Belgium Fruit-Auction Co-Operatives

RENCOM - Workpackage 4 - Belgian case studies: Fruit wholesales Page 1 The structuration of a free market: the case of fruit wholesales in Haspengouw1 In the Haspengouw area fruit farmers are united in co-operatives, which organise fruit wholesales and auctions. The co-operatives set up the entire infrastructure that allows for a transparent market: they guarantee the quality of the fruit; they make it quantifiable; they take care of logistics; and they set up the auctions. In line with actor-network-theory (ANT) the case illustrates the co-operation and networking that is needed between several actors in order to come to a seemingly natural situation, i.e. free trade. 1. Introduction: the fruit production in Haspengouw Geographical and political definitions of Haspengouw The definition of Haspengouw varies. Geographically, it refers to a large area of clay soil. It not only includes the south of the present Limburg province (Humid Haspengouw—area 8.4 on Figure 1 in annex) but also parts of the present provinces of Liège and Namur (Dry Haspengouw—area 8.5). The soil of Dry Haspengouw is a large bed of clay (15-20m) that rests on chalk; it is apt for agriculture. Humid Haspengouw is a bed (+ 2m) of loam that rests on clay; which makes it less apt for agriculture in general, but very apt for fruit growing (Comenius project 2004). Politically, Haspengouw once was a ‘gau’, the administrative unit in the Frankish empire. Until the eighteenth century Haspengouw used to be a county. It was part of the principality of Liege. In this text Haspengouw refers to the definition that is used by the Streekplatform Haspengouw, an organisation financed by the Flemish government and the European Commission (see Figure 2 in annex). It refers to a smaller area which comes closest to Humid Haspengouw (geographical definition) or the south of Limburg (political definition). The municipalities are: Gingelom, Nieuwerkerken and Sint-Truiden (which are part of the Hasselt district), Alken, Bilzen, Borgloon, Heers, Herstappe, Hoeselt, Kortessem, Riemst, Tongeren, and Wellen (which cover most of the Tongeren district) and finally Halen, Herk- de-Stad and Voeren. The Streekplatform is a supplier of socio-economic data and a facilitating actor in regional development. An agricultural area Haspengouw most importantly is an agricultural area. Industrial development is mostly limited to the city areas around Sint-Truiden (St. Trond) and Tongeren (Tongres). Although the city of Hasselt itself lies outside Haspengouw, the north of Haspengouw also includes industrial areas around Hasselt. (Streekplatform 2003a). Agriculture includes farming on the one hand and fruit production on the other hand. Mainly in the northern and eastern parts of Haspengouw cereals, industrial and fodder crop, potatoes and - typically - beet are cultivated. In the whole of Haspengouw cattle-breeding is important. The breeding is mainly centred on meat-production, although in the eastern parts of Haspengouw milk cows are important too. Pig-farms are primarily concentrated in the 1 Some of the supplementary background information of this article is based on an interview of Filip Lowette (Belgische Fruitveiling, Sint-Truiden) on 19 May 2004 by Jacques Vilrokx and Jan De Schampheleire. RENCOM - Workpackage 4 - Belgian case studies: Fruit wholesales Page 2 south-east (i.c. the area of Riemst and Tongeren). Poultry farming has concentrations in several areas: egg laying poultry in Tongeren, Alken, Halen, Heers, Bilzen and Voeren, and, more importantly, poultry for meat-production in Sint-Truiden, Nieuwerkerken, Kortessem, Bilzen and Tongeren. (Streekplatform 2003b). Fruit production for an international market As they represent some 15% of agricultural production, fruit and vegetables are the primary non-livestock production sector in Belgian agriculture (EC 2003). In Haspengouw, fruit covers 20% of the agricultural production. It is the one agricultural product Haspengouw is best known for. Moreover, in spite of strong competition on the world market during the 1980s and 1990s, Belgium’s and Haspengouw’s fruit production have well stood. Belgium has a positive balance when it comes to the import and export of hard fruit and berries (see Table 1 in annex). In the EU-15, apples are the leading fruit (more than 9 million tonnes per year). Apples also cover 49,9% of the Haspengouw 2001 fruit cultivation (most commonly: “Jonagold”) (see Table 2 in annex). There however is strong world competition on the apple market (Asia, South-America). As a result, Haspengouw is reorienting itself to new varieties of apples and to other kinds of fruit, notably berries. From 1991 to 2001, the area of fruit cultivation in Haspengouw has increased by 33%. Most notably, the Haspengouw cultivation of pears has more than doubled. The same increase can be noted for berries (strawberries, berries and raspberries), although in absolute terms this production is still of less importance (see Table 3 in annex). Pears now cover 29,2% of production. Next come cherries (9,2%), strawberries (5,7%) and