barns
are called vividoras.
After the winter has been spent in the vividora, the family and their cattle start to move.
During the following months, they will change barn whenever the grass surrounding it is
finished, and thus, as the summer advances the pasiego families move towards the barns at
higher altitudes. The small size of the meadows means that their stays are not too long. Each
move, or muda, as they call the change of home, involves the difficulty of moving people,

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animals, belongings, tools and all other everyday items that the family needs. When they have
reached the highest barn, they start to go down again, travelling back to all the meadows
where they had previously been. The economic strategy characterising the pasiego valleys is
defined by the intensity of this land use.
The scythe has been the essential tool in the life of these people, who try to make the
maximum use of their meadows. Each field is used with great care, cutting the grass as many
times as possible to obtain the greatest yield. The fields are grazed when it is not possible to
mow them, and this tends to happen in late autumn or early spring. As they are experts in their
environment, continuous stock-rearing has taught them how to obtain the highest possible
yields, with no limits apart from the physical conditions. The strategy has also shown that its
efficiency cannot be questioned, no matter which side of the mountains they are on, to such an
extent that rather than forming a barrier, the mountains have contributed to uniting people
who share the same activity. Both the southern and northern sides of the mountain range are
occupied by an identical landscape of drystone walls and rectangular gabled barns. This
particular economic organization has led some pasiego families to have meadows and barns
on both sides of the divide. The pasiegos obtain their main income from the sales of dairy
products such as cheese and butter, which they have commercialized attending markets and
fairs for many generations.

Animal breeds and grazing practices

The cattle-farming practices described above have been consolidated for centuries both the
western and the eastern mountains in Cantabria. An important condition for these practices
has been the development of cattle breeds that are well-adapted to the environment. It should
be pointed out that the specialization in cattle-farming has been much great in the pasiego
valleys than in the western highlands. In the latter, despite the importance of cattle, other
animals, such as sheep and goats also play a significant role. The animals take part in the
exploitation of the puertos, and their action is perfectly integrated and regulated by the rules
of common law. In contrast, in the pasiego valleys, dairy-farming is the most important
foundation for the family income, therefore the role played by other kinds of livestock is less
significant (E. Gómez Pellón 2004 and 2005).
The western farmers often refer to the sheep and goats with the generic term of reciella,
and each individual animal, of either species, is given the name of recillo. The goats belong to
the Pyrenean breed and are very well adapted to this part of the region and they require a
small amount of food, which made goat keeping a profitable business in the past. Today goat
farming is in recession. In contrast, sheep were always important in this part of the Picos de
Europa, and their number has increased in recent years. Since the farmers average age is
generally increasing, they now prefer sheep because they are less mobile and easy to look
after. Furthermore, the sheep in this part of western Cantabria are very well adapted. The
constant cross-breeding which this animals have undergone, has played an important part in
this process. It is today difficult to find characteristics of particular breeds. They are always
small, very agile, and their water-repellent layer helps to protect them from the hostility of the
environment.
The main breed for cows is the tudanca, a breed that can cope with the steep terrain of the
mountain. This autochthonous breed originates from the upper valleys of the Saja and Nansa
rivers, and obtained its name from a village located there. A similar breed can also be found in
the valleys of Liébana and Campoo.60

60
This is not the place to discuss whether they are varieties of the same breed or different breeds whose
resemblance is due to their adaptation to a similar environment. That discussion is left for the experts in genetics.

164
 The tudanca cows were historically kept for their strength and used for heavy labour in the
mountains. The animals are small in size but have powerful limbs. They are characterized by
their large horns. One unmistaken detail is the white fringe around the bulls’ nose. The darker,
almost black coat of the bulls contrasts with the clearer tones of the cows. While the tudanca
breed has some superior physical conditions for a mountain based system, the extremely low
yields of around 900 litres per year have meant that farmers, also in the mountain preferred to
mix tudanca with imported breeds. The poor productivity led to the decline of this breed over
the last decades. Between 1955 and 1982 the population of Tudanca declined from 28
thousand to 10 thousand heads (Rytkönen 2012: chapter 4).
In the western highlands, the main foreign breed is the Swiss cattle that were introduced in
Cantabria around 1865. The acclimatization of the brown Swiss was immediate. Their
resistance, their easy handling and their economic viability soon made them popular. Their
ability to produce large yields and suitability for meat production was attractive for all
farmers, including the transhumant’s in the west who saw in this breed many of the qualities
lacking in the tudanca. The final result was not only the addition of Swiss cattle to the herds,
but also a progressive hybridisation that has steadily transformed the appearance of the cattle.
The economic success of the farmers in the pasiego valleys is at a large extent dependent
on the adaptation of the Swiss breed. Before the introduction of the Swiss breed into
Cantabria, a breed called pasiega was the main breed in the valleys. These were small cows,
with slender horns and a reddish coat that produced high quality milk, but in small quantities.
Consequently the change in breed took place with the purpose of increasing output; therefore
not only the Swiss breed was introduced during the 1860s, a few years later also the Friesian
breed was introduced. The success of foreign breeds, especially of the Friesian, led to the total
extinction of the pasiega. (Gómez Pellón 2005).
This trend follows the general trend of the entire country where autochthonous breeds
disappear and are replaced by Frisian cows (Garcia Dory 1988:53). In the Pas valley, the
Friesian cows became dominant. This led to a dramatic improvement of productivity and the
abandonment by most farmers of the nomadic practices and the traditional elaboration of
dairy products, in favour of deliveries to the dairy industry.

The products
Cheese-making is even today the most important type of dairy production the mountain
transhumance culture. The picón cheese is still made with traditional techniques, including
leaving the cheeses to mature in natural caves, especially during the time that the livestock
spends in the summer pastures. This unusual cheese, made from “three milks” (cow, goat and
sheep) is presented in a cylindrical shape, grayish and coloured with the blue of penicillium.
Another cheese is the “smoked” cheese from some valleys in Liébana, previously made from
three types of milk, but now mostly produced with tudanca milk and smoked in caves beech
wood. During recent decades some important changes have occurred concerning the
elaboration and consumption of cheese. In previous times all products were sold in markets at
low prices and were exempted from the control of the authorities. After Spain became a full
member of the European Union, the cheeses named above became certified within the
European quality scheme for denominations of origin. This led to a redefinition of the
products as they underwent a conscious, state-led process of valorisation. In previous times
the cheeses were seen as low quality artisanal products. Today they are seen as premium
products used to promote tourism and rural gastronomy. The valorization was partly achieved
through information campaigns directed to the public, education of the producers, and a
modernization of the curding practices (that are now made in state of the art micro dairies, but
the smoking and maturation is still made in caves), marketing campaigns and the activation of
secondary stakeholders, such as restaurants and hotels in the promotion of the cheese as a

165
cultural and culinary heritage (Rytkönen et al 2011). Other traditional products have also
become certified within the European quality system and been upgraded. The traditional bread
produced in the Pas valley, the sobao pasiego and the meat that in previous times was seen as
a side product are both now certified as protected geographical indications and used in the
marketing of Cantabria as front figures for the entire region (ODECA).
One of the products that disappeared before the valorization of traditional artisan food
started in Cantabria was the pasiego-cheese. This fresh and soft cheese, not pressed and in the
shape of a disc is characterized by the by the deep grooves it gets as it is left to mature on a
bed of reeds. Some of the reasons behind the disappearance of this cheese are the extinction of
the pasiega breed, but also the fact that pasiega cows were replaced by Friesian cows, which
stimulated a shift from traditional production to a modern and intense industrial system.
For the transhuman communities, the shift towards an intensive production system was not
possible, because, in spite the abundance of the high pastures and their capability of
maintaining considerably larger numbers of animals, the size of the herds is determined by the
restricted capacity of the low lands. Larger herds would force farmers to import large amounts
of forage and fodder to keep the livestock during the winter, which has not been an
economically viable option. In short, the natural conditions imposed a limitation that became
an obstacle to expansion and modernization.

Concluding remarks
This article has contrasted the different strategies used by nomadic and transhumant cattle-
farmers in Cantabria, with those of the farmers whose livestock is kept permanently stabled.
The optimization of use achieved by the nomadic strategy followed by the pasiegos has great
advantages, but also some serious disadvantages. First, it is clear that a large production is
achieved by a much greater investment in human labour than in the permanently stabled
strategy. The passage of time has increased this difference enormously as the difficulties
involved in introducing modern machinery to alleviate human labour have been found to be
insuperable. Second, the nomadic strategy, although it is an improvement on seasonal
transhumance, is an obstacle to agricultural production for use in cattle-farming (maize,
artificial meadows, etc.) which is important aspect of the stabled strategy. Finally, the
nomadic strategy is contradictory with the requirements of modern cowsheds, which are able
to guarantee both the care and protection of the livestock and a reduction in the farmers’
labour costs.
In conclusion, the pasiego system, exhausted after the effort made throughout the twentieth
century to obtain productivity comparable with that of the modern zero-grazing system, is
now seen as unsuited to the necessary modernisation, just as occurred some decades ago in
the case of the western highlands. The environmental conditions have finally been shown to
be incompatible with the requirements of modern dairy-farming and the needs of European
markets. Modernisation in this case would involve the creation of a new economic system
which, without doubt, would relegate dairy-farming and convert it into a merely residual
activity.
From all that has been said, it can be deduced that the productive systems of the
transhumant pastoralists and the nomadic pasiegos have reached the present, although the last
few decades have been for both of them a time of increasing difficulties, which has placed
them on the verge of disappearance, particularly in the case of the transhumance. This makes
both systems authentic relics of a remote past that succeeded in reaching the late twentieth
century with great vitality, but which were steadily undermined by their inability to
modernize, in the way that coastal areas and the middle valleys did so intensely from the
1960s onwards. However, the fact that these two ways of making efficient use of the
resources provided by the environment have reached, even if it is languidly, the early twenty-

166
first century, should make us pay more attention to them. We must be aware that it is still
possible to study them in detail that they are still alive, and the men, women and children are
still present, additionally forming part of a modern society with values that question their old
ways of life.
At the same time, there is no doubt that both the seasonal transhumance that the farmers in
the western mountains continue to practice, and the short-distance nomadism that farmers in
the Pas area of eastern Cantabria still carry out, have enabled the conservation of scenery of
great environmental value. This has also been the result of the human populations living in
these mountainous regions who, through their productive interaction with the environment,
have exploited their valuable natural resources without impoverishing them, creating the
corresponding cultural landscapes. Thus, population loss and the aging of the population
endanger the survival of these ways of life and, at the same time, the conservation of the
biodiversity.

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diferencias culturales, México: Fondo de Cultura Económica.
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Braudel, F. (1949). El Mediterráneo y el mundo mediterráneo en la época de Felipe II,
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Castán Esteban, J. L. y Serrano Lacarra, C. (2004). La trashumancia en la España
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Derruau, Max (1964). Tratado de geografía humana, Barcelona: Ed. Vicéns Vives, 1964.
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Garcia Dory, Miguel Angel och Martinez Vicente, Silvio, (1988) La ganaderia en España,
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Gómez Benito, C. y González, J. J. (2002). Agricultura y Sociedad en el cambio de siglo,
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C. Gutiérrez-Cortines Corral, Desarrollo sostenible y patrimonio histórico y natural. Una
nueva mirada hacia la renovación del pasado, Fundación Marcelino Botín, Santander, vol
II, pp. 43-87.
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pasiegasa”, en G. Lasaga Larreta, Los pasiegos, Santander, Universidad de Cantabria y
Consejería de Cultura del Gobierno de Cantabria, pp. 45-90.
Gómez Pellón, E. (2005). “La buena vecindad y la ayuda mutua en medio rural de Cantabria”.
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895-927.
Gómez Pellón, E. (2008). “Cambio y crisis en el medio rural de Cantabria”, en J. J. Mazón
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Ingold, T. (1980). Hunters, Pastoralits and Ranchers. Reindeer Economies and their
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170
 10. Gailtaler Almkäse – Regional development through
Protected Denomination of Origin (PDO)

Karl Gratzer
Austria became a member of the European Union on January 1st, 1995. Already before the
membership had been formalized, the Austrian authorities took measures to reinforce the
competitiveness of the firms in the countryside. One of the tools thatwas used was Protected
Denomination of Origin (PDO) and Protected Geographical Indication (PGI) certification of a
number of food products. This case study is the story of how a cooperative consisting of 14
cheese producing mountain chalets succeeded in creating a strong trademark by getting their
product PDO-certified. This led to an increase in the profitability of the firms and reinforced
their ability to survive. By organizing food-related festivals, tourism, gastronomy and trade
became interconnected, which created an important regional value added. The currently
regionally and nationally well-known product from the mountain pasture cooperative is
marketed under the trademark ”Gailtaler Almkäse”. The name of the product refers to the
sparsely populated valley ”Gailtal” in the federal state of Kärnten in southern Austria.
The presentation of the cheese production in Gailtal begins with a background description
of the regional location of the area and its economic and demographic situation. Then, there is
a short description of the historical organization of the system of mountain chalets in Kärnten,
its conditions for production and its current extent. The actual period of study covers the
period from the establishment of the PDO-project in 1995  the year of Austrian entry into the
EU  until the year 2010. Finally, a few examples are provided of how festivals focusing on
locally produced food products have been created with the aim of increasing the regional
value added of locally produced food products.
The aim is to describe how the project of applying for a Protected Designation of Origin
for locally produced food products and other related activities was introduced and carried out
in the federal state of Kärnten. We would like to describe how this project was financed and
what organizations were the driving forces in the process. With the answers at hand, we know
that the project has been successful and viable. Thus, in various EU contexts, it has been
emphasized as a best-practice project. Another reason why we chose to study this particular
project is that it illustrates how a strategy against the negative effects of globalization on
development in the countryside can be designed. Depopulation, closure of firms and a
decrease in the competitiveness in the countryside as compared to cities have lately been
subject to increased attention.
The project ”Gailtaler Almkäse” is considered by local agents to have prevented the
closure of agricultural firms and workplaces and to have succeeded in creating new activities
within tourism, gastronomy and trade. The total yearly production of cheese is relatively
modest and amounts to an annual total of about 60 000 tons. The value added of the cheese
production is considered to be considerable for the 14 producing family firms since the
closing down of farms is thus prevented. For the region as a whole, the economic importance
of cheese production is considered to be relatively small. What is of economic importance for
the region is the value added that is created by closely related food activities and their positive
impact on tourism, restaurants and handicraft. Thus, the study also describes how, by
organizing culinary festivals, the region has succeeded in connecting the production of locally

171
produced food products to tourism, gastronomy, trade and handicraft. Consequently, a
regional value added has been generated which, according to many evaluators, largely
exceeds the value that is generated by the cheese production itself. The marketing activities
were initiated and dealt with  just like in the earlier PDO application  by national
government and regional authorities and organizations. These are some of the reasons why the
project is often put forward as a ”best practice” at the national and international level. One of
the main reasons why we chose Gailtaler Almkäse as a case for our study is that Kärnten was
awarded the prize for ”best practice” within the EU-project ”Interreg III Alpine Space Regio
Market” 2006-2008. Interreg, financed by the European Regional Development Fund, helps
regions of Europe share knowledge and transfer experience to improve regional policy
supporting sustainable regional development. The aim of the Austrian Interreg project was to
improve the regional economy by developing trademark and marketing strategies for agrarian
locally produced goods and to benefit small firms in the Gailtal valley. 18 regions from seven
different EU-projects participated in the project. Of interest in this context is that it was the
federal state of Kärnten that took an entrepreneurial role in a proactive way. Already before
the start of the Interreg project, the agricultural chamber of the federal government of Kärnten
established an administrative unit with the task of preparing the participation of the country in
the Interreg project in 1998 (www.regiomarket.org 2010).

Gailtal – geographical location, the economic and demographic situation

All 14 mountain chalets are located in a political administrative district called Hermagor. The
administrative district consists of 7 municipalities, one of which is a small town (Hermagor)
and is located in a region that is called Ober Kärnten. The most important areas for
interconnected habitation are situated in the valley along the river Gail and its tributaries
(Lesach- and Gitschtal). In the north, Gailtal's border consists of Gailtaler Alpen and in the
south; Karnische Alpen constitutes a natural geographical border towards Italy. There are only
two minor regional passages across the frontier to Italy (Plöckenpass and Nassfeld).
The number of inhabitants in this barren, alpine part is far below the average for both the
federal state of Kärnten and Austria. The capital of the region, Hermagor, is followed by the
small market town of Kötschach-Mauthen, the most important center for employment in the
area which is dominated by tourism (in particular by the skiing region Nassfeld). In total, 75
% of all employed individuals and 55 % of all inhabitants live in these two municipalities.
Another disadvantage for the region is that its peripheral labor market does not have any
connection to the supraregional and national traffic system.

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Picture 1. The mountain chalets of Gailtal

Graphics: Madeleine Bonow

Table 1.Inhabitants and unemployment in Hermagor, Kärnten and Austria 2012.

