The uneasy terrain of post-communism …………………………………………………… 7
Cultural encounters ………………………………………………………………… 9
Small agricultural producers ……………………………………………………11
New rural entrepreneurs ………………………………………………………… 15
Outcomesof cultural encounters …………………………………………………… 22
Conclusions …………………………………………………………………………… 25
References ………………………………………………………………………………… 27
Comparative analysis is based on four case studies made in a framework of Dioscuri Research Project. One case study have in focus small milk producers in Bulgaria and, three case studies are focused at small and medium grape and wine producers from one chosen wine district in Bulgaria, Croatia and Hungary. Fieldwork research is done in 2005. Cultural transfers can help to narrow a gap between advanced agricultural sector of the West and less developed sector of the former socialistic countries. Wine sector was less attractive for foreign investors and wine producers where left alone to ‘self-Westernize’ themselves. Analysis suggests importance of social and cultural capital of new rural entrepreneurs, which enabled them for successful cultural transfers and creative application of the Western experience in post-socialistic context.
The most important outcome of cultural encounters in the agricultural sector is a realization of the importance of prioritizing quality over quantity. In Bulgaria that process is marked with conflicts, but in Croatia and Hungary in a branch of wine production it gives very good results. Bad reputation of the wine from former socialistic countries increasingly becomes a matter of the past, especially in the case of Hungary and Croatia. In these two countries with excellent potential for wine production but relatively small total production output orientation to the production of high quality wines should be encouraged.
Making, selling and consuming of wine is unavoidably interwoven with cultural encounters throughout history1 up to recent time. Story of wine production in three micro-regions - located in southern Hungary (the vine district Villányi, Southern Transdanubia), in southern Bulgaria (village Brestovitsa, South of Plovdiv) and in northeastern Croatia (the vine district Kutjevo, Požega-Slavonia County) - and in one sub-region, northwestern Croatia (the vine district Istria) offers abundant evidence. In area of Central and Eastern Europe and on the shores of the Mediterranean and Black Sea viticulture had a distinct palace in agriculture of Illyrians, ancient Greeks and Romans, Slavs and Magyars.
‘The Ring of Fire’ Balkan region proved to be hard place for making a living of grapevine growing and winemaking, yet with a long history and the great endurance. Bulgaria and Croatia reside, respectively, on the shores of the Black and Mediterranean Sea, native land of Vitis vinifera - the grapevine which is a base of a wine production around the globe. After the Roman conquest of the Balkan Peninsula they discovered a well developed winegrowing industry, especially in Dalmatia (coastal Croatia with islands). However, after two century of prosperity, viticulture suffered great losses due to new law regulation. Protecting an interest of domestic wine industry which was confronted with the very strong competition, Emperor Domitianus (81-96) restricted viticulture in the conquered provinces and especially the production of quality wine. For declining wine industry it was long time to wait till Emperor Probus (276-282 AD) again encouraged the spread of viticulture, especially in Pannonia and Dalmatia.2 Croatian wine makers from Požega Valley on the wine labels proudly use Roman name – Vallis Aurea (The Golden Valley). Near the Villányi excavations of a Roman villa, and some written material proved that there was a highly developed viticulture in those times.
Importance of this specific branch of agricultural production in Greek and Roman civilizations is reflected in the fact that it had its own god-protector and, it seems for a good reason. Once, dynamic trade on the long distance was ruined with the downfall of Western Roman Empire. Centuries later, Catholic Church orders were important agent of the dissemination of viticulture and the art of wine making. The order of the Cister monks established in Kutjevo the abbey Vallis honesta de Gotho and built wine-cellar in 1232, as a part of Abby’s real estates.3
The revival of wine commerce in this part of Europe was stopped by invasion of Ottoman Turks. In Kutjevo the Abby was destroyed but curiously not the wine-cellar, and it remained in use during the whole period of the occupation (1537-1691). Distance in straight line between Kutjevo (Croatia) and Villány (Hungary) is less then 70 kilometers. No wonder then that situation in Villány was similar – settlement was destroyed, but people in nearby villages continued practice of grape growing and wine making. War horrors were coupled with migrations and depopulation of occupied territory in Croatian region Slavonia, as well as in Hungary. This led to several waves of foreign immigrants during next three centuries, and produced unintended consequences for viticulture.
