XIV Congreso Internacional de Historia Agraria (SEHA) - Sociedad ...

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de las existentes entonces en España, la mayoría de ellas en la provincia de ..... produced nearly as much as Catalonia (25 % of total wine production), and the ...
XIV Congreso Internacional de Historia Agraria (SEHA) Badajoz, 7-9 Noviembre 2013 Sesión: Instituciones, desarrollo, cooperación y conflicto agrario

Título: La emergencia del cooperativismo vitivinícola en Cataluña Autor: Jordi Planas (Universitat de Barcelona) Resumen: Las primeras décadas del siglo XX fueron un período enormemente crítico para la evolución del sector vitivinícola. La replantación del viñedo después de la plaga de la filoxera tuvo unos costes muy altos y la evolución de los precios del vino no permitió recuperar la inversión. Al contrario, los precios bajos se convirtieron más en la regla que la excepción, como resultado de una situación de sobreproducción crónica en el mercado internacional. Una de las soluciones se buscó en la formación de cooperativas, para disminuir los costes de producción del vino mediante la elaboración en común, eliminar intermediarios en la comercialización del producto y aprovechar las economías de escala en la adquisición de insumos agrícolas (fertilizantes químicos y productos anticriptogámicos como el azufre y el sulfato de cobre, que eran mucho más imprescindibles para las nuevas viñas). Estas ventajas tenían que estimular la creación de cooperativas vitivinícolas durante los primeros años del siglo XX que fueron tan críticos en la evolución del sector. Sin embargo, la historiografía ha señalado la debilidad del cooperativismo vitivinícola en España hasta bien entrado el siglo XX. En el contexto español, Cataluña constituye una excepción: a mediados de los años 1930, en Cataluña había en funcionamiento unas ochenta bodegas cooperativas y concentraba tres cuartas partes de las existentes entonces en España, la mayoría de ellas en la provincia de Tarragona, donde algunos de sus imponentes edificios recibieron el apelativo de “catedrales del vino”. Analizando este caso regional, esta comunicación analiza los obstáculos de todo tipo que estas primeras bodegas cooperativas tenían que afrontar para ser competitivas en un mercado de vino deprimido (como la financiación de la construcción de la bodega, la organización de la producción vinícola y de otros servicios cooperativos, la comercialización del vino), y de qué forma pudieron superarse; y también analiza los estímulos que hicieron possible en Cataluña la creación y desarrollo de un número de bodegas cooperativas muy superior al de otras regiones vitícolas españolas.

Abstract: The first decades of the twentieth century were highly critical period for the development of the wine sector. The vineyard replanting after phylloxera plague had very high costs and the evolution of the wine prices did not allow to recover the investments. On the contrary, low prices became more the rule than the exception, as a result of a chronical overproduction in the international market. One solution was sought in the creation of cooperatives. Winegrowers could reduce production costs by elaborating and marketing wine together, and purchase at lower prices some required

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agricultural inputs, as chemical fertilizers and fungicides such as sulfur and copper sulphate, which were necessary for new vineyards. All these advantages were to stimulate the creation of wine cooperatives in the early years of the twentieth century that were so critical for the sector. However, scholars have pointed out the weakness of agricultural cooperativism in Spain up to well into the twentieth century. In the Spanish context, Catalonia was an exception: in the mid-1930s, there were 80 wine cooperatives, that is three quarters of all existing in Spain. Most of them were built in the southern counties, where some of their magnificent wine cellars were known as “wine cathedrals”. Focusing in this regional case, this paper aims to analyze the obstacles of all kinds that early wine cooperatives had to face in terms of firms competing in a depressed wine market (such as financing the construction of cooperative wineries, governance and organization of cooperative services, marketing of wine), as well as how they could be overcome, and, at the same time, what were the stimuli that made possible the creation of many more wine cooperatives than other winegrowing regions.

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The emergence of winemaking cooperatives in Catalonia Jordi Planas (Universitat de Barcelona)

1. Introduction1 The first decades of the twentieth century were highly critical period for the development of the wine sector. The vineyard replanting after phylloxera plague had very high costs and the evolution of the wine prices did not allow to recover the investments. On the contrary, low prices became more the rule than the exception, as a result of a chronical overproduction in the international market (Pujol, 1986; PanMontojo, 1994; Simpson, 1997; Carmona et al., 2001; Simpson, 2011). One solution was sought in the creation of cooperatives. Winegrowers could reduce production costs by elaborating and marketing wine together, and purchase at lower prices some required agricultural inputs, as chemical fertilizers and fungicides such as sulfur and copper sulphate, which were necessary for new vineyards. Wine cooperatives improved industrial process for those producers with insufficient means, increasing wine quality and making the most of by-products. Small growers could focus their energies on cultivating their vines, shifting to the cooperative the costs of processing and selling the wine. At the same time, cooperatives increased their bargaining power in the market, since individually they were forced to sell grapes or wine when prices were low, due to the lack of cash flow or storage capacity to wait for a positive evolution of the prices. The joint sale allowed to eliminate intermediaries and

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This paper is a work in progress and part of a larger research project with financial assistance provided by HAR2012-38920-C02-02.