Hermagor Kärnten Austria
Inhabitants 18 900 557 700 8 993 500
Share of women 52 % 52 % 51 %
Unemployment 3,3 % 6,9 % 6,1 %

Inhabitants 24 59 99
per km2
Source: Arbeitsmarktdaten nach politischen Bezirken Juli 2012. Statistics Austria. Own computations.

As appears from table 1, Hermagor had 18 900 inhabitants (52 % of which were women) in
2012 which corresponds to about 3.4 % of the total population of Kärnten. In comparison, it
can be mentioned that the population of Hermagor amounted to 20 350 individuals in 1961,
which constituted 4.1 percent of the total population in Kärnten. The administrative district of
Hermagor with its 806 km2 (340 km2 of which are rural areas and 185 km2 alpine mountain
chalets) is also the administrative district with the smallest area in the federal state. (Das ist
Kärnten 1970).
The number of inhabitants in Hermagor and Kärnten fell under the last decades with a
somewhat worse trend for women. Population-wise, the region of Hermagor was also the
region with one of the worst population trends in Austria. According to Statistics Austria, the
demographic long-term forecast for Hermagor also shows a pessimistic picture with a loss of

173
–7 % and –12% until the year 2030 and 2050, respectively. (Die Woche 25, 2010).
Decreasing birth rates, emigration especially of young and educated people and insignificant
immigration are sources. The share of inhabitants with foreign citizenship was also low with
5.3%, i.e. far below the Austrian average (10.3 %) which is considered to be problematic
(Schwarzfurtner 2009). The share of women is similar to other populations. The
unemployment share is surprisingly low compared both with Austria and Kärnten. From table
1 it is evident that the district of Hermagor is only densely populated in both the Kärnten and
Austrian context.

The mountain chalet system

Standardization is considered to be a form of coordination and governance in society and is at
least as important as market and hierarchy (Brunsson & Jacobsson 1998, Brunsson 2000).
Today, even agriculture is very uniform and standardized. This applies to the major part of
Europe, but it has not always been the case. Not that long ago, each district was still an
isolated unit characterized by local conditions and traditions. Thus, each district developed its
own characteristics, its own kinds of buildings, based on an individually developed
organization of agriculture (Frödin 1926). Today, these individual characteristics have almost
disappeared. As technology has developed and been standardized, the organization of
agriculture and, finally, the actual agricultural districts, have become standardized. The
government authorities were the driving forces of a transformation process that affected many
countries in Europe, among other things through enclosure movements. In Sweden, it was the
government authorities that transformed the agricultural districts in a revolutionary way, in
particular through enclosure movement laws. This served to destroy the old Swedish village
agglomeration and thus the geographical basis for the old Swedish village society. The laws
regulation, the enclosure movements expressed was a new organizational principle, i.e.
individual production. This new principle was in complete contrast to the idea that constituted
the basis of the old village society, the idea of an organized, goal oriented and uniform
cooperation in the work within the industry.
These reforms, which constituted the starting point of the transition from a preindustrial to
an industrial society, led to considerable organizational changes in agriculture (Lütke 1956,
Hemfrid 1961, Guteland et al 1975, Utterström 1975, Frödin 1929, Pettersson 1983, Gadd
2000). Together with progress in technology and transport services, they created conditions
for economic growth and industrialization. These revolutionary changes have been described
by other researchers and need not be repeated here (Phillippovich 1922, Guteland et al 1975,
Pettersson 1983). Lately, the process has been speeded up by technological development,
modernization, subsidy systems, scale rationalizations, and national and European agricultural
policy, for example. The result is a ”modern” form of agriculture that many people consider to
be monotonous and impoverished when it comes to species.
A kind of settlement that has not been affect by this standardization to the same extent are
the mountain chalets. A mountain pasture is often a remotely located pasture with one or more
buildings that provided lodgings for labor that carried out dairy and watching duties of
grazing animals. This function has not changed to any considerable extent over time. The
system with mountain chalets is a kind of extensive stock-farming which allows the animals
to graze in different climate zones according to the seasonal changes. This means that the
cattle are brought to summer chalets with land that is rich in grass that are more or less distant
from the real agricultural district where the main farm is located. There is a technical term for
this way of keeping animals called ”transhumans”. A condition for the system is that the milk
that is produced is preserved by being transformed into cheese or butter, in particular, and this
needs be done on a continuous basis (Santillo- Frizell 2006, Larsson 2009, Möre 2010).

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On the Scandinavian Peninsula, the mountain chalet system exists both in Sweden and
Norway (Skappel 1926). The role of mountain chalets as an established and important
sustenance system resulted in fixed, institutional cultural forms in, for example, working life,
housing, types of buildings, kinds of tools and religious beliefs. The latter included the legend
of Mother Earth and so-called vitror (in Sweden) and other supernatural beings causing
mischief at the Alpine mountain chalets. One such folkloric creature is ”Das Kasermandl”, a
troll that moves into the barn during autumn and winter (Schipflinger 1931, Deutsche
Alpensagen 1861). The importance of the system with mountain chalets as an economic and
agricultural system in Sweden did almost entirely disappear during the era of industrialization.
In 1907, it was still of great importance for agriculture in Sweden as a whole since as large a
share as 23 of the whole stock of milk cows were being kept at the mountain chalets. In the
same year, 50 000 – 60 000 people lived at the mountain chalets. When there was an increase
in the costs for personnel and the processing of milk as well as for transporting the cattle and
when modern dairies were introduced, the system with mountain chalets became limited or
ceased to exist in Sweden. The system with mountain chalets is today still common in
European countries with alpine landscapes. Those places that remain in Sweden only work
due to various kinds of support. In the summer of 1980, there were a total of 272 different
users that transported cattle to mountain chalets at 209 different places. However, many of the
mountain chalets still remain and serve as mountain chalets for tourists or have been
transformed into attractive recreation resorts (Skappel 1926, Fäbodväsen NE 2010).
In the alpine countries, where the system with mountain chaletsis still common, mountain
chalets are called Almen, Sennereien, Almwesen, Almwirtschaft (in Austria) or (in
Switzerland) Alpen, Alpwesen and Alpwirtschaft. In the French Alps, the word Cababe is
used and in Norway they are called Säter. Outside the Nordic and Alpine countries, a similar
system with mountain chalets exists in the Pyrenees, on the British Isles, in the Carpathians
and in the Balkan countries. Outside Europe, the system with mountain chalets exists in
Northern Africa (the Atlas Mountains) and Asia (the Hindukush and the Himalayas). The
system with mountain chalets is one of the few real remnants of the old village society; it is
based on a village- and agricultural organization, which, in turn, is built on interaction (Frödin
1926).

The mountain chalet system in Kärnten

In Kärnten, the system with mountain chalets has a history that can be traced far back in time.
Pastures above the tree line were already being used in 5 000 BE Archeological findings of
bones from cattle and goats that could be dated to the early Stone Age (about 2000 BE in
Kärnten) indicate that these animals were already used in agriculture. It was mainly the meat
from the cattle that was used, but earthenware vessels that have been perforated like sieves
have been considered as evidence of cheese production. Through the use of burn-beating, the
settlement was expanded from the top and downwards. The valleys lacked any permanent
settlements, still had no roads, and were overgrown and swampy. Already in the eighth
century AD, the system with mountain chaletsbegan to be established and extended, and
started to resembleits now familiar and traditional form. Despite the fact that the existence of
mountain chaletsis already mentioned as a supplement to larger farms in the tenth century,
farms that are solely devoted to raising cattle (so-called "Schwaighof") can only be confirmed
in Kärnten from the twelfth century and onwards. Accounts that remain from that time show
that there were already mountain chalets with farm buildings (Alp) in alpine locations and that
these were being used in the summer (Dinklage 1966).
From the thirteenth century and onwards, the system with mountain chalets in the alpine
locations of Kärnten was expanded due to population growth and a milder climate. It appears
from the accounts of estates that, already at that point in time, there were strict regulations of

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the number of animals that each farm could bring to the mountain chalets and the fees that the
user had to pay. But there exists limited information on daily life in these mountains pastures.
Dairymen, shepherds and farmhands belonged to the agricultural proletariat without land who
has left no written accounts. It was only when more intensive methods of cultivation were
introduced in the nineteenth century that written information on the daily conditions at the
mountain chalets began to be produced. (Steinmüller 1802). The system with mountain
chalets had its golden era in the latter Middle Ages (the fourteenth and fifteenth century).
Cheese in particular was produced at these mountain chalets. Some of the reasons for this
were that cheese was used in exchange for other goods and as a means of paying tax
according to the accounts of monasteries in Kärnten. Society was still dominated by self-
subsistence, barter, local markets, insufficient roads for transport, lack of money, etc, which
are reasons why, instead of money, payments were often made in kind with grain, salt, butter
and cheese.
Another reason was that cheese soup constituted an important component of the daily diet.
In the major parts of Kärnten, breakfast consisted of a soup made of cheese. A description of
this soup, which was considered to be a cheap and nutritious breakfast (Suppenmachet,
Suppenkas, Kasmachet), can be found in a recipe from 1578. The primary produce for this
was a parmesan-like and probably very hard cheese. It had to be grated on a grater and put
into a milk soup where the cheese was mixed with hard and stale bread that had become
inedible. Cooking at the farms usually took place in so-called smoke cottages. A smoke
cottage has a fireplace without a chimney, where the smoke exits through a hole in the roof.
The idea is that the hot smoke is retained below the cottage ceiling, and that the thickness of
the smoke is regulated using ventilators for both intake of air on the floor and air outlets
through the roof. Smoke cottages were common all over Europe. They did still exist
sporadically in Sweden in the eighteenth century, in particular in Skåne, but later also in the
Finnmark (northern Värmland) where they were introduced in Sweden in the seventeenth
century by immigrated Finns. The advantage of smoke cottages was that they kept the heat
better than houses equipped with a chimney. The houses at the mountain chalets were
characterized by the fact that they did not have a chimney and that the smoke was collected
below the ceiling. This provided heating of the cottage and gave the soup a characteristic
smoky flavor (Dinklage 1966).

Forms of ownership at the Kärntenmountain chalets

The system with mountain chalets can be considered to be one of the few real remnants of the
old village societies, the old village system based on cooperation. In all places where the
system with mountain chalets still exists, remnants can be found of this early, often locally
characterized, form of organization and production.Written contracts regulating the rights to
keep animals at private/individual and collectively owned mountain chalets in Kärnten exist
from the fourteenth century. The right of disposition to the land at the mountain chalets in
Gailtal was characterized by three major types of rights of disposition (Werin 1982):

1) Exclusive (or individual) rights of dispositions that are reserved for certain subjects (a
certain individual), while all other subjects are excluded. This type of mountain pasture is
called ”Einzel- or Privatalm” in Austria. These mountain chalets were subjected to private
rights of disposition but in certain cases these were in turn subjected to limitations from the
village collective or the landowner (so-called servitudes). This form is called
”Servitutsalm”. The private right of disposition to the mountain chalets could in certain
cases be turned into a collective in the summer as concerns the pastures. Private mountain
chalets are usually either cultivated by individual agricultural firms or by an individual.
Usually, these are mountain chalets that are located at a lower altitude.

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 2) Collective rights of disposition, which belong to all individuals (or at least to a large
number of individuals). These mountain chalets are usually owned by the state of Austria,
the state owned railway company or by the federal state of Kärnten. This form is of no
importance for the present study.

3) Collective rights of disposition, which belong to a relatively small, well delimited group
of individuals, while other subjects are excluded. This form of rights of disposition to
mountain chalets is considered to be the oldest form. In Kärnten it is called
”Gemeinschaftsalm”. The main rule is that an individual farm could bring as many animals
to a mountain pasture as could spend the winter on the same farm. This rule was probably
more favorable for larger production units. These mountain chalets owned by a community
were used by a larger number of farms in a so-called ”Nachbarschaft” (i.e. a
neighborhood). These communities might consist of several villages and settlements, so
called "Weiler". A so-called ”Weiler” from Latin (villare = farm), i.e. a group of between 3
to about 20 farms and the corresponding small acreage. Basic service institutions such as
churches, schools and shops are normally missing in this kind of settlement. In Kärnten,
this kind of settlement emerged during the colonization of the area in the early Middle
Ages. Weiler is an early form of the latter village settlements. The size of these areas is
shown in the example of Dellacher Alm in Gailtal: 62 farms in 11 villages had the right to
bring animals to this mountain pasture (Koroschitz 2009).

The right of use to such areas of land was given to several individuals, farms and villages and
could thus be used according to a complicated pattern (Haller 1969). This kind of co-
ownership can be documented for Kärnten from the fifteenth century, but it is probably much
older. The neighborhood regulated the running of the mountain pasture and jointly organized
the labor. The neighborhood ensured and organized these rights and relations over the
centuries, but also cemented injustices since individuals who settled in the area at later points
in time were excluded from the right of disposition. Until the parcel- and agrarian reforms in
1848 (the so-called Bauernbefreiung), the legal basis for these rights of disposition was
common law which sometimes generated conflicts. Shepherds and farmers tore down fences
or took animals that had entered their land from other mountain chalets as pawns. The
question of settling the borders between different village communities was solved in different
ways (Pettersson 1987, Ostrom 2009). Sometimes these disputes also turned into physical
violence and often kept the courts busy over several decades. Thus, there is, for example, a
story about a conflict that emerged in a dispute about the border from Gailtal that turned into
shooting between two villages. Several individuals were shot and others were thrown down a
steep mountain slope in revenge (Ghon 1901).
The reforms of 1848 and 1853 resulted in the farmers becoming free citizens, but they had
to buy their freedom through payments to landlords and the church. These reforms abolished
the dependence of the farmers and the compulsory work, taxation and fees that these entailed.
Through enclosure movements and other land reforms, the farmers’ right to use the land was
transmitted to formal ownership. The exclusive rights of feudal landowners, i.e. the rights to
decide on and impose punishments and exercise police tasks, were abolished. Common land
became private land (Lütge 1967, Conze 1950, System der Volkswirtschaft 1888,
Phillippovich 1922).
Formally, Gemeinschaftsalmen are today juridical persons. This can be illustrated by an
example of how these complicated rights are still distributed according to old patterns. In the
Swiss village of Adelboden, farmers meet annually in order to decide on and distribute the
grazing rights at the village mountain chalets. At this meeting, it is decided how many animals

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per farm can be brought to the mountain chalets. It is the size of each mountain pasture that
determines the number of grazing rights. A few rights are private and a few hundred belong to
the municipality. The number of rights varies with the kind of animal: eight rights are, for
example, required to keep a cow or three smaller calves at a mountain pasture during the
summer. All grazing rights are distributed among the 141 farmers in the village, according to
a distributional system that is considered to date back to the thirteenth century. The
distribution of rights has been preceded by intensive negotiations during the year and most of
it has been settled in advance. The rights are sometimes being leased for several years or even
several generations. When the rights have been distributed, an intensive bartering procedure
starts again (Süddeutsche Zeitung 2010).
Each form of right of disposition has its advantages and disadvantages. The owner of a
Privatalm can probably adapt most quickly to changes in the framework conditions for the
activity (change in the production and adaption to various forms of support). At the same
time, each individual owner gets to finance all costs and investments on his own. Historically,
the private mountain chalets in Kärnten have been run in an intensive way. Lately, they have
been forced to abandon such intensive use, due to for example high costs for personnel, lack
of personnel, and the change to a more extensive use of the mountain chalets. Among other
things, this has led to a decrease in the number of milk cows, an increase in the number of
animals that are being taken care of at the home farm, and that the people supervising the
grazing disappeared from these farms. It has been easier for mountain chalets that are owned
by communities and collectives to fund the necessary investments and carry out repairs. It has
been easier for mountain chalets with collective rights of disposition to make larger
investments (the purchase of new technical equipment, milking equipment etc) and carry out
larger projects (cheese dairies, access roads). Moreover, the introduction, production and
marketing of high-quality products have been easier for them. The disadvantage of the
collective rights of disposition is considered to be that changes can only be made after long
discussions, and when personal opposing views have been resolved, which has come to
postpone projects for years (Koroschitz 2009, Lackner 2010). Already in 1873 a commission
pointed out the servitude mountain chalets as the most mismanaged ones. This
mismanagement was due to different interests as concerns the right of disposition:
While the landowner has an interest in taking care of the stock of trees at the mountain
pasture, the individual who has the grazing right would like to destroy each growing tree
already when it makes its first appearance, if he can do this and remain unpunished, in order
not to decrease the area of grazing land. The landowner does nothing to take care of, clear or
improve the land. Neither the landowner nor the individual with the grazing rights has any
interest in taking such measures. Thus, these mountain chalets fall into decay and are further
depleted every year.(Koroschitz 2009)

The extent of the various forms of ownership

The structure of the ownership rights and the rights of disposition at the mountain chalets in
Kärnten is not uniform. We find a small-scale mixture of mountain chalets that are privately
owned or owned by collectives and communities. The middle and eastern parts of the federal
state are dominated by privately owned mountain chalets. The western, alpine parts of
Kärnten (with Gailtal) are dominated by mountain chalets that are owned by communities or
agrarian collectives. These mountain chalets are usually considerably larger, located at a
higher altitude, and were used as grazing pastures in earlier historical times. Privately owned
mountain chalets emerged later (often through burn-beating) and are located at a lower
altitude. This can be illustrated by an example: Of the 1 986 agricultural pastures that were in
use in Kärnten in 2009, 79 % were private mountain chalets, 18 % were owned by agricultural
cooperatives, 2 % were other forms of mountain pasture collectives and 1 % was servitude

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mountain chalets. When the size of the land is considered, however, mountain chalets that
were owned by various agrarian cooperatives constituted 51 % of the total area thatis
considered to be land of mountain chalets. Next in line were private mountain chalets with 36
% and servitude mountain chalets with 9 % of the available acreage in 2008 (Koroschitz
2009).
The ownership structure of the mountain chalets in Gailtal constitutes a contrast to the rest
of Kärnten. We find a relatively uniform picture where four fifths of all mountain chalets are
owned by agrarian collectives or communities (Ruppert & Mayer 1978). A mountain pasture
that is profitable today requires a relatively large minimum size. It is due to their larger size
that the collectively owned mountain chalets have a comparative advantage in this context.