First, for our story it is important that among other regions, Turks resettled Villány micro-region with Serb population, who brought the variety Kadarka as well as the technology of making red wine. Since then red-wine gradually gain popularity and eventually became trademark of Villány. Second, after the Ottomans were defeated, Leopold's general, Prince Eugene of Savoy and count Ádám (II) Batthyány were rewarded with large domains in County Baranya. In next two centuries that domains served as an example of the professional and modern agricultural methods practice. Third, from the end of the 17th century throughout the first half of the 18th century, there was constant low intensity immigration of predominantly German-speaking settlers – the Swabs. They brought with them the "Portugieser" (Kékoportó or Blue Oporto) and the Kékfrankos grapes along with their advanced agricultural knowledge and work discipline. That set the frame of the cultural crossfertilisation, which gave new impetus to the wine business in Villány. In the heydays of wine production in the second half of the 18th century to the late 19th century wine from Villány was exported throughout Europe and to the USA and Brazil. Significant income also came from pubs and inns. That idyll was disrupted by the Phylloxera disaster. It seems, after rain for Villány always comes a sun - Zsigmond Teleki selected several sorts resistant against Phylloxera and perfected wine-growing in this region.4 That was also perfect opportunity for introduction of the French varieties Cabernet franc, Cabernet sauvignon and Merlot.
In similar way, the first restoration of winegrowing in (continental) Croatia began in the last decade of the 17th century, when new settlers arrived to Slavonia. They introduced new varieties such as Traminer, Rhine Riesling, Zeleni Silvanac etc. Wine production revival spread throughout Croatia and was accompanied by a general increase in wine consumption.5 When Phylloxera ruined wine production in France, for twenty years Croatian wines were exported to France. But, Phylloxera eventually came and devastated the vines throughout Croatia. Many vineyards were grubbed up and never again brought back into cultivation – the areas under the vineyards were reduced to one third of the original! Considering that it was lucky circumstance that in the late 19th century family Turković became owner of Kutjevo manor. They successfully manage it for three generations, till expropriation after the World War II. Later on that period was always cited as the most prosperous period of Kutjevo wine-cellar and of this whole region. Family Turković invested a lot of resources into the grape cultivation and wine making, as well as in other agricultural production. Kutjevo manor served as an example of modern agricultural methods and practice, similarly like domains owned by families Savoy and Batthyány in Baranya (Hungary). Scientific work and practice of Baron Zdenko Turković was seminal for the development of modern viticulture and wine making in northern Croatia.
In Bulgaria viticulture and wine business for centuries were in a position of the Sleeping Beauty. The Ottomans ruled till the late 19th century and one of the oldest states on the European continent, paradoxically with an excellent grape growing potential, has one century long continuity in the viticulture and the wine production.6 In Brestovitsa wine production started in 1920’s.
After World War II when communist regime announced Land Reform in Bulgaria it has little practical consequences for Bulgarian peasants – after gaining independence process of land distribution and redistribution already created pretty-much egalitarian situation where small-scale family farms dominated. Never the less, four wine cellars in Brestovitsa suffered a fate of “socialistic transformation of ownership”. It had more dramatic effect on prosperous wine business in Villány, coupled with expulsion of whole families of German origins (Swabs).
Each country included in our comparative framework had distinct agricultural trajectory during the socialism. Generally, socialism had a far-reaching and lasting impact7 on agriculture production, as well as on parallel disengagement from agricultural identities (Creed, 1998). During a period over 40 years there were many shifts and turns in national agricultural policy. Note: In Croatia (ex-Yugoslavia) it was never fully implemented “collectivization of agriculture”, and over 50% of agricultural land stayed in hands of private owners.