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increase the price of the wine, and cooperatives could also act as banks and provide loans to their members. All these advantages were to stimulate the creation of wine cooperatives in the early years of the twentieth century that were so critical for the sector. However, scholars have pointed out the weakness of agricultural cooperativism in Spain up to well into the twentieth century (Pan-Montojo, 1994: 362-365; Simpson, 1997 and 2000; Carmona & Simpson, 2003; Garrido, 2007). Before the Spanish Civil War (1936-1939) there were only about one hundred wine cooperatives operating in Spain, while in the 1970s that figure was over 800 (Fernández, 2008: 165-166; Piqueras, 2010; Medina, 2011: 173). In France, in contrast, there were 827 wine cooperatives operating in 1939, a similar number of the existing wine cooperatives in 2000 (Lachiver, 1988: 498; Chevet, 2009). In the Spanish context, Catalonia was clearly an exception: in the mid-1930s, there were 80 winemaking cooperatives operating in Catalonia, that is three quarters of all existing in Spain. Most of them were built in the southern counties, where some of their magnificent wine cellars were known as “wine cathedrals”. However, when we look at the whole sector, we can find wine cooperatives with very little capital, with severe financing problems, little participation in marketing and, thus, a weak position in the commodity chains (Saumell, 2002). Focusing in this regional case, this paper aims to analyze the obstacles of all kinds that early wine cooperatives had to face in terms of firms competing in a depressed wine market (such as financing the construction of cooperative wineries, governance and organization of cooperative services, marketing of wine), as well as how they could be overcome, and, at the same time, what were the stimuli that made possible the creation of many more wine cooperatives than other winegrowing regions. The paper looks for the reasons behind the Catalan exception in the Spanish context, that is, why were there many more wine cooperatives in Catalonia than in other

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winegrowing regions in early twentieth century, and, at the same, tries to see what were the obstacles that hindered their further development. The paper is organized as follows. Firstly, it describes the emergence of winemaking cooperatives in Catalonia in early twentieth century, in a context of a depressed wine market, paying attention to the evolution of wine cooperative foundations and their geographical concentration. In the next two sections we point out the main reasons behind this trend. Section three looks for the incentives that explain why many more wine cooperatives were founded in Catalonia than in other winegrowing regions. Section four explains the obstacles that these organizations faced for their development and why in the period analyzed they could not go any further. The paper ends with some brief conclusions.

2. The early winemaking cooperatives in Catalonia From 1860 to 1880 Catalan viticulture had experienced a strong growth as a result of the destruction of French vineyards by the phylloxera plague. This situation had led to export large quantities of wine at very remunerative prices. However, since 1879 the phylloxera insect also invaded Catalonia and in the last decade of the nineteenth century the plague completely destroyed its vineyards (Iglésies, 1968; Piqueras, 2010). The only way to stop the phylloxera plague was uprooting the old vines and replanting vineyards with American vines, which were immune to the insect. But the enormous effort of replanting was not rewarding, since in the early twentieth century the new wine markets situation led to several overproduction crisis (Pujol, 1988; Simpson, 1997:275-85). From 1890 to 1922 there have been described 13 years of very low prices in Catalonia (1892, 1893, 1894, 1900, 1901, 1905, 1907, 1908, 1909, 1914, 1918, 1920, 1921), when wine was sold at a loss, while in the previous period, from 1850 to 1890 (40 years), there had been none (Raventós, 1923). And during the 1920s and 1930s the wine prices did no recover: as we can see in Figure 1, except for

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the exceptional period of World War One, wine prices did not recover the starting level and were especially low in 1905-10, 1920-25 and 1930-35. From 1890 onwards the price tendency was clearly falling down.

Figure 1. Wine prices in Catalonia, 1890-1935 (1913 ptas). 45

40

35

30

25

20 y = -0,0887x + 17,70 15

10

pta / hl

7 years averages

1930

1920

1910

1900

1890

5

tendency

Source: Colomé, Garcia, Planas & Valls-Junyent (2013).