The mountain chalet system in Gailtal

The system with mountain chalets in the mountains around Gail and its tributaries, the so-
called Carnia region (that is Gailtal, Gitschtal, Lesachtal, Weissensee and Nassfeld-
Hermagor), has a long tradition. One of the first systematic written pieces of information on
the use of grazing land in connection with dairies at mountain chalets is to be found among
the accounts for farms concerning the county of Görz from 1375. The county of Görtz came
into existence at the beginning of the twelfth century, as the result of the attempts to obtain
power by the Meinhardinians (i.e. a Bayern noble family) and their close connection to the
patriarchate of Aquileia (a Catholic Papal State in the area that is today called Friuli and
Istria). The county – which covered the areas from Tyrol and Kärnten in the north to the
Adriatic coast in the south – was incorporated into the Habsburg Empire in 1363.
The production of ”Almkäse” at the mountain chalets of Gailtal is already mentioned in
these documents. For a long period of time, there is no information about the dairy production
in this area. The few existing studies with aggregated figures on the production of milk and
cheese in these mountain chalets are not to be found until the latter part of the nineteenth
century. In 1870, 65 tons of cheese were produced at the mountain chalets of Gailtal. Besides
cheese, several other by-products were produced: 13 tons of curd cheese, 6 tons of butter and
23 of milk that were consumed by those working at the mountain chalets. In 1949, there were
still 39 mountain chalets in Gailtal with an ongoing active production. In order to control the
development of the mountain chalets and be able to solve their future problems, a producer
cooperative (Gemeinschaft der Almkäsereien Kärntens) was established in the same year with
its headquarters in Kötschach. Due to the structural change in agriculture and the increasingly
intensified agriculture in the more fertile valleys, the mountain chalets lost their economic
importance from the 1960’s and onwards.
In 1960, 25 mountain chalets were still in use, producing 34 tons of cheese. In the 1970s,
their number was further reduced to seven. A new way of thinking within agriculture, with a
transition to organically oriented and quality-oriented methods of cultivation and thus to
related economic subsidies, has then led to a new upswing in the cheese production at
mountain chalets. Not least the insight that the production at alpine mountain chalets also has
an economic potential as concerns tourists has been a favorable factor. Production at the farm
itself and the production of natural food products were encouraged and given a favorable
treatment in Gailtal. A continuous use of the trade mark ”GailtalerAlmkäse” can be verified
from 1950 and onwards. In the 1970s, there was an increase in the number of mountain
chalets to the present number of 14 (Der kärntner Bauer no 42). Today, the production of
cheese amounts to about 65 tons, i.e. it has returned to the level of 1870.
In the nineteenth century, many of the mountain chalets in Gailtal had animals that came
from Italian farmers. For example in 1872, there were more than 600 cows at Sattelalm that
belonged in Italian barns. Trade agreements and customs agreements regulated this trade. The
mountain chalets were often leased by Italian leaseholders who were producing cheese

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according to recipes with origins in the province of Friuli in northern Italy. When the north
Italian provinces were separated from the Austrian monarchy in 1866, this resulted in a
dramatic decrease in the number of Italian cows at the Gailtal mountain chalets. A detailed
description of the conditions for the mountain pasture economy is for the first time provided
in a report from 1873 (Die Alpenwirthschaft in Kärnten 1873). This report already provides
an exact geographical, geological and meteorological division of all mountain chalets.
Moreover, the vegetation that is considered to have been valuable for the favorable conditions
for the Almkäse in Gailtal is described. Descriptions of the daily work at a mountain pasture
as well as the economic importance of the mountain chalets provide a good insight into the
economic conditions of that time. Already in 1908 did the Austrian government regulate the
operation of in particular those mountain chalets that were owned by collectives or
communities. The users had to send reports to the authorities on how the user rights were
distributed, what the plans were for the care of the land and the forest and how the control was
exercised of the fulfillment of the goal. The aim of the regulation was to improve the
operation and the profitability of farms in alpine areas (Phillippovich 1922).
Despite the high level of ambition of the state to preserve and develop the system with
meadow pastures, this was subjected to a decline due to the outbreak of World War I. The war
front-line between Italia and Austria went through the mountaintops at Gailtal during World
War I and had severe consequences for the mountain pasture settlements. Access roads and
farm buildings were destroyed to a large extent. The new border towards Italy put an end to
the Italian cows that had earlier come to graze at the Gailtal mountain chalets in the summer.
In the 1920s, the government tried to restart agricultural production through various funding
programs. Alpine areas were then particularly taken into consideration. Repair work on
buildings that had been destroyed and access roads as well as new constructions were
financed by these government subsidies. The government financed reconstruction work also
constituted a possibility to modernize and improve these production units so that they came to
correspond to the contemporary requirements for a higher-quality cheese production.
Through infrastructural measures, the conditions for production were considerably
improved. The mountain pasture settlements that were created in that period still characterize
the alpine landscape in Gailtal. The size of the individual production units was then adapted to
conditions that were more suitable, and more modern, for the economy of the mountain
pasture. It is thanks to this reform that the production of cheese is today still possible in the
given spatial structures. At the same time, one also started to pay more attention to training
the personnel. These efforts to increase the competency were probably one of the reasons for
the obvious improvement in the quality of Gailtaler Almkäse that occurred at that point in
time.
Due to the fact that the cheese production in the area was rather unique for a long period of
time, the association that was created in 1949 (Gemeinschaft der Almkäsereien Kärntens)  in
connection with the application for an EU-certificate in 1996  changed its name to one that
was considered to have a more obvious connection to the regional origins of the product
(”Verein der Gemeinschaft der Gailtaler Almsennereien”). A protocol that continued the
tradition from the medieval ”Alpordnung” (that is, the regulations that determined which
farms had the right to bring animals to mountain chalets etc.) was established by the activity
group that had been active in the creation of the project Gailtaler Almkäse. The new protocol
(Gailtaler Almprotokoll) came to play an important and binding part for future cooperation
within the cooperative (Burgstaller 2010). The protocol that was drawn up by 76 people (9 of
whom were women) active within the mountain pasture trade constitutes a binding guideline
for all members. It consists of 20 pages and contains detailed regulations for how the
production and quality control of cheese that is covered by the trademark is to be carried out.
It also provides binding instructions concerning how to care for the animals and the

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organization of the operation at the mountain pasture. The most important thing might be the
binding regulations for pricing for the members. A binding minimum price for the members
of the cartel per kg of cheese is stipulated. Furthermore, it is stipulated that the members are
to carry out yearly controls of the prices and that there should be an annual increase of the
prices. Finally, it is established that regional small firms should be used when carrying out
investment assignments in the infrastructure of the mountain chalets (Gailtaler Almprotokoll
1994).

Table 2. The number of mountain chalets and the animal population in Kärnten in
1891, 1953 and 2008

1891 1953 2008

Dairy cows 13 265 11 273 1 889
Cattle – young animals 57 837 50 335 51 270
Horses 2 640 4 167 1 635
Sheep 54 781 49 734 15 347
Goats 10 876 3 474 1 162
Pigs 4 517 1 648 S
Number of meadow pastures 2 324 2 178 1 951
Mountain pasture acreage S 248 000 174 706
hectares
Pasture land hectares S 154 000 72 750
Number of employed at the 3 146 2 146 609
mountain chalets
Population in Kärnten Men 1 785 Men 1 232 S
Women 1361 Women 1 184 S

Source: Koroschit 2009. S= Information is missing

As appears from table 2, there was only a minor decrease in the total extent and importance of
the system with mountain chalets measured as the number of meadow pastures in Kärnten
between 1891 and 2008. The number decreased with only 16 percent from 2334 units 1891 to
1951 units 2008. There was a decrease in the total acreage by about 74 000 hectares and the
pasture land decreased by about half. As appears from the table, there was a decrease in the
number of milk cows in particular between 1953 and 2008 by 16 percent while the number of
cattle and young animals remained constant. However, the decrease in the number of
employed is salient.
In comparison, it can be mentioned that in 1980, there were only 200 mountain chalets in
Sweden. When making a new inventory in 1990, only 139 mountain chalets were still active.
In the evaluation of the goals for environmental quality by the Swedish Board of Agriculture,
”A rich agricultural landscape”, it is emphasized that only a few of the mountain chalets in
any obvious way mirrored work at the mountain chalets in preindustrial society (Bill to
Parliament 2009).

Old cheese is sold with new methods

The EU reformed its innovation policy at the beginning of the 1990s. Previously, all
investments had been made in research and technical development of (industrial) firms. These
investments were expected to automatically result in innovations and have an economic effect
on the market. However, it is shown in evaluations that research is not turned into new
products and market shares to a sufficient extent. The goal of the new innovation policy was
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that the regions were to get assistance in helping themselves. The regional and local level was
considered to be the best unit for creating and implementing innovative measures. At this
level  one thought  it would be easiest to interact with, in particular, small firms. It was also
considered to be important to take the specific conditions and requirements of the region as a
starting point. There was no recipe for business administrative success and factors that could
create growth. The projects were to be the result of regional initiatives and not be imposed on
regions from a higher level. Networks were to be established both within the region, between
firms and the public administration and between regions. In order to be able to develop and
turn important resources for innovation purposes, such as human capital and technical
development, into economic success, it was considered to be important to create efficient
regional and national support systems. These views were widespread within the EU when
Austria obtained its membership in 1995 (Green Paper on Innovation 1995).
Efforts to create inventions were beginning to be considered as an increasingly important
part of EU regional policy. A high potential for innovation in the European economy was to
an increasing extent considered an important condition for creating welfare. It was assumed to
be particularly important for agrarian and industrially less developed regions that had shown a
relatively lower innovation capacity than more developed industrial regions. In order to avoid
elimination, firms should be encouraged to create competitive advantages based on the
production of better and different goods and services. In the same way, states were
encouraged to supply national, regional and local support systems (Kinkel & Wengel 1998,
Grote 1997, Jonsson et al 2000, NUTEK 2008). These views were widespread when a
strategy was developed at the federal state level in Kärnten in order to develop neglected
regions.
With the aim of preparing agrarian organizations and other agricultural parties for an
imminent EU entry, the federal state started a corporation: Kärntner Agrarmarketing AG. The
aim of the corporation was to increase the production of value added among agricultural
producers and regions that had been neglected and obtain subsidies for the planning of
projects related to food products in connection with Austria's entry into the EU. Gailtaler
Almkäse soon became one of the large projects of the new lobby firm.
The corporation prepared most things. A first step was to activate local activity groups, to
obtain subsides to finance their activity and to distribute these funds. According to the project
leader for the application for an EU-certification of Gailtaler Almkäse at that point in time,
the application was initiated by an inquiry from the federal government of Kärnten about
possible potential candidates for certification among regional food products. The query
targeted farmers, gastronomers and entrepreneurs within the area of tourism. It appeared
clearly from the guidelines from the federal state that only a few products could be suggested.
The answers were evaluated and Gailtaler Almkäse and Gailtaler Speck (a smoked ham) were
agreed on. The initiative now went to the regional level. Local activity groups and networks
between different interested parties were created. The applications were quite extensive and
complicated. The firms involved would never have been able to do this on their own, so they
were assisted by a consulting firm. The costs for the applications were borne by the Austrian
nation-state and the federal state government in Kärnten and were counter financed by various
EU funds.
The application for the cheese was considered to be one of the best and is still being
emphasized as "best practice" in different contexts (Burgstaller 2010). The efforts were
rewarded by the fact that two products from Hermagor, i.e. Gailtaler Almkäse and Gailtaler
Speck were certified, (with PDO and PGI) in 1996 and 2006, respectively. The cheese almost
immediately received a PDO-certificate while this turned out to be more difficult for the ham.
According to the project leader, it was more difficult, based on historical and other regional
factors, to prove that the pigs  from birth to slaughter  had traditionally been raised on

182
fodder from the region. This was easier with the milk. Cows have unquestionably always
existed at the geographically delimited mountain chalets where they grazed. These two
products became the figurehead products of the region in the marketing of other regional food
products.

Gailtaler Almkäse – product description

Gailtaler Almkäse is a cheese that is produced using cow's milk and, in certain cases, with an
addition of goat's milk (the share of goat's milk must not exceed 10 %). The milk that is used
for the production of Gailtaler Almkäse can only be produced at certain specific mountain
chalets (that are located at an altitude of around 1600 meters above the sea). The use of milk
that has been produced in the valleys is explicitly forbidden. Only rennet (from calf stomachs)
and lactic acid bacteria cultures can be added in the cheese production. The share of fat in the
cheese is stated to be at least 45% (F.i.T), the share of water a maximum of 40 % and the dry
matter at least 60%. The cheese is round and weighs 0,5 – 35 kgs. It has a closed natural
golden crust. The curds themselves are yellow and of a supple texture, have small equally
round holes and are exempt from ”incorrect taste”. The shortest maturing period for cheeses
that are sold in stores is seven weeks. When there are special requirements, for example for
sales at the mountain pasture, shorter maturing periods can be accepted  but the period must
be at least five weeks. If the cheese is to be vacuum packed, the maturing period must not be
less than 75 days (EU application 2081/92).

The production of Gailtaler Almkäse

In order to have a sustainable guarantee for quality, the so-called ”Gailtaler Almprotokoll”
was taken as a starting point for the production process. It contained guidelines for how a
sustainable development of the system with mountain chalets, care for livestock, dairy work,
processing of milk and cheese production can be achieved. How cheese was traditionally
produced and how this changed due to the control connected to the PDO-marking is described
by the dairyman at the mountain pasture:

The evening milk was originally kept in wooden troughs. These were never
cleaned and were kept in the cellar at the mountain pasture where the
temperature ranged between 15 and 20 degrees. This meant that the milk easily
became acidic during the night since the wooden containers were never cleaned.
Therefore, the troughs were wide. Formerly, the cream was floating on top.
When milk was fetched from the farmer in those days, the cream was first
skimmed off. It was then used to make butter. Today, we are no longer allowed
to use wooden containers for storing milk. The inspectors of food products
would never forgive us for that! Now, we are instead using large, stainless steel
containers where the milk is kept overnight. In these large containers the cream
is  like in former times  skimmed off the following day. This procedure is of
course more hygienic and much cleaner. Unfortunately, it also prevents the start
of the acidifying process. Thus, we are obliged to add bacteria in the evening.
These are taken from older, sour milk. The evening milk can now become acidic
overnight. The stiff requirements as concerns hygiene unfortunately prevent a
natural acidifying process, which is why bacteria must be added. The cream is
skimmed off the milk. The share of fat varies between days depending on the
time of the year and the fodder and can thus not be exactly calculated as in a
large industrial dairy. These are also some of the reasons why one cannot

183
 exactly state what the share of fat in the Gailtaler Käse is. In the summer, it is
warmer in the cellar and the milk contains a great deal of cream. But in the
autumn, the share of fat in the milk decreases. The cream is also skimmed off
with a ladle and thus, there is no exact information about how fat our cheese is
from day to day. The cream that is being removed in the morning is then used to
produce butter. At the mountain chalets, butter is only produced using sour
cream. Mass-produced butter that can be bought in a grocery store is usually
produced using sweet milk. But butter produced using sweet milk would
become rancid after 3 or 4 days at the mountain pasture (Oberluggauer 2008).