berries and raspberries (6,4%). Finally, fruit tree cultivation covers 5,4% of the production. Although Haspengouw fruit is being distributed on a European and global market, production is done by thousands of relatively small scale farmers. At present there are some 2500 self- employed fruit farmers in Haspengouw, while seasonal work involves some 26.000 workers (Streekplatform July 2003b). Producers associations Most typically for the Netherlands and Belgium, more than 70% of all fruit and vegetable production is marketed through producers associations (EC 2003, p. 5). In contrast, the European mean is only 40%, and the percentage is even lower in France, Spain and Italy, the three most important fruit producing Member States (Ministerie van de Vlaamse Gemeenschap 2003, p. 9). Moreover, while in Spain, there are thousands of producers associations, in Belgium the lion share of sold products is taken by only a few associations (Ministerie Vlaamse Gemeenschap 2003, p. 7). In Flanders, 13 producers associations make up a total of 17.200 members. In Haspengouw there are four associations: the Belgische Fruitveiling CV (BFV) (Sint-Truiden), the Veiling Borgloon CV (Borgloon), the Veiling Haspengouw CV (Sint-Truiden) and the Limburgse Tuinbouwveiling CV (Herk-de-Stad). The producers associations are legally defined as co-operatives. Already in the 1920s small numbers of fruit farmers united in local co-operatives, organising their own fruit sales. Most farmers would sell their fruit to export firms, while these firms easily took advantage of the competition between producers. After WWII the fruit co-operatives started to gain importance. A steady process of scale enlargements and merging let to the present situation. RENCOM - Workpackage 4 - Belgian case studies: Fruit wholesales Page 3 The fruit producers themselves strongly identify with the Haspengouw area and its history (they do not identify with the administrative districts of Tongeren or Hasselt). Clubs and trade marks refer for example to Hesbania, the ancient name of Haspengouw, or to Trudo, a seventh century abbot and patron of the fruit producers. 2. Structure requirements for a market Producers associations can be said to create the circumstances that economic theory assumes to be naturally present. To clarify this point we first have to review some elements of (classic) micro-economic theory and compare them with economic sociology. Micro-economic theory is built upon the concept of full competition between all economic actors (i.e. every producer/seller competes with all other producers/sellers; every consumer/buyer competes with all other consumers/buyers). This concept for its part is based on four conditions2 that we can describe as follows: • Atomicity of the actors: no individual seller nor buyer has a noticeable influence on the price settlement (i.e. the actors involved are high in number and of more or less equal power). • Transparency of the market: there is directly available information on what is being sold, when it is being sold, and how the price is being settled. • Fluidity of the market: there is direct possibility to adapt offer and demand (i.e. buyers/sellers can easily increase or decrease their demand/offer) • Homogeneity of the product: each unit of a product has the same qualities; these qualities can be identified and denoted independently of the seller. Economic sociology (Economic sociology 2004) can be seen as an alteration of classic economic theory. On the one hand, it values economic theory, i.c. with regards to the concept of full competition. On the other hand, it states that economic theory is not a description but a prescription. It is a societal project that economic actors—entrepreneurs, who are often trained in classic economic theory—try to realise. The four conditions of full competition can therefore not be assumed to be pre-given. Economic actors have to bring forth a situation where these conditions are made to be true, for example by facilitating the information on offers and bids, or by preventing collusion possibilities between buyers. The economic actors are not stabilising or regulating a market, but actually making a market. On a broad scale, the EU, in its involvement for the common organisation of the market (COM), typically is an actor creating the conditions for economic theory to be true. It introduces regulations and structure in agricultural trade. It settles classifications and standards, in order to give products objective descriptions, independent of its producers. Similarly, on a smaller scale, producers associations are basically regulating and structurating the sales. As a consequence, the EU stimulates their role. 2 Cf. John Hicks, Value and Capital, 1946; J.P. Gould and C.E. Ferguson, Microeconomic theory, 1966, quoted in Marie-France Garcia, La construction sociale d’un marché parfait, Actes de la recherche en sciences sociales, Paris, Maison des Sciences de l'Homme, École des Hautes Études en Sciences Sociales, Centre de Sociologie Européenne, n° 65, p.

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