As happened in France, one of the winegrowers responses to this market situation was building winemaking cooperatives. Wine cooperatives could reduce winemaking costs by collective elaboration, improve the wine quality and remunerate it better with the joint sale; cooperation also allowed winegrowers to purchase in better conditions chemical fertilizers and anticryptogamic preparations such as sulfur and cooper sulfate, which were necessary for the new vines, and cooperatives could not only assure the purchase of all harvests of their members, but provide them with loans until the wine was sold. When the “golden age” of wine prices (1860-1880) was over,

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the only way to face the new markets situation was industrializing winemaking, and cooperatives was one way to do so (Pan-Montojo, 1994: 348-73). In Catalonia, the first experience of cooperation in winemaking is found in the 1890s: in the little village of Barberà, in the southern county of Conca de Barberà, some small winegrowers grouped together and rented cellar facilities and equipment for winemaking; later on, in 1901, they built their own winery which had to be enlarged in 1911 and again in 1929 to reach a capacity of 18.000 hectoliters (Fuguet & Mayayo, 1994; Mayayo, 1984; Mayayo, 1986). At this time, agricultural cooperatives had started to spread in Catalonia, but building a wine cellar was very uncommon. For example, one of the first agricultural cooperatives in Catalonia, founded in Valls in 1888, started to elaborate wine in 1898, but never built a cellar (Gavaldà, 1889: 202). After the example of Barberà, in the first decade of the twentieth century we only know the building of another wine cooperative in Alella (1907), in this case by the initiative of wealthy landowners who tried to improve the quality of the wine produced in the area and absorb the marketing functions of merchants by selling bottled and fine wines using a brand name. This was quite an exceptional case, because most wine cooperatives sold table wines of low or medium quality to local merchants, and only very few sold bottled wine. Their leaders tried to take advantage of the Agricultural Syndicates Act (1906), which boosted the diffusion of agricultural cooperatives (Garrido, 1996); but not other winemaking cooperatives were founded until the second decade of the century.

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Figure 2. Winemaking cooperatives operating in Catalonia, 1900-1936.

Sources: see the text.

Figure 2 shows the evolution in the number of winemaking cooperatives operating in Catalonia during the first decades of the twentieth century. As no reliable statistics are available, it has been elaborated using different archive sources and specific bibliography, taking into account the first harvest elaborated by the cooperative 2 . We can see that before 1917 there were only sixteen winemaking cooperatives operating in Catalonia; but during the next 8 years (1917-1924) 49 new cooperative wineries were built, that is nearly two thirds of all the wine cooperatives founded in Catalonia in the whole period (1900-1936), and nearly half the ones operating in Spain in the 1930s. In the next 12 years (1925-1936) only 15 new winemaking cooperatives were built, although some were planned and couldn’t be finished before the Civil War broke out. Three main factors can explain the outburst in the creation of wine cooperatives in this second period (1917-1924). First of all, the difficulties in supplying chemical 2

Most of the archive sources used to elaborate Figure 2 and Figure 3 are from the Agricultural Technical Services of the Catalan Government (Arxiu Nacional de Catalunya, Fons Serveis Tècnics d’Agricultura, caixes 12, 14, 18).

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products (such as sulfur and copper sulphate which were used to fight vine deseases as mildew), because of the market distortion caused by the First World War. In 1915 a mildew attack meant the loss of nearly all vine harvests 3, and probably prompted winegrowers to group together and face wine crisis. Secondly, the social unrest and mobilization of farmers (and especially winegrowers) during these critical years led to the foundation of many agricultural associations (Mayayo, 1995; Garrido, 1996; Pomés, 2000). Some of them were founded to prevent social struggle and to avoid the creation of labourers unions, by providing cooperative services. This is why in some municipalities we find two cooperatives (one founded by small producers and another one founded by wealthy landowners) both elaborating wine and offering similar services to winegrowers. Thirdly, the contribution of the Catalan public administration, which compensated the poor contribution of the Spanish government: nearly all the winemaking cooperatives founded in Catalonia in early twentieth century received some kind of financial or technical help by the Catalan government. This is an important factor to explain the exception of Catalonia in the Spanish context, as we will see later. Figure 3 shows the localization of the winemaking cooperatives founded in Catalonia in the period analyzed. We can see an uneven distribution in winegrowing areas. They highly concentrate in some areas, not exactly according to the specialization in winegrowing. Only 20 % of the wine cooperatives were created in the most specialized counties. For instance, in the highest specialized region of Penedès only 8 wine cooperatives were founded: Alt Penedès (5) and Baix Penedès (3). On the contrary, the southern counties of Priorat (16), Conca de Barberà (14), Alt Camp (13), concentrated the majority (54 %) of wine cooperatives founded in Catalonia. Most of them were created in the second period (1917-1924), but it is in these southern counties where we can find also most of the first examples, especially in Conca de 3

Catalonia was the winegrowing región most affected by the mildew plague: wine production dropped to 1,25 million hl, when the average of previous years was 5,60 million hl, this is to say that about 80 % of the vine harvests were lost (Piqueras, 2010: 115-17).