The size of production

The production is limited due to the geographical limitations of the area, the location of the
mountain chalets at an altitude of about 1600 meters and the related climate conditions.
Systematically uninterrupted series on the production of cheese at the mountain chalets of
Gailtal are missing. However, there are a few existing cases. Already in 1872, about 49 000
kilos of fat cheese, 67 000 kilos of sheep cheese and 2 200 kilos of butter were exported
annually from the mountain chalets of Gailtal, in particular to the closed located Italian cities
of Udine and Palmanova. The mountain chalets in Gailtal were often leased to Italian
leaseholders. Cheese was then produced according to traditional regional recipes with their
roots in the Italian province of Friuli. The Austrian owners of the mountain chalets got their
remuneration from Italian leaseholders in the form of money. As a basis for the estimate of
this remuneration, the milk produced by each cow was measured each summer.
In 2010, the total yearly cheese production at the14 mountain chalets in Gailtal was
estimated at the fairly modest amount of 50 000 to 60 000 tons per year. There can be no
particular increase in this production. Tressdorfer Alm, which is one of the 14 cheese
producing mountain chalets, produces about 6 tons of cheese every year. Some of the reasons
for this are, according to the dairyman and production manager at Tressdorfer Alm, the
following:

Gailtaler käse is one of the few products that we have succeeded in establishing
in the region and that has obtained a trademark according to the EU norm. Thus,
we have very strong guidelines that regulate our production. We are not allowed
to add any other kind of fodder, our cows are only allowed to eat the fodder that
they find on our meadows. They must absolutely not be given any supplement in
the form of concentrated fodder, silage, or anything else, which is otherwise
very common within this line of business. This is one of the reasons why we can
only spend 80 to 100 days at the mountain chalets. It is not possible to spend a
longer period up here, we are at an altitude of 1600 meters and the vegetation is
limited. Thus, we only have an average yield of milk amounting to 11 liters per
cow and day. The same cow yields if it grazes down in the valley  a daily
average of 20 to 30 liters. This is due to the fact that it gets additional nutrition
in the form of concentrated fodder and silage. Here at the mountain chalets, they
only get what grows in the meadow! Mid-September, there is usually no longer
any food, the mountain pasture closes, we bring the cows back down and they
are returned to their home farms. Then, their milk is once more delivered to the
dairies. Therefore,”Gailtaler Almkäse” is only being produced during three
months. Our production is not so large that we can sell cheese to the wholesale
chains. We basically only produce for our own needs and those of the local
market. Our mountain pasture is of the size of about 500 hectares.

184
Out of a daily production of about 120 liters of milk, I get about 10 kilos of cheese, the
production manager continues his story. Of these, 5 kilos go to the farmers and 5 kilos are my
own share. The farmers are still paid in kind and no monetary transactions are involved for
those mountain chalets that are owned by communities or agrarian collectives. About 35
farmers own the approximately 70 cows at our mountain pasture Tressdorfer Alm. On
average, each farmer has 2 cows at our place up here. A cow at a mountain pasture only
produces about 1/3-1/2of the milk that she would have produced at her home farm in the
valley.

Regional economic related effects

Due to the ambition for regional economic growth, the interest groups of the government and
firms in Austria have shown a strong interest in supporting the initiation and development of
activities such as regional and local food festivities. The aim has been to create as many
events focusing on regionally produced food products as possible and  with the aim of
prolonging the tourist season  trying to develop a seasonally related culture of food festivals.
In the following passage, three of these projects will be described.

Gailtaler Speckfest
According to the project leader Michaela Burgstaller, it all started in 1992 with a festival
organized around a smoked ham ”Gailtaler Speck” that was produced in accordance with
local traditions. The speck festival has become very successful and is considered to be a case
of ”best practice” that runs over two days. The structure behind the festival is the following:
17 agricultural firms and a slaughter-house annually produce about 10 tons of smoked speck
according to strict regulations. Gailtaler Speck obtained a PGI marking upon Austria’s entry
into the EU in 2006 (Decree EU No 510/2006). At the actual festival, about five tons or half
of the yearly production of speck are sold. In 2010 about 18 000 homemade, smoked sausages
were also sold. This has turned out to be of considerable economic importance for the
development and survival of these 17 agricultural firms. Besides the real use for the involved
producing firms, the regional value added that is generated during these days is considered to
be considerable. According to the estimates of the municipality, the regional value added
amounts to about 1 million Euro. In 2012, 30 000 people came to the festival and five tons of
smoked ham was sold (Kleine Zeitung 2012). The festival also generates about 2 000 hotel
nights for tourists in Hermagor and its surroundings. The tourists are from the region and
other parts of Austria. They also come from other closely located countries such as Italy,
Slovenia, Germany and Switzerland (Zerzer 2011).
This, at one point in time, innovative idea for the region was, in turn, created in imitation
of an already established festival in northern Italy. The nearby Italian city of St. Daniele
traditionally organizes a festival focusing on a smoked Parma-type ham. According to
projectleader Burgstaller, the idea was introduced by a master butcherer in Hermagor. He had
been to St. Daniela and had been impressed by the number of visitors, realized the economic
importance of the festival and ’could then not get this idea out of his mind’. The Italian
festival around the smoked ham that lasts for four days attracts about 500 000 visitors. During
the festival, they buy and consume about 6 000 (à 60 kgs) pieces of the PDO-certified ham. It
probably contributed to the success that 18 million Euro were invested in the marketing of the
festival between 1988 and 2003 (www.prosciuttosandaniele.it).
The butcher became obsessed with the idea, "if they can do it, we can", and suggested to
the village mayor that a similar festival should be organized in Hermagor. A meeting was
arranged where representatives from agriculture, tourism, gastronomy, the chamber of

185
agriculture and the project leader Burgstaller were present. ”We also had a person who was
full of ideas  an optician by profession  who participated in the meeting and who thought
that the suggestion was a good idea. At an early stage, he set as the goal that the first festival
was to attract a couple of thousand visitors to Hermagor. Everyone was laughing at him, but
he did not give in and thus succeeded in persuading and involving many of us”. With the
answers at hand, we know that the project has turned out to be successful and viable. The idea
was then imitated by many others. Kärnten is today ’a country of culinary festivals that are
organized around locally produced food products’. Only in the region of Hermagor (which
has about 19 000 inhabitants) they start with a polenta festival in June, which is followed by a
speck festival, a Frigga festival (Frigga = food made of corn), a festival when the first
Almkäse is ready for consumption (Käseanstich), a honey festival, a bread festival and a
cheese festival in the autumn. Moreover, there are a number of smaller local festivals focusing
on potatoes, apples and other items. All of this thanks to the master butcher who did not give
up on an idea that he believed in.

The cheese festival in Hermagor

This project was also being prepared before Austria's entry into the EU. An application for the
funding of the project was submitted in 1995 at the same time as the application for the
country's EU-membership. The project to start activities around the cheese could thus be
financed by the nation-state and the federal state of Kärnten and the EU. The aim of the
project was to promote a ’qualitative development of agriculture and the system of mountain
chalets within the region’. With this aim, the project was to ’use high-quality food products
that were produced in the region’. Further goals were to achieve improvements in the regional
production structures of the mountain chalets and ensure the extent of the sales of the products
(application agrarprojektpreis 1996). The cheese festival has become established and several
hundred small cheese producers from Italy, Slovenia, Germany, Switzerland and Austria
exhibit high-quality dairy and cheese products every year. Cultural events create a folkloric
framework with dancing, traditional costumes and traditional handicraft around a festival that
is visited by around 12 000 – 15 000 tourists every year depending on the weather
(www.kaesefestival.at). In an attempt to improve the project and create a further regional
value added, a related project was initiated in 2001 (”Gailtaler Kulinarium – Gailtaler Speck-
und Käse Strasse).
Hemagor now had two leading products that had obtained an EU certificate (cheese and
speck) but there was a desire to increase the visibility of other locally produced food products.
The project, which was also on this occasion subsidized by the state, the federal state and EU
(50 %) funding, started in 2001. Local interested parties had steadily worked on four food
products for some years (besides cheese and speck also bread and polenta). The highlights of
these activities are yearly festivals that have been created around these products in the valley
(Woche 2010). In order to create synergies and improve its positioning in the region, it was
decided to follow a common strategy. The main goal of the strategy is to try to create new
markets for these locally produced food products within and outside of the region.
Furthermore, the common efforts should be targeted at increasing the ability of the region to
increase the value added. There were several means of obtaining these goals.
A common organization was created for selling and marketing the products. The purpose
of this organization is to build a bridge between these products on the one hand and local
agriculture, handicraft, trade, culture and folklore on the other. Already existing activities
(such as for example the Gailtaler Käsefestival) are to be reinforced and developed into
becoming the backbone of such cooperation. Extensive measures of an infrastructural nature
were also introduced. Examples for this are welcome signs, signposts, own stalls for selling
goods, flyers, posters, websites, public work, cooperation with the media, cooperation with

186
companies for transport and tourism, participation in official festivals, cooperation with the
credit card company Kärnten Card (www.kaerntencard.at). The target area of these activities
is regionally delimited to the administrative unit of Hermagor with its surroundings. The
yearly turnover for these activities was estimated at 5.8 million Euro in 2008, of which half
could be related to products such as cheese and speck and half to tourist activities related to
food products.

Food autumn in Kärnten (KärntnerHerbst)

This project is an example of how one has succeeded in extending the tourist season in the
entire federal state with seasonal (autumnal) food festivals. The project is described by those
by whom it is marketed as a symbiosis among culture, business life and tourism. The initiative
was taken by the federal state also on this occasion. The aim was to make it possible for all
regions to show off their ”cultural heritage in its most beautiful colors”.
The project seems to be successful as 74 municipalities had participated in organizing
about 120 events during two months in the autumn of 2009 and 2010. The participants were
restaurant keepers, farmers, craftsmen and members of folkloric organizations such as dance-
and music groups, shooting clubs, etc. (with a total of 80 000 members). The picture that one
wishes to convey is “the colorful Kärntner soul", which is to show its inner nature, and the
guests are thus invited to a pleasant gathering. The target audience was domestic tourists and
tourists from closely located countries coming for the day. This high level of ambition has led
to a rich supply in events. The number of visitors in 2009 was estimated at 220 000
(www.heimatherbst.at 2013).

The advantages and disadvantages of the PDO

In reply to the question about which advantages and disadvantages are related to an
application for an EU-certificate, most involved agents replied that the regional-economic
effects were only considered to be positive. The EU-certification and the marketing of other
locally produced food products that were thus made possible were interpreted as a counter
strategy to the negative effects of globalization. Many people thought that the closing down of
existing agricultural firms had been prevented and that it had been possible to develop other
existing firms at the same time as it had been possible to create new jobs within tourism and
related activities. It is not surprising that those subsidies (from the EU, the nation-state, the
federal state) that had been obtained for investments, for production, for organizing food
related events and for marketing, were welcome. According to what emerged in the
interviews, 70 percent of the costs for road constructions to the 14 mountain chalets at an
altitude of about 1400 - 1600 meters were subsidized by different funds. Among the
producers, there was awareness that the EU-certificate created a local monopoly which made
agreements on cartel prices and resulting price premia possible. A collective locally connected
trade mark cannot be sold to other firms or relocate its production to other parts of the world.
The protection of the trade mark Gailtaler Almkäse that an EU-certificate guarantees was also
of importance. The initially high costs for the application procedure and the costs for quality
control were mentioned among the disadvantages.
Finally, we asked one of the key agents the question of whether it had been worth all
efforts related to applying for an EU-certificate for Gailtaler Almkäse and got the following
answer:

Think about it: what exists besides cheese in Kötschach? Nothing! If Gailtaler
Almkäse had not existed we would have had nothing! What we did was simply
to market an old product with new methods. The cheese was basically produced

187
 with the same methods as in the eighteenth century. It is still manually
produced. There are more controls and the cheese is of better quality/…/ But it
is a great difference as compared to before when the farmers were dozing and
did not fix anything. Now, they understand that they cannot continue with this
and that they will be excluded if they do not fix the bad conditions. My answer
to the question is that the EU-certificate for the cheese is priceless! It also
fulfills an important function as an ambassador for the entire region (Lackner
2010).

Concluding remarks
The study divulges the potential possibilities for regions with structural weaknesses and other
problems affecting sparsely populated areas, not only as a means of averting negative
development, but also to create a regional value added. This occurs through the possible
prevention of the closure of existing agricultural companies, and the subsequent creation of
new companies and jobs in food-related businesses. To create powerful regional trademarks
based around locally produced food – through ‘regional branding’ – could be one of several
possible strategy for supporting an entire region, socially, culturally and environmentally.
By applying for the PDO certification for a locally produced food (Gailtaler Almkäse) that
has been produced in the area for centuries, one has been able to create a significant regional
value added in Kärnten. Gailtaler Almkäse operates as a regional umbrella band, with the
purpose of strengthening the cooperation between agriculture, trade, craft and gastronomy. A
trademark with a PDO certification tells, through its documentation, a history of the product’s
cultural and technical tradition and quality. The story of Gailtaler Almkäse’s past and the
product’s attachment to centuries of traditional ownership and modes of production is an
example of a kind of brand-strengthening storytelling.
A necessary condition for the project’s genesis was the Austrian government’s proactive
stance. They prepared an application for PDO certification before the country ascended to the
EU in 1995. State-owned and semi state owned companies were formed for the purpose.
Together with public authorities on different levels and agrarian trade organisations, these
succeeded in activating and uniting disparate local interest groups. The advantage of this
activity – which, initially, was public – was that individual small-size producers were not
burdened; this must have been a necessary condition for the completion of the project.
Because the Austrian state initiated and remained active in the opening phase, it bore an
entrepreneurial function, i.e. it created both a new product and a new market.
Through its PDO certification, the regional brand Gailtaler Almkäse also functions as a
regional cartel that not only guarantees its members minimum costs, but also higher gains
than those that can be made by comparable products. Another advantage is the fact that the
trademark cannot be sold off to other interested parties, and that production cannot be
removed from the region. Taken together, these things can function as a strategy of resistance
against the negative effects of globalisation. The development of regional brands can also be
used as a strategy for collective marketing. The brand tells a story of a context between
product, tradition, culture and quality. In Kärnten, food that has been certified by PDO or by
PGI has – through food-related events that are created around the other types of products that
lack that certification – become economical locomotives.
Unification in regional producer cooperatives, under a regional and collective brand,
allows previously competing small-size producers a stronger platform for negotiation with
larger customers, such as grocery stores. Through that unification, these small-size companies
can attain scale advantages in marketing and brand strategy, as well as in logistics. The
consequences of small businesses are transformed into advantages. In Gailtal, cooperation
between authorities, on different levels, with interest groups for agriculture, trade, craft,

188
gastronomy and tourism has created a regional value added that, according to assessors,
significantly transcends the value of the groceries produced.

Sources
Interviews
Burgstaller Michaela, project leader interviewed 2010-03-25
Lackner Herman. He has been the manager of the mountain pasture cooperative in Gailtal for
about 30 years. He both followed and had an impact on the development, interviewed
2010-09-29
Oberluggauer, Arno, dairy manager at Tressdorfer Alm, interviewed 2008-08-01
Zerzer Walter, project leader for Gailtaler Speck, interviewed 2011-11-11

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http://www.kaernten.at/de.aspx/Articles/List/18.08.2009/to/18.08.2010/Essen-
Trinken/filter/Essen-Trinken, Downloaded: 2010-03-25
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http://www.kaerntencard.at/en/ Downloaded 2013-01-26
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192
 11. Only France has cheeses like these
niche production in the dairy sector and the role of
geographical indications
(Appellation d’Origin Controlée)

Ulf Jonsson
The development of the dairy industry in the twentieth century – the transformation of raw
milk into butter, cheese, yoghurts and pasteurized fluid milk etc – has to a considerable extent
been a story of standardization and massification. Improvements in transports and cold
storage permitted the formation of relatively uniform and integrated national and international
markets (Goodwin, et.al, 2002). Standardization under the heading of national brands such as
Danish Lurpack proliferated during the first half of the twentieth century. An obvious
objection to this description is that the present day dairy industry offers a much wider range of
products than was the case also in the immediate post war era. Today the consumer in
supermarket chains all over the world can choose between different yoghurts, milk-based
desserts and a variety of infant formulas that was unheard of only twenty years ago. The
number of different brands is constantly expanding. However, within each of these different
segments the production is highly standardized.
Parallel to the processes of standardization and massification run an increasing
concentration of the industry. In the last decades, mergers and acquisitions to a significant
degree cross national borders. A number of transnational giants have emerged. These
companies are extremely active on emerging markets in Latin America, Asia and Central and
Eastern Europe (Kjoeller, 2007).61 The process of standardization and massification is thus
not confined to the global North only. Still, there are differences due to natural conditions and
historically formed patterns of land use and distribution of landed property that continue to
influence the production and consumption landscapes. However, these forces are not enough
to change the overall trend towards decreasing variation. To maintain a milk yield of 8000-
10000 litres per cow and year farmers have to rely on large volumes of concentrated feed. The
number of breeds used in this increasingly factory like dairy farming is today very limited.
Modern technology constitutes a significant barrier towards variation (Orland, 2005).
The contemporary global pattern of milk production differs considerably from the old dairy
system, which to a large extent dominated until the second half of the nineteenth century, at
least Europe. This system was much more dependent on natural conditions and restrictions.
The transformed products, in particular cheese, but also to lesser extent butter, had a strong
local/regional identity.
The triumph of standardization and consciously neglecting local and regional specificity
was never complete. The French cheese sector constitutes an emblematic counter example.
There are different estimations of the number of cheeses existing in France. De Gaulle once
complained that a country with over 370 different cheeses is impossible to govern. In such an

61
A brief glance in leading international dairy journals shows a constant flow of articles on expansion and mergers and
acquisitions in these markets by the leading global firms, see for example, Kjoeller (2007). The September issue of the same
journal reports two major acquisitions of the French dairy giant Danone on the Latin American market, Dairy Industries
International. September 2007, p 11.

