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Collective solution to falling prices: wine co-operatives in France, Italy and Spain, 1890-1980
| From the late nineteenth century, farmers co-operated in the production and sale of agricultural products with the aim of adapting themselves to new production conditions and the rising competition in markets. Wine co-operatives allowed small growers to improve the conditions of winemaking, to reduce unit production costs, to apply technical innovations and to reach economies of scale in marketing. Moreover, growers had incentives to establish winemaking co-operatives because the shortages of space in wine cellars that had been forcing them to sell their wines at lower prices immediately after the harvest. Despite the considerable advantages of a wine co-operative for small growers, few co-operatives were founded in wine-producing countries before 1914. Co-operation only diffused after the late 1930s in France and after 1950 in Italy and Spain. In this paper, the role of co-operatives as a governmental instrument for controlling the supplies that were to be placed in markets is considered as the main explanation for the late expansion in wine co-operatives and the differences in the diffusion of co-operatives in these countries. It is considered that the establishment of co-operatives was only possible with the financial support of the State, helping farmers to overcome the difficulties in raising the capital needed to construct the co-operative’s buildings and cellars. When the real prices of certain agricultural commodities slumped in the interwar period, governments looked at co-operatives as an indirect means for dealing with overproduction without directly intervening in markets. Thus, the rapid diffusion of wine co-operatives in France during the interwar period was possible because of indirect public support through long-term cheap loans. During the Great Depression co-operation was further stimulated by the French administration through the provision of short-term loans for storing wines until prices rose. As a consequence, during the interwar period more than 700 wine co-operatives were established in France, accounting for a third of French production.
In contrast, there were few co-operatives in Spain before 1950. This has been explained by the low support provided by the State to co-operation, resulting from weak public concern about the situation of growers. By contrast, the second half of the twentieth century witnessed an important growth in the number of wine co-operatives in Spain. After the crisis caused by the abundant harvest of 1953, the government promoted co-operation, especially in La Mancha, as an alternative to the public purchase of surplus wine. Besides long-term loans to co-operatives, Spain’s government provided co-operative members with short-term funding so as to encourage them to hold wine in cellars in periods of low prices. Both in France and Spain, co-operatives were concentrated in regions producing ordinary wines, as a public instrument to hold surplus wines, thereby discouraging investment in quality. Moreover, the remuneration of members depended on the quantity and weight of grapes delivered to the co-operative, so that they provided incentives to increase production rather than to improve quality.
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