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Barberà, which came to be the pioneer county (Mayayo, 1984 and 1986) and also Alt Camp (Gavaldà, 1989; Gavaldà & Santesmases, 1993). This suggests the importance of the successful experiences for the easy diffusion of cooperatives: as one observer noted, “there is nothing so important as the example to transmit the spirit of partnership” (Campllonch, 1917: 56). But it could also be related to the share of small landowners among winegrowers (which would be an incentive to participate in cooperatives) or, on the contrary, the extension of large landownership and sharecroppers. It is also possible that in winegrowing areas where merchants networks were more consolidated, the creation of wine cooperatives became more difficult, as it has been suggested for the Penedès region (Saumell, 2002; Medina, 2011).

Figure 3. Vineyard specialization and wine cooperatives diffusion in Catalonia (1900-1936).

Sources: percentage of cropland devoted to vineyards in the districts of Catalonia: Badia-Miró et al., 2010; winemaking cooperatives operating in Catalonia: see the text.

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Some of these wine cooperatives built very impressive cellars to be called “wine cathedrals” according to their size, although this denomination was also due to the fine modern style architecture (Lacuesta, 2009). But this was far from being the general feature of the winemaking cooperatives built in this period. Very few of them (Barberà, Espluga de Francolí, Falset, Gandesa, Llorenç del Penedès, Montblanc, Pinell de Brai, Rocafort de Queralt, Ripollet, Rubí, Sant Cugat del Vallès, Sarral, Vila-rodona) had a storage capacity for more than 14.000 hectoliters of wine, while the majority were winery cooperatives of medium or small size. Considering the membership, they were also small firms: if we take into account the membership who participated in winemaking (and not in other sections of these associations) very few were over 200 members and many wine cooperatives were under 100 members. However, this feature was not uncommon in other European regions at this time: in Roussillon (France) among thirty wine cooperatives only two were over 250 members (Moiset, 1926) and in Italy, among the twenty major wine cooperatives existing in 1931, only three were over 250 members and most of them had only about 100 members (Medina, 2011: 344).

3. Incentives for creating early wine cooperatives. In early twentieth century Catalonia concentrated about three quarters of all wine cooperatives built in Spain. This figure was clearly far above the proportion of its vine area, because Catalonia concentrated only 20 % of the Spanish area of vines and about 30 % of wine production. La Mancha, an inland region increasingly specialized in winegrowing, devoted to vines a larger area (30 % of all Spanish vineyards) and produced nearly as much as Catalonia (25 % of total wine production), and the Eastern regions of Valencia and Murcia concentrated nearly the same extension of vines (19%) and 15 % of total wine production. However, very few wine cooperatives were founded in these regions. In La Mancha one winemaking cooperative had been created as early

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as 1901 in Campo de Criptana; but its example was not followed until 1928, when three other winemaking cooperatives were founded in Socuéllamo, Tomelloso and Villarrobledo, and the great expansion of wine cooperatives was only after the Civil War. In the region of Valencia no winemaking cooperatives were founded until 1918, when the cooperatives of Torís, Cheste and Pedralba started to operate. And it was only after the creation of the Winegrowers Federation of Valencia and the National Winegrowers Confederation (1924), that a campaign to create wine cooperatives was launched in the region, but not more than ten were operating when the Civil War broke out. In Navarra, a region with a solid Catholic cooperative movement, the first winemaking cooperative started to operate in Olite in 1911; it was followed by the wine cooperatives of San Martín de Unx (1914 and 1916), Villafranca (1917), Cintruénigo (1920) and Pueyo (1921); but until the 1930s very few foundations were carried out and some wine cooperatives failed and disappeared (Piqueras, 2010). In other Spanish regions (Aragon, la Rioja, Galicia, Mallorca) winemaking cooperatives were really exceptional. Only in Catalonia these kind of cooperatives had a real significance in the first decades of the twentieth century. In this section we try to explain this abnormal trend of the region of Catalonia in the Spanish context. One of the factors is related to geography: the proximity with the Midi of France, where the winemaking cooperatives spread very early (Rinaudo, 1985; Gavignaud-Fontaine, 1986; Lachiver, 1988; Simpson, 2000), surely mattered. Wine cooperatives were a response to the new conditions of winemaking after the phylloxera plague, with the emergence of wine industry and the organized trade (Simpson, 2011). France was not only the major wine producer country, but also the first one to suffer the phylloxera plague and where the innovations were first carried out to overcome the new constraints of the wine production and the wine markets. Catalan winegrowers were well aware to all the solutions that were tested in France to face the ecological, economic and social crisis of the wine sector in late nineteenth century, and were also very attentive to the organization of the French cooperative movement. Catalonia was