193
estimate a number of different brands of standardized factory produced cheeses are included.
However, the internet cheese shop Fromages.com recognizes over 200 cheeses as having a
reasonable degree of local identity not just another brand name of a generic cheese. 62 In any
case, there is no other country except Italy that can match this record.
In the formative period of modernity the diversity of French cheese production was often
regarded as a drawback, a sign of an archaic mentality. In the inter-war years a sometimes
very animated debate took place between big industrialists and some allies in scientific world
on the one hand favouring standardization and modern hygienic methods of production such
as pasteurization and the other hand the gastronomes defending the link between cheese and
territory (Delfosse, 1995:199-208). Standardized generic cheeses won the battle in terms of
volume. These goods constitute major share of the almost two billion tons of cheese produced
in present day France.63 However, small scale artisan production maintained and over the
years increased its prestige in culinary circles (Chelminski, 1996).
Today a significant part of the well-off and well-educated European consumers are
increasingly suspicious of modern high tech agro-food production model. They often refer
back to a territorially anchored system of food provisioning. Many agro-food scholars identify
the emergence of a quality turn, focusing on more differentiated localized products and forms
of economic organization. The slow food movement originating in Italy constitutes an
illuminating example. The strong focus in France on products and cooking closely connected
to the territory, produits and cuisine de terroir, manifested in the work of the national council
for the culinary arts, Conseil National des Arts Culinaires, with representation of five
ministries and great chefs, is another example (Mogan, et. al, 2006:89-108; Goodman, et. al,
2005:126-136).
In such a context having a long established system of strongly territorially identified
products, which is the case in the French cheese sector, can be an important asset also
economically. This article will explore and discuss the importance of gastronomic niche
production in the French dairy sector with an emphasis on the post-war period and in
particular on the last three decades. Gastronomic dairy production is predominantly centred
on cheeses.64 In order to understand the specific conditions of gastronomic niche production
in France, it is absolutely necessary to discuss in some length the French and today also
European system of geographical indications, Appellation d´origine contrôlée, AOC in the
national French system and the European extension, Appellation d´origine protégée, AOP or
in English Protected Designation of Origin, PDO. Niche production in the dairy sector is not
completely equal to AOC-goods. There are small-scale artisan producers outside the system.
However, the AOC-system plays a central role and constitutes the very point of reference for
gastronomic niche producers. Furthermore, the French system is by far the most elaborated
among the systems of geographical indications and French representatives have pioneered the
work for international recognition of the system.
The remaining parts of the article will be devoted to an overview of AOC-cheese
production followed by an analysis of the interests different types of producers from small-
scale artisans to large transnational dairies have in the system and how they try to use it for
their specific purposes. What is the logic behind the engagement of small artisan producers in
the fairly long and complicated process of obtaining an AOC and why do large scale global
dairies like the group Lactalis and Bongrain show such an interest in these lines of
production?
62
www.fromages.com, Encyclopédie des fromages, 2008-02-04
63
In 2005 1 690 128 tons of cheese was produced in France, see Base de données statistiques, www.maison-du-lait.com,
2009-06-07.
64
Of the production of dairy goods that had obtained the highest ranking form of geographical indication, Appellation
d´origine contrôlée that covers the largest share of niche production, cheese constituted 86.6 per cent in volume. Institut
National d’Origine et de la Qualité, Fiche synoptique des AOC laitières 2006, www.inao.gov.fr 2008-01-10.

194
 In the final section of the chapter I will discuss AOC-production and disfavoured
agricultural regions. Under which conditions can the AOC-system serve niche producers in
these regions and contribute to a more vital economic and social development? What is the
relevance outside the French context?

Appellation d´origine contrôlée: a stranger in a world of trademarks and

private standards.
In recent years an extensive debate on Geographical Indications in general and on the French
AOC-system has emerged among agro-food scholars in a wide variety of disciplines
(Sylvander, 2000; Sylvander, 1995:167-183; Barham, 2003). Still, outside the world of agro-
food scholars the system is not particularly well known. Thus before entering into a more
theoretical discussion a brief account of the historical roots and the actual functioning of the
system can be useful.
In the “historiography” of AOC-system the law against fraud of agro-food products of 1905 is
often mentioned as the starting point. Originally, the intentions of this law were to outlaw
wine falsifications.
In the inter-war years the legislative framework developed gradually and in 1935 a national
body Institut National des Appellations d ´Origine Controlée, INAO, was formed, today
Institut National d´Origine et de la Qaulité. In the beginning the system was primarily
adapted to the demands of wine production. In 1955 a more solid base for the inclusion of
other foodstuffs in the AOC-framework was created by a new agricultural orientation law.
The committee for the governance of milk products (Comité National des Appellations
d´origine fromagère) was put in charge of the sector. The ad hoc way in which cheese
producers had been treated gave away for a more formal structure. From 1990 and onwards
any food product meeting the demands of local/regional specificity and a long standing
notoriety could apply for an appellation (Ruch, 2000).65 Is the AOC-labeling just a public
standard among other public standards, a once important category in the agro-food world that
has diminished in importance with the expansion of private standards? The answer is a
definite no. Most public standards aim at granting the sanitary quality of mass-produced
goods. These products are measured against an “objective” legislative framework. 66
The very logic of the AOC-concept implies that the quality and specificity of the good is
intimately linked to the interaction between a given territory and methods of production
formed over as long historical period and adapted to the demands and conditions of the
locality. Furthermore, it is also a standard formed in a close interaction between the
local/regional and the national level. Although, the relationship between the local and the
central level is not as uncomplicated as some of the leading actors within the system will
persuade us to believe, there is a substantial degree of truth in these characterizations.
The responsible for the local office of INAO in Poligni in the heartland of Jura with four
famous AOC-cheeses nearby, Comté, Mont d’OR, Morbier and Bleu de Gex, Benoit Ruch
gives a vivid expression of this opinion. The fundamental aspect of the AOC-system, Ruch
maintains, is that it does not part from the top level of any central national or European
bureaucracy; it starts from the local level, the base. The people at the base have as a result of
their empirical knowledge and a local “know-how” transmitted over generations selected the
best processes to permit the agronomic potential of their territory (terroir) to express itself in
an optimal way in the product. Later these producers simply asked the state to preserve this
election in the interest of the consumers and to guard what has been created generation after

65
http://siga.inst-elevage.asso.fr/Bases/ClubMetiers 2003-11-27.
66
This type of standard is close to what the economics of conventions school classify as an industrial. The economics of
conventions as an interpretative tool will be discussed later in this section.

195
generation and constitute a vivid heritage in a part of the national territory (Ruch, 2000:2-3).67
Basically, it is the profession, Ruch continues, that is collectively responsible for the future of
an appellation. The state has delegated extensive powers to the subcommittee for the product
in question to protect the name of the appellation.
In the ears of a non-French audience statements like this may sound over-pretentious and
strange. The underlying idea is that a good could embody environmental and cultural
qualities linked to a specific place distinguishing it from anonymous mass-produced goods.
Thus, the geographical indication label constitutes a form of collective intellectual property.
The Anglo-Saxon business community oriented towards liberal economic thinking has some
difficulties to digest this idea. The role and the status of geographical indications have also
been, and still are, a source of controversy in the GATT and later the WTO negotiations. To
strengthen the position of the idea of geographical indications, an international organization,
Organization for an International Geographical Indications Network, was formed in 2003 on a
combined French and Italian initiative. The organization covers over two million producers in
thirty countries. By exporting the concept and involving producers from developing countries
the legitimacy has increased.68
Certainly, the idea of the embodiment of a specific territory in a good is to a large extent a
social and cultural construction (Jonsson, 2004:37-38). Nevertheless, it is not possible to
construct an AOC completely arbitrarily. To obtain an AOC is quite a long and arduous
process involving several stages:
The first step is to form a producers’ union, called a Syndicat de defense or Syndicat
Interprofessionelle of the appellation in question. In France individuals or private enterprises
cannot apply. If successful, the union will become the guardian of the rules of production at
the local level (Barham, 2003:133-144). The union prepares a detailed dossier where it is
necessary to provide evidence that the appellation has a historical reputation and is known to
the consumers. Furthermore, the union must demonstrate a close tie to the territory (terroir) of
origin based on natural conditions and on a local savoir faire which can constitute the
product’s specific qualities and traditional character. The union must also demonstrate how
the product distinguishes itself from similar goods already on the market. The area of
production must be delineated. Methods of production, the type of inputs permitted has to be
specified. For most of the AOC-cheeses most of the fodder must be produced on farm.
Extended periods of grazing are demanded. Ensilage is often outlawed. To sum up, a very
detailed list of demands to guarantee the connection between territory and product forms a
part and parcel of these applications.
The application is handed in to the regional office of INAO. Then a number of different
steps follow. A regional review committee does the first “spadework”. After a certain amount
of modifications the application moves to the national level, where a draft of the final edition
is formulated to be approved of, signed by the minister of agriculture and published in the
Journal Officiel de la République Française, see figure 1.
This process is normally an affair of five to ten years from the first to the final step. Thus,
for the actors involved the idea that a foodstuff could reflect an interaction between the
environment and the historical, social and cultural dimensions of a specific place is taken very
seriously. Even if it is highly legitimate to question the pretensions of the longevity mobilized
in publicity campaigns for certain cheeses, you cannot construct an appellation out nothing.
67
”Ce qui fondanmental c´est que l´AOC ne part pas d´un sommet, d´une bureaucratie centrale ou communautaire ; elle
part de la base. Les hommes de la base, en fonction de leur empirisme, en fonction des usages locaux et constants transmis
de génération en génération, ont sélectioné les meilleurs processus pour permettre aux potentialités agronomiques de leur
terroir de s´exprimer de facon optimale dans le produit. Les producteurs ont simplement demandé ensuite à l´Etat de
préserver cette sélection dans l´intérêt des consonmmateurs, afin de sauvegarder ce qui a été crée de génération en
génération et constitue un patrimoine vivant ancré sur une partie du territoire national.
68
www.orgin-gi.com 2007-01-12. For a review a recent activities see, oriGIn, Newsletter 7, July 2007.

196
You have to prove some historical presence of the cheese in the locality/region applying for
an appellation going back at least a century. The obligation is taken seriously by the actors
within the system and rightly so, since it is a key factor behind the idea of the socio-cultural
embeddedness of a food product constituted in a process of interaction between natural and
social factors. In fact, it is the very essence in the French concept of terroir of which the
AOC-system is the most elaborated form. In the dossier, the Cahier des charges, justification
of the historical link with territory (elements justifiant le lien avec le milieu géographique) is a
mandatory point.69

Figure 1. The procedure of the recognition of an AOC

Producers’ Union formulates a Request
↓
Request submitted to INAO Regional Office
↓
Request forwarded to the Regional Committee for review
↓
Regional review forwarded to the to the National Committee at INAO
↓
The National Committee designates a Review Commission
↓
The Review Commission edits a Report on the Request proposing, acceptance,
postponement or refusal
↓
The Report is returned to the National Committee
↓
If approved of an Expert Commission is designated to establish the geographical
delimitation
↓
The National Committee approves of the delimitation and writes a draft text of legal
decision
↓
The legal decision is signed by the Ministry of Agriculture and the text is published in
Journal Officiel de la République Francaise
↓
The Dossier (cahier des charges) is transmitted to the European Commission for
recognition as a Product of Designated Origin, PDO (Appellation d’Origne Protegé, AOP)

Source: Barham, E, “Translating terroir: the global challenge of French AOC labelling, Journal of Rural
Studies 19 2003 p. INAO, Rapport d´activité 1990-2000, Comité national des produits laitiers.

How should we then understand the phenomenon AOC? The French economic sociology
school, économie des conventions, provides important insights. The interpretive framework of
“les conventionalistes” is to a large extent focused on what we call orders of justification. In
their, now almost classic book, De la justification. Les économies de la Grandeur, the
sociologist Luc Boltanski and the economist Laurent Thevenot delineated six different orders
of justification, or conventions (Boltanski, et. al, 1991).
The rural sociologist Bertil Sylvander has kept four of these as particularly relevant for the
understanding of conceptions of quality in the agro-food sector. The first he calls an industrial
convention (convention industrielle). The quality of the good under this convention is
measured against an “objective” framework, the content of fat, the acceptable level of bacteria
or the consistence of a good etc. The national brands of butter that emerged in the early

69
INAO, Rappport d´activité 1990-2000, Comité national des produits laitiers., www.inao.gouv.fr 2003-04-06. For an
example how the link territory and product is constituted see the cahier des charges of two recently promoted cheeses,
Maconais et Pelardon, www.inao.gouv.fr 2008-02-12.

197
twentieth century belong to this convention. His second case is a standard developing in a
local context. It is built around a close long term interaction between the different actors
involving a significant amount of trust and called a domestic convention (convention
domestique). The third type is a purely market relationship. Quality is judged in the course of
market transactions, a market convention (convention marchand). The fourth and final type of
convention emerges through a collectively agreed framework with the state as the ultimate
guardian, a civic convention (convention civique)(Sylvander, 1995:170-173).
To a considerable degree, the AOC-system in cheese production displays important
features of a domestic convention. The link between commodity and territory has been
established through a dense pattern of interaction on the local level in the course of history
where trust is a central element. In that sense there is an almost perfect fit with the definition
of a domestic convention. The AOC certification, involving a process where actors at
different levels after a long series of sometimes complicated negotiations finally reach an
agreement ultimately sanctioned by the state, adds a significant civic dimension.
The delineation of the exact borders of an AOC-product is the most complicated and
conflict ridden part of the process. As long as a pretender of the AOC-status is marketed and
consumed at a local market there is no need to fix any exact borders. The civic convention
introduces a definite moment of inclusion and exclusion. You have to make a choice. It is
only within the borders defined in the cahier des charges the product is granted a historical
legitimacy.
Finally, there are also in certain cases influences from the industrial convention. In the
collective application for an AOC the actors are not necessarily agreeing on how the demands
on the historically formed methods of production, usages locaux et constants, should be
interpreted. In the next section, I will discuss the present controversy over the regulation of
the AOC Camenbert de Normandie, where the large-scale actors are trying to impose more of
an industrial convention type of standard.
Thus, different orders of justification are involved in a continuous struggle over the actual
content of each AOC-dossier, but contrary to trademarks it is a kind of collective intellectual
property. Its origin and complexity makes it different from most other public and private
standards most of them just relying of a single order of justification.

