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From Local Champions to Global Players Essays on the History of the Dairy Sector

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From Local Champions to Global Players Essays on the History of the Dairy Sector 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 ii © 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 iv 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 v 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 vi vii 8 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 19th 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). 9 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,
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