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also the first major winegrowing region in Spain that was affected by the phylloxera plague, and the first one to have to deal with its consequences, as were the need to improve the wine elaboration and to reduce production costs to meet the low wine prices. The proximity of the French market was not only important for exporting but also because it was the driver of changes. Another factor is related to social capital and could be described as a positive outcome of civic associations (Putnam, 1993). It has been argued that the pre-existing stock of social capital played an important role in the emergence of agricultural cooperatives, pointing out the social networks built around common lands and irrigation communities (Beltrán, 2012). Personal links built around the pre-existing associations played a similar role by facilitating coordination and decision making, as well as mobilization and management of resources, moreover if we take into account that the creation of most of the winemaking cooperatives was an initiative taken by previously founded associations. That is the cas of the wine cooperative of Rubí, which was founded in 1919 as an autonomous section of the Agricultural Chamber, existing since 1906 under the leadership of the wealthy landowners of the locality. In fact, many winemaking cooperatives were created as specialized sections of pre-existing agricultural cooperatives. In the period analyzed, and in contrast with other Spanish regions, Catalonia had a dense network of associations facilitating cooperation in urban and rural areas (Gavaldà, 1989; Solà, 1993 and 1998; Mayayo, 1995; Garrido, 1996; Pomés, 2000; Planas, 2006). At the same time, in early twentieth century Catalan winegrowers were leading in Spain the mobilization to face the wine crisis. Cooperatives had a strong relationship with the winegrowers movement and its dense network provided social interaction and cohesion, as happened also in France (Roche-Agussol, 1924). Their leaders encouraged the creation of agricultural cooperatives in every municipality and, using as benchmark the French government’s support to cooperatives, they demanded the Spanish state support by providing technical and financial aid. At the same time,

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the organization of Catalan winegrowers (Unió de Vinyaters de Catalunya) approved the creation of a technical office to facilitate the creation of wine cooperatives and distilleries (1914), and in the early 1920s the organization was meant to group together the federations of wine cooperatives. The winegrowers organizations of Valencia and La Mancha promoted the creation of wine cooperatives too; but their federations were not created until 1924, more than ten years after the Catalan organization was set up. However, in contrast with the role played by the French government (Warner, 1960; Rinaudo, 1985; Gavignaud-Fontaine, 1986), the Spanish government didn’t help much to build wine cooperatives, neither with financial nor with technical assistance. An initiative in the Parliament to offer subsidies and loans to winemaking cooperatives (1914), never passed. On the contrary, after the Agricultural Syndicates Act (1906) Spanish administration was even reluctant to accept wine cooperatives as agricultural syndicates, as the first wine cooperative founded after this date could experience4. This is one of the main reasons of the different performance of the early wine cooperatives in both countries (Simpson, 2000), as wine cooperatives were very sensitive to the institutional framework. The exception of Catalonia can be explained for the same reason. In 1914 an autonomous

government

was

organized

which,

three

years

later,

received

competences in agriculture and could start a modern agricultural policy (Casanovas, 1996). In 1917 some agricultural technical services were created and in 1919 an official service was created to promote agricultural cooperatives, providing technical support, information and advice in the foundation and management of cooperatives. In charge of this service was one of the main leaders of the cooperative movement in Catalonia, Josep M. Rendé, who in 1913 had founded a wine cooperative in his hometown of Espluga de Francolí, and in 1916 brought together the southern cooperatives in the 4

The Wine Cooperative of Alella, founded in 1906, started to elaborate wine in 1907, but could not get the benefits provided to the agricultural cooperatives by the Agricultural Syndicates Act (1906) until its appeal to the Supreme Court, whose sentence on October 15th 1913 forced the government to accept it as syndicat. This judicial decision had important consequences for the cooperative movement, as it set a legal precedent and established jurisprudence.