The economic importance of AOC-production and the uneasy balance

between large and small scale producers
In overall terms, the volume of AOC-cheeses has grown from around 124 thousand tons in
1980, the year when the statistics of the overarching of organization of the French dairy sector
Maison-du-Lait starts, to almost 200 thousand tons in 2006, see figure 2. In 2006 45 AOC-
cheeses counted for 18 percent of the production of ripened cheeses in France. In the sector
(la filière fromagère) there are 22000 farmers of which 1600 are producers of farm house
cheeses. The milk is transformed by 230 cooperative and 230 private dairies. Finally there are
180 enterprises devoted to ripening of cheeses exclusively. The turnover is 2.1 billion euros.70
Regarding these figures only, we easily get the impression of highly decentralized and small-
scale activity. A rough count of the average number of farmers per dairy gives a figure a
slightly more than fifty, which is extremely miniscule compared to the corresponding number
in standardized production.
The reality is somewhat more complex. There is a great diversity within the sector.
Roughly half the appellations had 2005 a production of 1000 tons, with the biggest Comté at
45 250 and the second largest Cantal produced 18 685 tons to compare with the smallest, the
goat cheese Banon which only produced 63 tons. Even among the biggest appellations most
70
INAO, Fiche synoptique des AOC laitières en 2006. www.inao.gouv.fr 2008-01-22

198
of the dairies involved in AOC-production are rather small. However, the largest French dairy
companies are present on the AOC-scene. The biggest of the all, Groupe Lactalis, answers for
around 25 percent of the AOC-production. It is, of course, standardized cheeses with well
internationally established brand names like the generic camembert, President, which covers
the lion’s share of the turn over and profits made in the cheese sector. 71 Nevertheless, the
company also develops a keen interest in the AOC-market. During the 1980s and in particular
in the 1990s Lactalis acquired a number of small and midsized dairies producing AOC-
cheeses including the dominant Roquefort firm Société Des Caves Et Producteurs Reunis de
Roquefort. Today the company has twenty-five AOC-cheeses in its product portfolio. Since
2001 Lactalis decided to group all the AOC-cheeses in a separate department around Société
containing 3000 employees in 30 dairies spread over the French territory. In the press release
announcing the federation of the AOC-segment under a single administrative unit the
company was eager to communicate that this change did not in any way interfere with a firm
respect of the tradition. Quality based on century old legitimacy, an ambition to create value
in often disadvantaged regions and defend the AOC as a spearhead of French gastronomy,
was according to Lactalis the main reason behind the administrative change.72
The interest in this line of production, that in volume and value terms is relatively
marginal, has to do with the great symbolic importance of these cheeses. To be present on this
prestigious segment of the cheese market adds to the reputation of the company as a guardian
of quality and tradition. To a certain extent the AOC-segment serves the same function on the
cheese scene as the grand cru wine on the global wine market. It adds to the prestige of the
company. The reputation can also be recycled in the publicity of the up-scale segment of
mass-production.
However, for these giant companies there is also a constant temptation to blur the line
between mass- and AOC-goods. At least in some lines of production important economies of
scale can be obtained by such procedures. The present conflict around the AOC Camembert
de Normandie is very instructive. In March 2007, the two largest actors in the appellation
Camembert de Normandie, Latalis and the cooperative dairy Isigny Sainte Mère, announced
that the companies will temporarily leave the AOC-label in anticipation of a change in the
cahier des charges permitting the use of pasteurized milk. Concern over the sanitary
conditions the risk of listeria contamination, which is higher in soft cheeses, was the official
motivation (Clavreul, 2007). This step immediately met a heavy resistance from the
remaining small-scale producers as well as from a group of connoisseurs. Already at the end
of April a protest group was formed, Comité de défense du Veritable Camembert supporting
the artisan producers. To this day more than nine thousand signatures have been gathered.
Support has also arrived from the other shore of channel. The Prince of Wales has signed the
petition.73 Of course, the Slow Food movement joined the banners of Camembert au lait cru,
denouncing the actions of Lactalis and Isigny de Sainte Mère recommending buying only
Camembert from genuine artisan producers.74
Although the battle is not formally over yet, there are strong indications that the small
artisan producers have gained. The new syndicat de defense has opted for maintaining the use
of raw milk as an obligatory demand.75 In recent revisions of AOC-dossiers by INAO the link

71
The company is present in most segments of dairy products but cheese represents almost fifty per cent of the turnover
making Latalis one of the biggest global cheese producers. In 2006 the cheese production of Lactalis amounted to 750 000
tons. The total turnover 2006 was 7.5 billion euro and the company employed 27 600 persons 13 000 outside France,
www.lactalis.fr 2008-01-12
72
Actualites. Lanqueot et Valmont rejointent Roquefort Societé pour former le premier pole francais d´appellation d´origine,
www.lactalis.fr 2001-10-01.
73
www.veritable.camembert.free.fr 2008-03-13.
74
www.la-cuisine-collective.fr 2008-08-03.
75
http://actualite.aol.fr/france/societe 2008-03-13.

199
between product and territory in wider French sense has been emphasized. When the big
companies demanded an immediate revision, the INAO took a firm stance denouncing the
initiative as a form of blackmail. So far the artisan producers have carried the day, even if the
committee for the defence of genuine Camembert has not put down the arms completely. The
organization demands a still stricter regulation.76
The battle of Camembert de Normandie clearly demonstrates some of the most important
features of the uneasy coexistence between large companies and small-scale artisan producers
in AOC-production. The AOC-system tends to even out the playground between companies
of different sizes. You cannot expand your milk supply outside the territory defined in the
regulation. The conditions of production do very often put a limit on the output of milk per
animal. There are also restrictions on the use of concentrated feed and provisions of minimum
time for the grazing season. In many AOC-regulations, the use ensilage feed is banned.
Quantitative expansion is not regarded as a goal. It is more important to guard the idea of
authenticity, to make the link between product and territory really trustworthy. Of course, this
also makes it possible for farmers inside the system to obtain a higher price for their milk.
The obligation of using raw milk requires more rapid transformation after milking and can
constitute an obstacle to the full exploitation of economies of scale.77
These provisions do not rule out the participation of big companies, but it limits their
competitive and transformative power. Dairy farmers do not have to adapt to a singular model
of modern high input/high output milk production, that a large number of critics in the various
civic society and peasant organizations denounce as an agriculture productiviste. This is the
context which makes it easier to understand why fairly small collectives of farmers and
transformers find it worthwhile to undertake the demanding and time-consuming process of
obtaining an AOC-label. In fact, among the latest promoted, the majority is quite small with a
high share of farm house production, se table 1. It is also the conclusion of two recent studies
of Pelardon, a goat cheese, from Languedoc that received its « letter of nobility » in the year
of 2000. The AOC-system works as protective barrier without which the big agro-food firm
could threaten to suffocate local actors capturing their regional identity for their own ends, the
authors of the report conclude (Benkhala, et.al, 2005).
This is also the position of the Confédération Paysanne, the second largest French farmers’
organization. La “Conf’” as the organization often is called has been formed in opposition to
the majority tendency in contemporary agricultural trade unionism heavily opposing the
dominant model of agricultural development, agriculture productiviste.78 A central element in
the critique of Confédération Paysanne is that the modern high tech agro-food system
produces foodstuffs of dubious quality, sometimes even dangerous and threatening to our
health (Bové, et.al, 2003).79 The support of the AOC-system from la “Conf’” rests on three
pillars: 1) it is regarded as a barrier against the banalization of mass production, 2) a
strengthening of family farming and small scale transformation, and finally 3) an instrument
for rural development. The role of AOC is not taken for granted. The organization and other
actors must remain vigilant. Large-scale agro-business outside and inside France is constantly
trying to invade and dilute the system. However, the AOC-system can serve as a vector of
76
http://veritable.camembert.free.fr/pages/position_090207, 2009-10-14.
77
In fact 72 per cent of the AOC-cheeses are produced with raw milk. There are seventeen appellation that does not have the
use of raw milk as obligation. Anyhow many of these use raw milk for a significant part of their production. The question of
using raw milk is a highly symbolic. The French section of Slow Food movement argues that in the long run only cheeses
using raw milk should be included in the AOC-system. Slow Food s´oppose au camembert AOC pasteurise!, www.la-
cuisine-collective.fr, 2008-03-03, see also Manifeste de Slow Food au défense du fromage au lait cru, www.slowfood.fr,
2008-03-03.
78
Confédration Paysanne, Structure et répresentativité de la Conféderation Paysanne, www.confederationpaysanne.fr 2008-
03-15.
79
For an overview of the organization’s position see the interview book with the spokespersons Jose Bové and Francois
Dufor (2003).

200
defence for territorial goods (produits de terroir) and help farmers to defend their livelihood
against the lamination of globalization (Curade, 2007).

Table 1. Recent AOC-cheeses, year if recognition, type of milk, production tons and
the number of farm house producers
Name Year Milk Prod Fermiers

Pelardon 2000 Goat 217 75

Chevrotin 2002 Goat 100 34
Banon 2003 Goat 63 17
Maconais 2007 Goat na na
Morbier 2000 Cow 6556 2
Tommes de Bauges 2002 Cow 556 24
Gruyère 2007 Cow na na
Source: www.maison-du-lait.com 2008-03-10

In the belligerent way so typical of the rhetoric of Confédération Paysanne, the organization
has put the finger on an important economic feature of the AOC-system in cheese production.
In my view, it has contributed to create an entente between global dairy companies on then
one hand and different types of small-scale actors, farmers, artisan dairies etc. It is not a stable
condition. The frontiers are moving and not always in the same direction. For certain
appellations the tendency over the last years has been moving towards a reinforcement of the
link to territory through more stringent definitions of methods of production and of supply
zones. In other cases as demonstrated by the battle of Camembert there are efforts to weaken
the line of demarcation towards generic cheeses. So far all the participants on the field can
benefit from the present state of co-existence. Small firms and family farmers can profit from
the experience and the networks of the giants like Lactalis and Bongrain to just name the two
most important transnational dairy companies present on the AOC-scene. These companies,
on the other hand, need the legitimacy that the maintenance of artisan producers contributes to
create. The situation in the two of large-scale firms dominated appellations, Camembert de
Normandie and Roquefort illustrates the phenomenon. In both cases Lactalis has a dominant
position answering for around 70 percent in Roquefort through the subsidiary Société and 60
percent in Camembert. Fairly large industrial dairies capture the second position. In Roquefort
it is Laiterie fromagerie Alric with its most well known mark Papillon and a market share of
slightly more than 10 percent that occupies this position and in Camembert the second is the
cooperative Sainte Mère d´Isigny with a market share of some 20 percent (Bessière,
2001:160-167; Defosse, 2007) . Nonetheless, also on this very concentrated market place
small artisan firms have survived and continue to thrive. The smallest company in Roquefort,
SARL Yves Combes, has only nine persons employed producing some 167 tons compared to
the 15 000 tons of Société. His cheeses are distributed mostly through short supply chains to
specialized cheese shops, restaurants and directly to consumers via his internet site. A small
quantity is even exported.80 This artisan and his mark Le vieux Berger, profits from a strong
reputation of authenticity, close links with territory. Words like, authéntique, rustique and de
terroir, are often used when Le vieux Berger is mentioned. The company was awarded with a
gold medal at Salon d’agriculture in Paris in the year 2000, an event of high symbolic

80
From time to time you can find Le vieux berger in specialized cheese shops in Stockholm.

201
importance in France (Bessière 2001:167).81 There are other small actors like the company
Vernières frères with 30 employees with almost 60 percent of its production exported.82
The artisan producers have their own more restricted but exclusive niches on the market
and do not compete directly with the giant companies. Nevertheless, they contribute to a
significant degree to maintain the reputation of the Roquefort cheese in the most gastronomic
circles in France and worldwide. To a certain degree this reputation is an asset for the
appellation as a whole. In the short run, the large companies have no particular interest in
wiping out the smaller players. However, without the protection that the AOC-label provides I
think it is highly improbable that small artisans like Yves Combes would rest on the market
for any extended period of time. The obligation of using raw milk which in Roquefort is not
questioned by any actor irrespective of size, limits the potential economies of scale so does
the restricted supply zone and other conditions of production in the regulation (cahier des
charges). The strenuous resistance against the suppression of raw milk as obligation in the
production of Camembert de Normandie by the small producers is against this background
highly understandable. Nonetheless, the game is never concluded. It is an unstable détente.
In each new application different interest may clash. In most of the recent promotions large-
scale actors have not been involved.83 Still, there is an illustrative example from an ongoing
application, the sheep milk cheese, Pérail. The cheese is the poor relative of Roquefort
produced at the end of the lactation period, when the dairies have ended their collection of
milk. Pérail is a small soft cheese consumed in peasant households and/or sold on the local
market. In the beginning of the 1980s it was almost extinct with the exception of few
enthusiastic farm house producers. From the early 1990s we can detect a renewed interest
stemming from two sources: first some of the farm house producers started small artisan type
dairies and secondly the big industrial actor Société entered the game. To protect the cheese
from imitations in other regions a producer association (syndicat de defense) was formed in
1994 and an application for obtaining an AOC was submitted in 1996. The application has
still not been approved of due to difficulties to reach an understanding on the methods of
production. Société produces a pasteurized Pérail under the trade mark Lou Pérac while the
artisan producers prefer a raw milk variety. Which of the actors who will impose their
demands is still not decided (Le Jaouen, 2008). The final verdict of INAO may, as we have
seen in the battle of Camembert go against, the interests of the big companies.

AOC-niche production and rural development

Irrespective of economic and ideological position there is a widespread consensus that the
AOC-system can be an important asset for rural development, particularly in disfavoured
regions. In the defence of AOC by Conféderation Paysanne the link between quality of rural
development and qualities of traditional, more extensive form of production demanded in the
AOC-dossiers is a recurring argument (Koehler, 2007; Gasson, 2008).84 The same argument is
an ever present theme in the discourses of the professional organizations of the AOC-
producers in the cheese sector on the regional as well as on the national level. In particular,
this is true for Féderation Nationale des AOC fromagères, FNAOC that regroups fourteen
appellations in the mountainous regions of Jura, Franche Comté and parts of Provence and

81
www.le-vieux-berger.com, 2008-03-19.
82
http://pagesperso-orange.fr/vernieres.roquefort/, 2008-03-19.
83
Most of the cheeses obtaining an AOC after the year 2000 have been quite small without any big industrial producer
involved or as in the case of Tommes de Bauges in an area where the old form of cooperatives, frutières are the dominant
actor in the dairy sector.
84
The defence is not unconditional. For a radical organization it is not entirely comfortable to defend a good of such an
outspoken elitist character. A letter published on the webpage of the organization illustrates this ambiguity in an interesting
way, see Gasson, A, “Defendre les AOC..jusqu´ à un certain point”, www.confederationpaysanne.fr, 2008-03-17.

202
Languedoc, all regions classified as highly disfavoured. The majority organization
Association Nationale des Appellation Laitères Francaise, ANAOF, is also regularly focusing
on the AOC as developmental tool although in a sometimes less colourful rhetoric.
In mountain regions like Jura, Savoie and Massif Central AOC production constitutes an
important segment in agro-food production. It is difficult to deny that this niche has not
positively contributed to the vitality of the rural society. These regions cannot compete in
standardized milk production. The complex in Savoie and Jura consisting of some of the most
well known appellations demonstrates the role of AOC in this context. Today the appellations
of Comté, Reblochon, Beaufort and Abondance rely on more than 4000 farmers delivering
milk or producing their own farmhouse cheese. 85 The demands of a fairly extensive
production with in principle only farm produced inputs including high altitude grazing put a
limit on the possibility to rationalize farming. There is also a tissue of rather small dairies,
many of which originate from a traditional form of cooperatives (frutières)(Jonsson,
2004:124-127). There are seldom more than a hundred farmers connected to a dairy and often
considerably less.86
The cooperative Thônes situated in a small town in Haute Savoie can serve as illustration.
They have around a hundred milk delivering farmers and the dairy produces three AOC-
cheeses Abondance, Beaufort and Reblochon. The company also sells farmhouse produced
cheese from some of their members. In this region it counts as a big enterprise, while in the
world of standardized production it would be a midget.87 Most of the actors involved in the
professional organization, such as farm advisors, agrarian economists and sociologists are
convinced that without the protection of AOC-label, structures like these would be wiped out
and I am very much inclined to agree. In the nineteen fifties and early sixties before the AOC-
system was fully in place the region was under heavy pressure from producers of generic
cheeses in other French regions, for example an Emmertal produced in Bretagne (Delfosse,
2007:122-123). This trend has since been reversed and the local cheese production has
recovered.
Thus the AOC-label may serve a useful end in rural development in disfavoured regions.
However, I think it is primarily as a part, although a significant part, in a broader attempt to
explore local identity and perceptions of authenticity as an economic asset by building a
small-scale network of gastronomic enterprises. The example of a small community in Massif
Central, the high plateau of Aubrac, is highly instructive (Jonsson, 2008:43-58). When
discussing the prospects of the area in the early 1960s the geographer André Fel was
extremely pessimistic. Fel saw a traditional pastoral economy based on transhumance and
diversified animal production combining dairy and meat production that could not compete
with modern producers. For example, he did not see the traditional Laguiole cheese as a
particularly valuable asset. It was just a variant of the Cantal cheese produced in neighbouring
region with modern competitive methods. According to Fel, the chalets where the cheese had
been produced as well as the low yielding Aubrac cow were doomed and so were the
prospects of a vital rural economy (Fel, 1962:236-238).
In the early 1960s a number of young farmers issued from Jeunesse Agricole Catholique
under the leadership of a very dynamic farmer/entrepreneur, André Valadier, formed the
cooperative Jeune Montagne. Their goal was to rejuvenate the Laguiole cheese. In 1961 they
obtained an AOC-label for this cheese. The approved zone of milk deliveries covered an area
of some kilometres around the small town of Laguiole. In the beginning around 400 farmers

85
To get the permission to use the mark farmhouse cheese (produit fermier) the farmer has to rely exclusively of the milk
produced on the farm from his herd.
86
For a general information of these appellations, see the web page of the respective syndicat professionnal,
www.comte.com, www.fromageabondance.fr, www.fromage-beaufort.com, http://reblochon.fr
87
www.reblochon-thones.com, 2008-03-10.