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Agricultural Federation of Conca de Barberà. With the means provided with this official service, he intended to promote the creation of other wine cooperatives and organize federations to consolidate them (Gavaldà, 2005 and 2007). Another official service of the Catalan government was devoted specifically to viticulture and enology. It was created to provide technical and financial assistance to wine cooperatives, the same when they were building their cellars and acquiring machinery as when they started to elaborate wine. This official service took care of the designs for building new cooperative wineries and for the enlargement of the existing ones, and offered assistance for acquiring the required machinery. The wine cooperative was able choose the architect, but in most of the cases it was the architect appointed by the service. The Catalan public administration intended to create a Service for Agricultural Buildings, but had to reject it in 1918 due to the lack of resources, and so it was the wine cooperatives who had to pay the architect services. In any case, Cèsar Martinell, who was the architect appointed by the service, participated in the construction of more than twenty new cooperative wineries and in other twenty projects of new buildings or enlargement and renewal of the existing ones (Martinell, 1975). In 1937, this service had assisted more than fifty cooperatives in the process of building the wineries, and there were other fourteen cooperatives waiting for the assistance (Saumell, 2002: 83-84). The Viticulture and Enology Service also provided assistance in winemaking. This support was also very important, because small producers didn’t have the required skills to elaborate wine in large scale, and wine cooperatives couldn’t afford specialized technicians on staff. In the early 1920s at least 12 wine cooperatives were assisted by the official service for the winemaking campaigns. But after Primo de Rivera’s coup d’état the official services of the autonomous government were supressed (1924), and it was not until 1931, under the Second Spanish Republic, when they were reopened. In 1934 24 wine cooperatives were assisted by the service in winemaking a total amount of grapes of more than 20 Million kg. In 1936, when the

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Civil War had already started, the government intervention went further: the Viticulture and Enology Service took care of the winemaking process in 84 municipalities (totally in 48, partially in 36). In 64 of these localities (76 %) winemaking was carried out entirely by cooperatives, while in the other twenty localities only part of the wine elaboration was carried out by cooperatives (Casanovas, 1996). The building of new cooperative wineries was also affected by the Primo de Rivera’s dictatorship: as we can see in Figure 2, from 1925 to 1930 only 2 new wine cooperatives started to operate, while from 1917 to 1924 they were 49. During the Second Republic (1931-1936), when the Catalan autonomous government reopened the Viticulture and Enology Service, 13 new winemaking cooperatives started to operate, and when the Civil War broke out about twenty other were about to start the process of building a winery.

4. Obstacles to the development of wine cooperatives. One of the major difficulties for creating a winemaking cooperative was in financing the initial investment. The cost of building a wine cellar with a storage capacity of 10.000 hectolitres and the machinery to elaborate them was calculated in 100.000 ptas. (Riba, 1917). Taking on account a membership of about 160 (that many wine cooperatives did not reach), it was an initial investment of more than 600 ptas. per member –a contemporary estimation widens the range from 338 ptas. to 1.936 ptas (Torrejón, 1923: 51)– a huge amount for small winegrowers who didn’t earn much more than an agricultural worker: 7 ptas./ day in the 1920s (Garrabou, Pujol & Colomé, 1991). Such a large investment required external resources, because, at the same time, wine cooperatives had to offer their members a fair price for the wine they produced regarding the wine market prices. As members were mainly small producers with limited means, the lack of financial help made unfeasible most of the initiatives. As the example of France shows us, public financial help was most important for the development of wine cooperatives. In this country wine cooperatives could get

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long term public credit at a very low interest rate (1,5-2 %), but in Spain wine cooperatives only could get credit from private banks at a much higher rate (6 %), as the central bank’s policy was so restrictive for agricultural cooperatives, that most of them didn’t even try to get one (Campllonch, 1917: 32-34)5. This is the main reason why very few wine cooperatives were created in early twentieth century Spain6. The Catalan autonomous government tried to give financial assistance, but it had very few financial resources. Longterm loans at a low interest rate could be obtained from a public saving bank (Caixa de Crèdit Comunal) for building cooperative facilities. Loans could not exceed 50 % of the investment amount, and annual repayment and interests could not exceed 75 % of the average net revenues of cooperatives. With these conditions, among the thirty cooperatives that applied for the loans, only ten could get them. The total amount received by agricultural cooperatives was 757.250 ptas., which was 17.6 % of the capital of the public saving bank (Casanovas, 1998). About 60 % of these loans (447.100 ptas.) were received by wine cooperatives, but this is a total amount to build not more than four wineries. When we compare it with the contribution of some local banks, we see how limited was the contribution made by the public administration: the Bank of Valls provided loans to 16 cooperatives of the southern counties of Catalonia up to an amount of more than 3 Million ptas. (Mir, 1943; Gavaldà, 1989). Wine cooperatives no only required a high initial investment, but also a major discipline and commitment to collective action (much more than other agricultural cooperatives). Firstly, there was a commitment to stay, because members could not leave before the repayment of the investment. Secondly, they usually had to take all 5

According to this contemporary observer, the Banco de España “per tal de no prestar diners als Sindicags, cosa a la qual està obligada per virtut de la Base tercera del Conveni de 1902 entre l’Estat i el Banc i pel requeriment fet per Reial Ordre de 28 de juliol de 1915, ha posat tantes dificultats, ha demanat tants i tants requisits costosos i difícils de cumplir, que els Sindicats han renunciat a ésser inscrits en les llistes de crèdit del Banc. De l’altre Banc privilegiat, l’Hipotecari, tothom sap que sa actuació en ordre al crèdit agrícola ha estat nul·la […] El poc que s’ha fet a Espanya en ordre al crèdit agrícola es deu a la iniciativa particular” (Campllonch, 1917: 32). 6 It has been argued that public financial assistance was also the main reason of the wine cooperatives expansión later on, during the period 1950-1965 (Medina, 2011).

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the harvest to the wine cooperative, to avoid a free rider behaviour of those winegrowers who sent directly to the market the best grapes and took only to the cooperative the ones that could not be sold elsewhere for higher prices. In this case the cooperatives would produce wine of a lower quality and, at the same time, underuse their facilities, which would increase the production costs for the rest of the members. That is why most of the wine cooperatives had specific rules to avoid this free rider behaviour. But a greater commitment with the cooperative meant a loss of entrepreneurial freedom, as winegrowers were not able to take their own economic decisions (Caballer, 1982). For some of them (especially small producers with limited means and, thus, a weak position in the commodity chain), the advantages of participating in the cooperative could offset this loss of freedom; but not for all of them. One of the problems was related to the wine quality. Small growers unable to purchase adequate equipment became more competitive with their participation in cooperatives; but for large growers with winemaking skills and cellar facilities the wine quality was not improved, but, on the contrary, it was driven down. The main reason was that the cooperative winery was taking grapes from different varieties and quality, and even if their members were required to take care of their vines, it was difficult to control the cultivation methods and reject low quality grapes. At the same time, wine cooperatives improved the traditional technology that were using small growers for winemaking; but the improvement of wine elaboration could not go beyond some limits. Firstly, modern machinery required a considerable investment, and had to take into account its repayment while paying a fair price for the grapes to the cooperative members. This is a reason why most of the cooperatives used some machinery less expensive, easier to operate and occupying less space, although it could not provide the highest quality. The lack of technical skills of the members who were running the cooperative also hindered the increase of quality, because, as we mentioned, they could not afford paying professional technicians on

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staff, especially when wine markets were depressed and prices were low.

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assistance, at least to monitor the wine elaboration process, was crucial; but not all wine cooperatives could have an enologist and pay for his services. Moreover, winemaking was only one of the services the cooperative was offering to their members. As mentioned, many cooperative wineries were created as a specialized section of an existing agricultural cooperative with other functions, as was the purchase of fertilizers and other agricultural inputs, threshing, oil production, credit and mutual services, that were also much needed by the small producers, who specialized in winegrowing but cultivated at the same time other crops. These services required also some investments and reduced resources devoted to winemaking, even if it was the main function of the cooperative. For example, the investments undertaken by the wine cooperative of Igualada in the oil mill, threshing machine and storehouse for fertilizers and other inputs, amounted 40 % of its total assets, and some investments in the winemaking process had to be postponed and even cancelled to develop other cooperative services that were considered a priority (Planas, 2013). To sum up, the wine quality was not the main goal and so, the cooperatives had also difficulties in selling wine directly to consumers, which was the way to increase its added value (Saumell, 2002). Very few wine cooperatives sold bottled wine, and aging wine and selling it with a brand name, as did the Cooperative of Alella, was an absolute exception7. Most cooperatives sold only to a very limited number of merchants and quite often used auctions to wholesale, as they needed to sell wine rapidly to leave space for another harvest and pay the members for their grapes. Some attempts of selling wine directly to consumers individually by the cooperative members were generally not successful (Saumell, 2002). Trade was in any case limited to the local

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Even the leaders of the Cooperative of Alella acknowledged this exceptionalism, when they admited that their productive and marketing specialization in high quality wine “resulta muy difícil de realizar en una bodega cooperative. En este empeño, sólo que sepamos, ha triunfado en España, Alella Vinícola; y en el estranjero, muy pocas son las bodegas cooperativas que utilizan este sistema de ventas” (Alella Vinicola, Cincuentenario de la Fundación de la Bodega Cooperativa Alella Vinícola, 1906-1956, Memoria leída en el acto de Homenaje a sus Fundadores, Alella, 1956, p. 28-29).