203
delivered milk and about 30 persons were employed in the dairy (Wampfler, 1997:285-312).
Today there are 79 farmers delivering ten million litres of milk producing 742 tons of the
AOC-cheese Laguiole.88 Besides cheese production on Valadier’s initiative an updated
version of the traditional Aubrac dish aligot made of mashed potatoes, fresh farm cheese and
garlic was added to the production line. A large supermarket chain agreed to distribute the
good. Aligot is also very much an identity marker of the region. The dairy produces 240 tons
of frozen Aligot, which is a value addition to the turnover of the company.
The dish has also been promoted by the star chef Michel Bras, the proud holder of a
Michelin two star restaurant. The effort of Michel Bras and other somewhat less known local
chefs contributes to the complex process of re-creating the local gastronomic knowledge and
exploiting this heritage in the development of rural gastronomic tourism (Jamais 1996,
Bessière, 2001:135-147). A complex network of small-scale firms contributes to exploit the
re-created gastronomic heritage. Local identity becomes a significant asset on the national
market and to a certain extent also on the global market.
Far from the economic and social extinction feared by André Fel, Aubrac today has
reversed the trend of economic decline. In fact, very much inspired by the experience of the
cooperative Jeune Montagne a number of small farmers have obtained another quality label,
Label Rouge, for their beef, Boeuf Fermier de l’Aubrac. The meat comes from a local breed
almost extinct a couple of decades ago. Outside the local society there is a network of
restaurants with an Aveyron/Rouerge identity, around thirty in the Paris region and
surroundings. These restaurants function as ambassadors for the culinary heritage and
constitute at the same time a market for local producers (Jonsson 2005).
To grasp the experience of Jeune Montagne the model of a culture economy developed by
the British sociologist Christopher Ray is useful. Ray identifies four different operation modes
in his conceptualisation of a culture economy as an instrument of territorially based rural
development.
The first mode Ray calls commodization of local/regional culture. The local cultural
heritage becomes embodied in a specific good. The French concept of terroir is an example of
this effort. The second mode emphasizes the construction and projection of the territorial
ideas to the outside. This is very much what is happening, when a good receives an AOC-
Label. The formation and growth of small-scale quality agro-food production is, at least in the
French context, heavily dependent on recognition from actors and institutions outside the
local community and so it is perceived by the local actors. A quality label adds to the
gastronomic legitimacy of the product. The cultural heritage of the goods is communicated in
a cost efficient way to the larger public.
The third mode focuses on selling the idea internally to communities, business groups and
official bodies in the local arena. I would like to extend Ray’s discussion by emphasizing the
diffusion and adaptation of the concept in other goods and services than the AOC-product
proper. An institutional framework where different agencies at different levels work in the
same direction seems to be an important prerequisite for a reasonable success. The importance
of a kind of more or less formalised, but broad-based development coalition has been
emphasized by the geographers Ash Amin and Nigel Thrift when trying to identify the
dynamics of success in regions of diffused industrialization. Amin and Thrift use the concept
institutional thickness (Amin, et. al, 1995:13-16). This is a multifaceted concept. Among the
factors discerned we find a strong institutional presence. Institutions of different kinds offer a
wide range of services and provide knowledge, local chambers of commerce, training
agencies, trade associations, unions, government agencies, development boards, etc. A high
degree of interaction amongst the institutions in a regional and local area is created. An
intense pattern of contacts between different institutional actors favours the emergence of
88
www.aveyon.com./gastro, 2008-03-07.

204
shared rules, conventions and knowledge. There is also a strong mutual awareness among
institutional actors that they are involved in a common enterprise. A successful agro-food
niche production needs the same kind of institutional thickness as has been identified in
regions of dynamic diffused industrialization. To anchor the idea internally in local
communities, institutional thickness can provide an adequate framework to realize the full
potential of a cultural economy as a vehicle for rural development.
The fourth mode concentrates on the normative capacity of the culture economy. Ray
regards the cultural economy as an effort to compete more efficiently on the national/ global
market through a kind of soft local protectionism to control economic, social, cultural and
environmental impacts on the locality (Ray, 1998:3-20).
In the French AOC-system the national organizations serve as centres of coordination and
reflection as well guardians of a common corporative interest. Increasingly national
organizations are involved in ‘foreign policy’ at the European as well as the global level.89
Exporting the very idea embodied in the AOC-system is a way of creating future ‘allies’,
which can turn out to be an asset in international negotiations within the framework of WTO
or in other transnational contexts. However, it is not only through the strictly professional
organizations that this work is pursued. Key actors like André Valadier are very active in the
formation of broader supportive forums. He is among the initiators of the association Terroir
et Cultures created in 2003. The association unites professionals in the agro-food sector and
researchers from the sciences, humanities and social sciences. The first international meeting
under the headline Le Terroir, Débats et Combats, was held in his home turf Aubrac, in May
2005. A close collaboration with UNESCO started in 2005 with the adaptation of a charter La
charte internationale des terroirs, at the first international meeting. This partnership is called
Planète Terroirs.90
Thus the AOC-certification alone is not sufficient to create vital rural economy in
disfavoured regions, but as a node in a local cultural economy the presence of an AOC can
constitute an important asset, which the example of Aubrac demonstrates. The local
organization, Syndicat de defense, provides an environment where actors may develop their
skills in creating a wider institutional framework promoting a cultural economy. The
constitution of a cultural economy is not a completely harmonious affair. It can and often does
create tensions within the local society. In the case of Aubrac voices maintaining that the
process has profited only parts of the local community, primarily the small town of Laguiole
and its immediate surroundings, have been raised. Conflicts between insiders and outsiders of
system are immanent (Bessière, 2001:141-147).
In many of the cheese appellations there are considerable efforts to form some kind of
local gastronomic agro-food networks and an infrastructure for gastronomic tourism. To get a
deeper understanding of to what extent these intentions will be fully realized or not other
cases have to be analysed in more detail. The fairly dense network of AOC-cheeses in Savoie
and Jura where local dairies often produce two or three different cheeses is one example that
deserves a closer examination. The region is also a high spot for winter ski tourism which
certainly contributes to expand the local market. There are routes des fromages that tourists
can follow visiting dairies, farmers and local restaurants nourishing the local/regional
gastronomic heritage. Les routes de Comté has a particularly well developed website. All
important gastronomic actors are present on the site.91

89
Interview with Mme Yvonne Amram, delegué géneral at ANAOF, 2003-09-15.
90
http://terroiretcultures.free.fr, 2008-01-16. The association is the formal host of the international meetings, the second
reunion will be held in June 2008.
91
www.routesducomte.com, 2008-03-11.

205
Are there any lessons to be learned outside France?
In its present manifestation the AOC-system can be regarded as part of a widespread mistrust
and discontent with mass-produced foodstuffs among well-educated and well-off consumers
in the western world. Consumers are worried about the long term sustainability of the food
order, and there is a growing interest in local and ecological produce (Kimrell, 2002). The
high-tech food production model is also seen as a threat to our health (Lang, et. al, 2004).
The actual expression of this more general tendency in the form of the extension of the
AOC-system to in principle any foodstuff and the idea of produit de terroir is rooted in the
French experience and culture. The rest of Mediterranean Europe and in particular Italy shares
the same value ground. It is not how a foodstuff is produced, which constitutes the centre
piece of the ecological critique, but how the final product tastes that is the focus of the critical
discourse. The emphasis on taste is not incompatible with an interest in how the good is
produced. The statues in the cahiers des charges banning industrial feed and demanding
extended periods pasture are very well adapted to more general conceptions of sustainable
production. This is a contributing reason behind the support of the AOC-system by
Confederation Paysanne. It is regarded as a potentially useful mean to protect and develop
family farming and it is also highly compatible with the ideas of the multi-functionality of
agriculture nourished by the European Union (Potter, et.al, 2007:1297-1301).92 The system is
also easy to fit into the exigencies of ecological or biological production as is called in France.
There are also combinations of the two labels AOC and agriculture biologique, AB.93
Nevertheless, the emphasis on the gastronomic dimension has deeper historical roots. For
example, farmers in the early twentieth century could consciously choose more expensive
inputs in animal production to profit from the willingness of demanding clients to pay a
higher price for a better taste (Jonsson, 1997:247-250). The trend towards standardization did
not leave France untouched, but the resistance has been more pronounced. The sense of a
need to mobilize against the erosive power of global forces is felt in a wide span of interests
in the French society, from Conféderation Paysanne to less radical networks like Terroir et
Culture. Independently of points of departure their critical discourse has strong elements of
what the sociologists Luc Boltanski and Ève Chiapello have identified as the artistic critique
of capitalism, i.e. capitalism as threat to authenticity and diversity (Boltanski, 1999:81-86).
This kind of discourse used to be much closer to the minds of French and Mediterranean
Europeans than to the Anglo-Saxon world, where on the contrary the market is regarded as
the main source and guarantor of choice and diversity. It is not a co-incidence that the Slow
Food Movement has its origin in Italy.
Paradoxically, partly as a result of the more rapid movement of ideas, considerable groups
of gastronomically interested groups also outside Latin Europe are becoming more sensitive
to arguments of an artistic critique of capitalism. The relatively great interest of the Slow
Food movement outside Latin Europe is one indication of this trend. From almost all corners
of the world we can notice a renewed interest in local agro-food production. The successful
launching of the international organization for products with geographical indications origin is
a clear indication that it is not only a southern European preoccupation. In the global North,
Geographical Indications are mostly seen as a mean to vitalize disfavoured rural areas. In the
global South there is an increasing interest in what is called Localized Agri-food Systems
(Système agroalimentaire localise, SYAL in French). The research along this theme has been
particularly intense in the Latin American context (Requier-Dejardins, et.al, 2003; Requier-

92
Multifunctionality is a highly contested concept with radically divergent interpretations. However, there is a strong current
in the European debate maintaining that multifunctionality could and should be used to encourage and reinforce to the quality
turn at the expense of productivist agriculture, see, Potter et. al. 2007.
93
The dairy, Le fromagerie Frech, produces a Munster Fermier and a Munster Bio. www.fromagerie-frech.fr, 2008-02-14

206
Dejardins, 2007). Localized agri-food systems are regarded as a possible wall of defence for
family farming and vital rural communities against the erosive forces of strong global actors
such as the coalition between transnational companies and large landowners. In that context
we can see a growing interest for Geographical Indication as a means to strengthen small-
scale local production. Within the framework of oriGIn a system of partnership between
European AOC-producers’ local/regional organizations and prospective candidates of GIs in
the South has emerged. So far three agreements have been formed.94
Thus, the French AOC-system serves as a point of reference being the most elaborated and
most established framework for Geographical Indications. It cannot be copied in detail, since
many of its foundations are closely routed in French history and culture. However, the French
experience functions as a source of inspiration. At the same time these partnerships contribute
to increase the legitimacy of the idea of culturally embodied products with a strong territorial
dimension in a world where important actors have been highly reticent. It is now more
difficult to write off the “soft protectionism” of localized production as simply a European
scam.
For the French dairy sector the AOC-segment constitutes an important asset not only in
economic terms in the strict sense but also symbolically. In this respect the cheese and the
wine markets have a close resemblance. The most exclusive part le grand cru wines and the
AOC-cheeses remain a privileged space for the established European, in particular French
products. For foreseeable future French producers have a strong comparative advantage due to
the firmly established gastronomic reputation. The only really serious challenger is Italy. In
that context the AOC-label is an extremely valuable symbolic asset. Competitors lacking this
advantage are handicapped in race for demanding upper middle class customers. Even after a
substantial reduction of export subsidies, there will remain profitable niches for old giants like
France and Italy on the global market although they lose volumes. Furthermore, the AOC-
system creates spaces of co-existence between large transnational companies and artisan
producers. Of course, it is not a perfectly stable détente. Nevertheless, on the domestic as well
as the export market the small actors need the experience and the networks of the large
transnational companies who in their turn need the legitimacy that the maintenance of artisan
producers contributes to create. In spite of the interest for localized, artisan cheese production
all over the world this is an aspect of the AOC-system that is difficult to copy especially in
countries where standardized mass production has more or less wiped out small scale
alternatives.
References
Interviews
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Potter, C. and Tilzey, M. (2007), “Agricultural multifunctionality, environmental
sustainability and the WTO: Resistance or accommodation to the neoliberal project for
agriculture?”, Geoforum.
Ray, C. (1998), “Culture, intellectual property and territorial rural development”, Sociologica
Ruralis, 38(1).
Requier-Desjadins, D. (2007), Les dynamiques territoriales. Débat et enjeux entre différentes
approaches disciplinaires. L´évolution de débats sur les SYAL : le regard d´un
économiste, Association de Science Régionale de langue Francaise. XLIIIè colloque
Grenoble-Chambery.
Requier-Dejardins, D., Boucher, F. and Cerdan, C. (2003), ”Globalization, competetive
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agri-food systems in Latin-American countries”, Entrepreneurship and Regional
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Ruch, B. (2000), Evolution et devenir de la commercialisation des produits laitiers AOC,
Intervention lors de l´Assamblée Générale des Amicales des ENIL de Pouligny et de
Marirolle à Juraparc à Lons le Saunier le 7 octobre.
Sylvander, B., Barjolle, D. and Arfini, F. (2000), “The Socioeconomic of Origin Labelled
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Économie et sociologie rurales, Actes et Communications, nr. 17-1-17-2.
Sylvander, B, (1995) « Conventions de la qualité, marchés et intitutions : le cas des Produits
de Qualité Spécifique », in : Nicolas, F, Valceschini, E. (eds) Agro-alimentaire un
économie de la qualité, Paris: Inra Editions Economica.
Uppsving genom småsskalig nischproduktion i Centralmassivet”, Internationella Perspektiv.
Nyhetsbrev från LRF om internationella frågor, nr 14 2005.
Wampfler, B. (1997), Crise et innovation dans les systèmes productifs agricoles des zones
défavorisées, Paris: Harmattan.
Internet links
http://actualite.aol.fr/france/societe 2008-03-13.
http://pagesperso-orange.fr/vernieres.roquefort/, 2008-03-19.
http://reblochon.fr
http://siga.inst-elevage.asso.fr/Bases/ClubMetiers 2003-11-27.
http://terroiretcultures.free.fr, 2008-01-16. The association is the formal host of the
international meetings, the second reunion will be held in June 2008.
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http://veritable.camembert.free.fr/pages/position_090207, 2009-10-14.
www.aveyon.com./gastro, 2008-03-07.
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www.fromageabondance.fr
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INAO, Fiche synoptique des AOC laitières en 2006. www.inao.gouv.fr 2008-01-22
Rapport de l´activité INAO 2005-2006,- L´INAO et la reconnaissance des AOC et des IGP-
comité National des produits laitiers, p 5. www.inao.gouv.fr 2008-02-10.
www.inao.gouv.fr 2008-02-10.
Maconais et Pelardon, www.inao.gouv.fr 2008-02-12.
Slow Food s´oppose au camembert AOC pasteurise!, www.la-cuisine-collective.fr, 2008-03-
03
www.la-cuisine-collective.fr 2008-08-03.
Actualites. Lanqueot et Valmont rejointent Roquefort Societé pour former le premier pole
francais d´appellation d´origine, www.lactalis.fr 2001-10-01.
www.lactalis.fr 2008-01-12
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Base de données statistiques, www.maison-du-lait.com, 2009-06-07.
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orGIn Newsletter 5 2006, www.orgin-gi.com, 2007-03-10.
www.reblochon-thones.com, 2008-03-10.
www.routesducomte.com, 2008-03-11.
Manifeste de Slow Food au défense du fromage au lait cru, www.slowfood.fr, 2008-03-03.
www.veritable.camembert.free.fr 2008-03-13.

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List of contributors

Bengt Åke Berg has a long career as a public officer. As such he held a number of important
positions until his retirement. After his retirement he obtained a PhD in Economic History at
Stockholm School of Economics with the thesis Volatility, Integration and Grain
Banks (2007). His current research deals with issues concerning market competition,
especially of agro food markets up to World War II and with the grain market during the late
18th Century. E- mail: [email protected].

Oskar Broberg is an associate professor at the Department of Economy & Society at the
School of Business, Economics and Law at Gothenburg University. His research is maybe
best described as Schumpeterian Business History. His latest publication ‘Entrepreneurial
exploitation of creative destruction and the ambiguity of knowledge in the emerging field of
digital advertising’ was published in McKelvey and Lassen (2013) How Entrepreneurs Do
What they Do: Case Studies of Knowledge Intensive Entrepreneurship. Cheltenham, U.K.:
Edward Elgar Publishers. E-mail: [email protected].

Johan Eellend is a PhD in History. He works at the Research Research Council Formas where
he is responsible for projects about Urban and rural development and Social Sciences. He is
also part time active as a research at Södertörn University. His research deals with agrarian
history in its widest sense but with a special emphasis on Estonia. E-mail:
[email protected].

Fredrik Eriksson is an associate professor in History at the Swedish National Defence

College. The main focus of his research has been Swedish corporatism, agrarianism, modern
military history, especially during the interwar period and with a geographic focus on the
Baltic Sea region. His latest publication is ”Swedish Agrarian Press, Cooperatives and the
Social Question ca 1880–1917, i Ann-Cathrin Östman, Pirjo Markola och Mary Hilson
(eds.), Co-operatives and the Social Question: The co-operative movement in northern and
eastern Europe, c. 1880–1950. Cardiff 2012. E-mail: [email protected]..

Luis Arturo García-Hernandez is a professor at the Departmento of Agricultural and Animal

production at the Universidad Autónoma Metropolitana-Xochimilco in Mexico City. He is
currently the coordinator of the doctoral program in agricultural sciences. He is member of the
Mexican Academy of Sciences and of the National System of Researchers (Level II). His
latest publication is the book "Producción sustentable, calidad y leche orgánica" (Sustainable
production, quality and ecological milk), jointly published by Universitad Autónoma
Metropolitana-Xochimilco y the Autonomous University of the Mexican State. E-mail:
[email protected].