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market, as the members in charge of marketing activities had limited information about the market conditions. Moreover, unlike private wineries, wine cooperatives could not adapt supply to the demand fluctuations, as their service consisted precisely in the elaboration of all grapes handed by their members (Caballer, 1982). As members of the cooperative were in charge of most of the activities and management, trust was most important. It required a social homogeneity, as social interests were different (and in conflict) between small and large growers. In some cooperatives, the management was elected among the members democratically (“one member, one vote”) and in others according to the number of vines or amount of grapes handed to the cooperative. But in any case, there was a high participation of members in the cooperative activities, which made decisions more transparent and sensitive to the members’ interests (Hansmann, 1999; Borgen, 2004). This is why these institutions had difficulties to develop when there were conflicts within the community. And this was the case in the majority of vine areas in Catalonia, where farmers didn’t own the land they were cultivating. Most of the vines had been planted thanks to a contract (rabassa morta), widespread in Catalonia since the eighteenth century, which stated that the transfer of land to the cultivator (rabassaire) was extinguished with the death of most of planted vines. The phylloxera crisis meant the loss of land rights of farmers who cultivated it since time immemorial. Many of them left their farms and migrated to urban centers with greater opportunities to obtain gainful employment. Others, however, didn’t give up and continued growing vines. After the replantation, these rabassaires had still their class identity and fought to improve their social situation and to gain access to land. The conflict worsened because of the wine crisis in the early twentieth century: as wine prices fell, so did growers profits, and rabassaires tried to offset the income fall by reducing the rent they had to pay to the owners. In the 1930s it became a major social and political conflict in rural Catalonia (Giralt, 1965; Balcells, 1968; Carmona & Simpson, 1999; Pomés, 2000).

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Social and political division in winegrowing areas made cooperation more difficult. That is why we can find two cooperative wineries in the same municipality, even built nearly at the same time and with a similar storage capacity: one was built by the initiative of the small producers of the locality and another one by the well-off landowners (Mayayo, 1989; Gavaldà, 1989; Gavaldà & Santesmases, 1993; Santesmases, 1996). The existence of two agricultural cooperatives in the same municipality was quite common in rural Catalonia, but two winemaking cooperatives is most striking, because they needed a much higher investment to build their cellars, and with fewer members they were more difficult to finance and permitted less economies of scale in winemaking and marketing. However, we have found ten municipalities (Aiguamúrcia, Barberà, Blancafort, Cabra del Camp, Marçà, Nulles, Sarral, Solivella, Valls, Vila-rodona) where two winemaking cooperatives were operating at the same time in the period analyzed. Social and political conflict within the community could lead in the short term to a larger number of cooperatives, as in some localities were founded two instead of one, although it is possible that in some other localities this social division made the attemps to create wine cooperatives not successful. In the long run, however, two wine cooperatives competing in the same locality was likely to lead these organizations to an economic failure or, at least, to very little development, as happened in many agricultural cooperatives in early twentieth century (Planas & Valls, 2011). Some of them merged to be able to increase development; but because of social and political divisions, many of them went on with very few members and scarce development, until the Spanish Civil War broke out, when one only agricultural cooperative in the same municipality became compulsory.

5. Conclusions The most successful rural cooperatives (e.g. Danish dairy cooperatives) were very specialized and connected to international markets (Henriksen, 1999; Henriksen,

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Hviid y Sharp, 2012). By contrast, early wine cooperatives sold only to the local market and offered diversified services. As mentioned, the development of other services reduced resources for the main function of wine cooperatives, which was the elaboration and marketing of wine; but the polyvalence of these organizations suited the needs of small winegrowers, who cultivated also other crops and needed at the same time credit and mutual services. As cooperatives could not absorb the marketing functions of merchants and reduce intermediaries, they could not raise much the price of the wine, which was their main revenue. To achieve this goal it was necessary to produce wine of higher quality to be marketed under brand names; but, as we have seen, cooperatives failed in competing on quality, which was the main solution to chronicle overproduction of table wines (Simpson, 2011). One of the major problems for wine cooperatives was how to finance investments and technical supervision. For small winegrowers (who were the majority of the cooperative members), building a cellar was unfeasible without access to external resources, and getting credit was difficult due to their limited means, and especially when wine prices were low. Without any technical and financial assistance by the state it was very difficult to succeed. But in Spain the government didn’t set up a credit system for cooperatives and the central bank was very restrictive with these borrowing operations. Therefore, in Spain very few wine cooperatives were founded in early twentieth century, and the initiatives that succeeded had to limit debt and had very few resources for investments. Later on, in the second half of the twentieth century, the Spanish government was more proactive towards wine cooperatives and this is the main reason for their much more rapid diffusion (Medina, 2011). In Catalonia, the autonomous administration was much more sensitive to agricultural cooperatives, and more wine cooperatives were founded thanks to its technical and financial help. But the lack of economic resources limited its action. In 1934, an internal report of the Viticulture and Enology Service of the autonomous government stated that “wine cooperatives in Catalonia are staggering for many

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different causes. Because the scarcity of financial resources (the majority of cooperatives being in debt) and the very low price paid for the wine, many of them can’t afford the supervision of a specialized technician. This is the cause of several resounding failures that, in addition to the damage caused to those cooperatives in particular, have caused an incalculable harm to cooperation, as it has prevented its steady and continuous development”8.

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