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Eloy Gómez Pellón is a professor in Anthropology at the University of Cantabria (Spain). His
vast research covers a wide number of articles on various contemporary and historical aspects
of Mediterranean and Latin American societies. Some of his latest publications are the articles
Religion y patrimonio cultural en Marruecos (2011) (Religion and cultural patrimony in
Marrocco). Tierra, trabajo y conflicto en el campesinado (2012) (Land, labour and conflict
within the peasantry) and Sitios de la Antropologia. Patrimonio, lenguaje y etnicidad (2012)
(Places for Anthropology, Patrimony, language and ethnicity). E-mail:
[email protected].

Karl Gratzer is a Professor in Entrepreneurship and Economic History at the Department of

Social Sciences at Södertörn University. During the last years his research has mainly focused
on entrepreneurship and growth within the agro-food sector, especially within the field of the
New Rurality and on issues concerning processes of privatization in Baltic countries. E-mail:
[email protected].

Ulf Jonsson is a Professor Emeritus from the Department of Economic History at Stockholm
University, where he is still partly active as a teacher, scholar and PhD supervisor. During his
career he has published a vast number of articles and books on agro-food history, with a
special emphasis on globalization. E-mail: [email protected].

Håkan Jönsson is an associate professor in ethnology. He is affiliated to the department of

Arts and Cultural Sciences at Lund University. He has conducted research on food from a
number of perspectives. One of his latest publications is ”The Gastronomic Revolution” ( Den
Gastronomiska Revolutionen), Carlssons Förlag 2012. E-mail: hå[email protected].

Paulina Rytkönen is an associate professor in Economic History at Södertörn University. Her

research has dealt with rural entrepreneurship, agricultural and rural development, as well as
local processes and the impact of globalization on the agro-food sector. The geographical
focus of her research grasps Latin American countries, as well as European and the main
sectors dealt with are the dairy sector and the wine sector. Her latest book is “Från
Matproduktion till Gastronomi” (From Food Production to Gastronomy), COMREC Studies
in Environment and Development, 7. 2013. E-mail: [email protected].

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Stockholm Studies in Economic History

Editors
Thomas Jonter, Mats Morell, Paulina de los Reyes and Johan Söderberg
Stockholm Studies in Economic History

1. Olle Lundsjö, Fattigdomen på den svenska landsbygden under 1800-talet. (Rural Poverty in Sweden during
the Nineteenth Century). 1975. 208 pp. Out of print.
2. Eva M. Hamberg, Studier i internationell migration. (Studies in International Migration). 1976. x + 119 pp.
3. Sture Martinius, Peasant Destinies. The History of 552 Swedes born 1810-12. 1977. 154 pp.
4. Johan Söderberg, Agrar fattigdom i Sydsverige under 1800-talet. (Agrarian Poverty in Southern Sweden
during the Nineteenth Century). 1978. 217 pp.
5. Ulf Jonsson, Jordmagnater landbönder och torpare i sydöstra Södermanland 1800-1880. (Magnates Tenants
and Crofters in Southeastern Södermanland). 1980. 231 pp.
6. Ronny Pettersson, Laga skifte i Hallands län 1827-1876: Förändring mellan regeltvång och handlingsfrihet.
(The Third Phase of Enclosure in the Province of Halland: Change between Coercive Measures and
Freedom of Action). 1983. 386 pp.
7. Anu-Mai Köll, Tradition och reform i västra Södermanlands jordbruk 1810-1890. Agrar teknik i
kapitalismens inledningsskede. (Agricultural Tradition and Reform in Western Södermanland 1810-
1890). 1983. 252 pp.
8. Arne Jarrick, Psykologisk socialhistoria. (Psychological Social History). 1985. 256 pp.
9. Satya Brata Datta, Capital Accumulation and Workers' Struggle in Indian Industrialisation: The Case of Tata
Iron and Steel Company 1910-1970. 1986. 295 pp.
10. Lars-Erik Bjessmo, Industrin i Södertälje 1920-1970. En ekonomisk-historisk studie av industriell
förändring. (Industrial Firms and Manufacturing in Södertälje 1920-1970: A Study in the Economic
History of Industrial Change). 1987. 236 pp.
11. Makonen Getu, Socialism, Participation, and Agricultural Development in Post-revolutionary Ethiopia: A
Study of Constraints. 1987. 225 pp.
12. Gunilla Peterson, Jordbrukets omvandling i västra Östergötland 1810-1890. (Transformation of Agriculture
in Western Östergötland 1810-1890). 1989. xv + 241 pp.
13. Jan-Olov Jansson, Arbetsorganisationen vid Motala verkstad 1822-1843: Den engelska tiden. (Work and
Workers in the Early Swedish Mechanical Engineering Industry — the Case of Motala verkstad). 1990.
222 pp.
14. Sven Fritz, Affärsbankernas aktieförvärvsrätt under 1900-talets första decennier. 1990. 181 pp.
15. Janken Myrdal & Johan Söderberg, Kontinuitetens dynamik. Agrar ekonomi i 1500-talets Sverige.
(Dynamics of Continuity: the Agrarian Economy of Sixteenth-Century Sweden). 1991. 578 pp.
16. Eva Hesselgren, Vi äro tusenden. Arbets- och levnadsförhållanden inom svensk textilindustri med särskilt
avseende på Gamlestadens Fabrikers AB 1890-1935. (We in our Thousands... Working and Living
Conditions in the Swedish Textile Industry, with Special Reference to Gamlestadens Fabrikers AB,
1890-1935). 1992. xii + 223 pp.
17. Christer Persson, Stockholms klädesmanufakturer 1816-1846. (The Cloth Manufacturing Industry in
Stockholm 1816-1846). 1993. 186 pp.
18. Johan Söderberg, Civilisering, marknad och våld i Sverige 1750-1870. En regional analys. (The
Civilizing Process, Markets, and Violence in Sweden 1750-1870. A Regional Analysis). 1993. 290 pp.
19. Rita Bredefeldt, Tidigmoderna företagarstrategier. Järnbrukens ägar- och finansieringsförhållanden under
1600-talet. (Early Modern Entrepreneurs. Ownership and Financing of Swedish Ironworks in the 17th
Century). 1994. 218 pp.
20. Sven Fritz, Louis Fraenckel 1851-1911. Bankman och finansman. 1994. 349 pp.

217
21. Kirsti Niskanen, Godsägare, småbrukare och jordbrukets modernisering. Södermanlands län 1875-1935.
(Large Farmers, Small Farmers and the Modernisation of Agriculture. Södermanland County, Sweden,
1875-1935). 1995. 275 pp.
22. Eva Eggeby, Vandringsman, här ser du en avmålning av världen. Vårdade, vård och ekonomi på Danvikens
dårhus 1750-1861. (Wanderer, Here You See a Picture of the World. Institutional Care and Economy at
Danviken Lunatic Asylum 1750-1861). 1996. 292 pp.
23. Karl Gratzer, Småföretagandets villkor. Automatrestauranger under 1900-talet. (Conditions for Small
Firms. Automatic Restaurants during the Twentieth Century). 1996. 326 pp.
24. Stefan Carlén, Staten som marknadens salt. En studie i institutionsbildning, kollektivt handlande och tidig
välfärdspolitik på en strategisk varumarknad i övergången från merkantilism till laissez-faire 1720-
1862. (The State as the Salt of the Market. A Study of Institutional Formation, Collective Action and
Pre-industrial Welfare Policy on a Strategic Commodity Market in the Transition from Mercantilism to
Liberalism 1720-1862). 1997. 359 pp.
25. Börje Bergfeldt, Den teokratiska statens död. Sekularisering och civilisering i 1700-talets Stockholm. (The
Death of the Theocratic State. Secularization and the Civilizing Process in Eighteenth-Century
Stockholm.) 1997. 225 pp.
26. Susanna Hedenborg, Det gåtfulla folket. Barns villkor och uppfattningar av barnet i 1700-talets Stockholm.
(The Enigmatic People. The Conditions and Conceptions of Children and Child-hood in 18th Century
Stockholm). 1997. 321 pp.
27. Christer Franzén, Skuld och tanke. Svensk statsskuldsproblematik i ett internationellt perspektiv före 1930-
talet. (Debts and Opinions. Swedish Debt Problems in an International Context prior to the 1930’s).
1998. 340 pp.
28. Hans Andersson, ”Androm till varnagel...”: Det tidigmoderna Stockholms folkliga rättskultur i ett
komparativt perspektiv. 1998. (As a Warning to Others. Popular Legal Culture in Early Modern
Stockholm in a Comparative Perspective). 210 pp.
29. Bo Franzén, Sturetidens monetära system. Pant eller penningar som information i köpstaden Arboga. (The
Swedish Monetary System in Late Medieval Times. Pawn or Money as Information in the Trading
Town of Arboga 1450-1523). 1998. 309 pp.
30. Arne Jansson, From Swords to Sorrow. Homicide and Suicide in Early Modern Stockholm. 1998. 197 pp.
31. Kirsti Niskanen (red.), Föreställningar om kön. Ett genusperspektiv på jordbrukets modernisering. (Notions
of Gender. Agricultural Modernisation in Gender Perspective.) 1998. 131 pp.
32. Camilla Elmhorn, Brussels – A Reflexive World City. 2001. 369 pp.
33. Richard Palmer, Historical Patterns of Globalization. The Growth of Outward Linkages of Swedish Long-
standing Transnational Corporations, 1890s–1990s. 2001. 235 pp.
34. Leif Runefelt, Hushållningens dygder. Affektlära, hushållningslära och ekonomiskt tänkande under svensk
stormaktstid. (The Virtues of Householding. Economic Thought and the Theories of Passions and of
Householding in Seventeenth-Century Sweden.) 2001.298 pp.
35. Johan Söderberg & Janken Myrdal, The Agrarian Economy of Sixteenth-Century Sweden. 2002. 253 pp.
36. Kenth Hermansson, I persuadörernas verkstad. Marknadsföring i Sverige 1920-1965 – en studie av ord och
handling hos marknadens aktörer. (In the Workshop of the Persuaders. Marketing in Sweden 1920-
1965. A Study of Word and Action of the Actors at the Market.) 2002. 357 pp.
37. Kalle Westberg, Var optimist! AGAs innovativa verksam-het 1904-1959. (Be An Optimist! Inventive
Activity at AGA 1904-1959.) 2002. 163 pp.
38. Per Eriksson, Stadshypoteks plats och bana inom det svenska kreditväsendet 1909-1970. (The
Stadshypotek's Role and Place in the Swedish Credit System 1909-1970: A Socio-historical Study.)
2004. 272 pp.
39. Karin Åmossa, Du är NK! Konstruktioner av yrkesidentiteter på varuhuset NK ur ett genus och
klassperspektiv 1918-1975. (You are NK! Constructions of Work Identities at the Department Store NK
from a Gender and Class Perspective 1918-1975.) 2004. 213 pp.
40. Per Borg, Systemskifte – en studie av tröghet vid fyra brytpunkter inom svensk välfärdspolitik.
(Transformation of Welfare Systems. A Study of Slowness at Four Breaking Points in Swedish Welfare
Policy.) 2004. 307 pp.
41. Rodney Edvinsson, Growth, Accumulation, Crisis – With New Macroeconomic Data for Sweden 1800-
2000. 2005. XX + 433 pp.
42. Jonathan Metzger, I köttbullslandet. Konstruktionen av svenskt och utländskt på det kulinariska fältet. (In
the Land of Meatballs: The Historical Construction of Swedishness and Foreignness in the Culinary
Field.) 2005. 423 pp.

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43. Leif Runefelt, Dygden som välståndets grund. Dygd, nytta och egennytta i frihetstidens ekonomiska
tänkande. (Virtue as the Foundation of Wealth. Virtue, Utility, and Self-Interest in the Economic Ideas
of the Age of Liberty.) 2005. 216 pp.
44. Per Simonsson, Bidrag till familjens ekonomiska historia. Inflytande över konsumtionen inom svenska
hushåll under 1900-talet. (Contributions to an Economic History of the Family. Influence on
Consumption Decisions during the 20th Century.) 2005. 209 pp.
45. Therese Nordlund, Att leda storföretag: en studie av social kompetens, och entreprenörskap i näringslivet
med focus på Axel Ax:son Johnson och J. Sigfrid Edström, 1900–1950. (Big Business Leadership: A
Study of Social Competence and Entrepreneurship in Swedish Industry with Focus on Axel Ax:son
Johnson och J. Sigfrid Edström, 1900-1950.) 420 pp.
46. Lena Molin, Nyttiga bakterier och sjuka djur. En technoscience-resa från nätverksbildning till
riskkonstruktion. (Healthy Bacteria and Sick Animals. A Technoscience-journey from Network to
Risk.) 2005. 344 pp.
47. Akhil Malaki, Informal Finance and Microfinance in Jamaica and Trinidad & Tobago: An Institutional
Study. 2005. 171 pp.
48. Marcus Box, New Venture, Survival, Growth. Continuance, Termination and Growth of Business Firms
and Business Populations in Sweden During the 20th Century. 2005. 230 pp.
49. Johanna Sköld, Fosterbarnsindustri eller människokärlek. Barn, familjer och utackorderingsbyrån i
Stockholm 1890–1925. (Foster Child Industry or Humanistic Compassion. Children, Families and the
Out-placement Bureau in Stockholm 1890–1925.) 2006. 449 pp.
50. Bo Franzén, Folkungatidens monetära system. Penningen mellan pest och patriarkat 1254–1370. (The
Monetary System of the Folkunga Era. The Swedish Pence between Pestilence and Patriarchy 1254–
1370.) 2006. 306 pp.
51. Ilja Viktorov, Fordismens kris och löntagarfonder i Sverige. (The Crisis of Fordism and Wage-Earner
Funds in Sweden.) 2006. 311 pp.
52. Dag Retsö, Människans mobilitet och naturens motsträvighet. Studier kring frågan om reshastighet under
medeltiden. (Man's Mobility and Nature's Obstinacy. Studies in the Speed of Travel during the Middle
Ages.) 2007. 144 pp.
53. Lisbeth Söderlund, Making Corporate Social Responsibility an International Concern. Norm Construction
in a Globalizing World. 2007. 294 pp.
54. Soheyla Yazdanpanah, Att upprätthålla livet. Om lågavlönade ensamstående mödrars försörjning i Sverige.
(Supporting Livelihood. Low-paid Single Mothers' Sustenance in Sweden.) 2008. 302 pp.
55. Bengt Svensson, Seven years that shook Soviet economic and social thinking. Reflections on the revolution
in communist economics 1985–1991. 2008. 174 pp.
56. Dag Retsö, Länsförvaltningen i Sverige 1434–1520 (Local Fiscal Administration in Sweden 1434-1520).
2009. 452 pp.
57. Bo Franzén, Emancipation och urbanisering i medeltidens Sverige. Trender mot ett mer fritt och rörligt
feodalt samhälle cirka 1200-1527 (Emancipation and Urbanization in what was to become Sweden,
circa 1200 to 1527.) 2009. 93 pp.
58. Thomas Jonter & Ilja Viktorov (ed.), Energy and Security in the Baltic Sea Region: Research papers in
International Relations. 2011. 208 pp.
59. Johanna Andersson Raeder, Hellre hustru än änka. Äktenskapets ekonomiska betydelse för frälsekvinnor i
senmedeltidens Sverige. 2011. 1760 pp.
60. Sven Hellroth, Från arbetsstatistik till konjunkturöversikt. Arbetarfrågan och etableringen av en statlig
konjunkturbevakning i Sverige 1893-1914. 2011. 328 pp.
61. Paulina Rytkönen, Luis Arturo Garcia Hernandez and Ulf Jonsson (eds), From Local Champions to Global
Players, Essays on the history of the dairy sector. 2013. 221 pp.

Orders for single volumes can be addressed directly to the distributor:

Stockholm University Library
SE-10691 Stockholm
Phone: +46(0)8-162952
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Acta Universitatis Stockholmiensis publications

Corpus Troporum
Romanica Stockholmiensia
Stockholm Cinema Studies
Stockholm Fashion Studies
Stockholm Slavic Studies
Stockholm Studies in Baltic languages
Stockholm Studies in Classical Archaeology
Stockholm Studies in Comparative Religion
Stockholm Studies in Economic History
Stockholm Studies in English
Stockholm Studies in Ethnology
Stockholm Studies in Film History
Stockholm Studies in History
Stockholm Studies in History of Ideas
Stockholm Studies in History of Literature
Stockholm Studies in Human Geography
Stockholm Studies in Modern Pholology. N. S.
Stockholm Studies in Musicology
Stockholm Studies in Philosophy
Stockholm Studies in Russian Literature
Stockholm Studies in Scandinavian Philology. N. S.
Stockholm Studies in Social Anthropology, N. S.
Stockholm Studies in Sociology. N. S.
Stockholm University Demography unit – Dissertation Series
Stockholmer germanistische Forschungen
Studia Fennica Stockholmiensia
Studia Graeca Stockholmiensia, Series Neohellenica
Studia Juridica Stockholmiensia
Studia Latina Stockholmiensia

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