In Hungary during the 1970s emerged “a relatively stable, permanent new pattern of cultural and economic behavior. … Though the size of family mini-farms was strictly limited, some producers learnt how to increase output per acre and to progress beyond subsistence production. … Workers who maintain their rural residence can complement their incomes from the increasingly market oriented, efficient and intensive family mini-farms” (Manchin & Szelenyi, 1985: 249-250). This rediscovery of entrepreneurship, particularly family entrepreneurship is of great importance for our comparative analysis.
Migrations from villages to towns resulted with reduction of agricultural workforce and many vineyards, especially those in hills and slope terrains, were deserted. In similar vein, on state farms vineyards not suitable for machine cultivation were usually abandoned.8 Although, many big socialistic wineries had than modern technology they were oriented primarily on quantity.
It is the greatest sin of socialism against viticulture and wine making with long lasting consequences!
It is important to have it and who (only bourgeoisie) cares about quality – (small peasant) logic prevailed in a circumstances were the greatest part of export went on undemanding COMECON market.
We did not explore historical background of milk production from nomads till modern dairy farming. That branch of agricultural production is also susceptible to wars, armed conflicts and plunder, (animal) diseases, changes in trade regulations and lows, agricultural policy measures, and changing preferences of consumers – but it lacks exiting connection with the locality, tradition and rich cultural imaginary which encircles vine grapes and wine.
Comparative analysis9 is based on four case studies made in a framework of Dioscuri Research Project. Cases follow common methodological guidelines in order to examine three dimensions of cultural encounters – structure, the sequence and outcome. Choice of cases is made with awareness that small and middle-size agricultural producers (farmers and wine producers) act in an economic space that is saliently different from the rest of the DIOSCURI Project cases. One case have in focus small milk producers in Bulgaria and, three case studies are focused at small and medium grape and wine producers.
Bulgaria: The small milk producers’ case. – Ilia Iliev
Bulgaria: Wine production between the local and the global: The case of Brestovitza. – Ivaylo Ditchev
Croatia: Wine Producers in Kutjevo - Požega Valley – Between Local Culture and European Market. – Drago Čengić
Hungary:A Small Miracle in the Lack of Foreign Investors.The Villány Wine and Westernized Local Knowledge.– Éva Kovács
The fieldwork consisted of interviews with the different actors, e.g. farmers, distinguished wine-makers, other big entrepreneurs and policy makers. Generally, they address issues of interpersonal levels of cultural encounters and sometimes institutionally mediated encounters.
The number of interviews per case study
Number of interviews
conducted / recorded and with English summary
Domestic (82/36 )
* We made one additional interview with an expert from the Croatian Institute of Viticulture and Enology.
It is obvious from the Table 1 that there is large discrepancy between numbers of conducted interviews and recorded interviews, complemented with summary written on English language. That was, to certain degree, an obstacle in gaining deeper insights in country case studies. Second, in neither of four case studies we did not hear stories of cultural encounters tolled by foreign actors.
The uneasy terrain of post-communism
In countries included in our comparative framework different models of land restitution were applied. Depending on pre-socialistic land ownership situation and applied model, there is a different ownership structure. Bulgaria is an extreme case of land fragmentation, where small-scale family farms dominate. Introduction of market-oriented reforms in agricultural sector in all ‘transitional’ countries brought various difficulties.
After 1989, Southern Transdanubia became one of the most underdeveloped rural regions of Hungary (e.g. unemployment in 1991 amounted to 32%). The shutdown of the coal- and uranium-mines in the regional center, Pécs (a town of 200,000 inhabitants), and the bankruptcy of the cooperative and state farms resulted in ten thousands of unemployed.10 Its marginal position in the country, and the lack of a good road system made it more difficult to connect Southern Transdanubia with the capital and the potential foreign investors. In addition, the war in Yugoslavia also had a detrimental effect on the development of the region (its distance from the Croat-Hungarian border is 2-10 km). In 1991, the Western investors suddenly left this insecure place behind.
After steep economic downturn agricultural recovery of postwar Croatia has been slow. Advantage of better start position in “transition race” was lost mainly due to the war and an inadequate privatization model. Market liberalization produced changes throughout Croatia’s winemaking industry. In socialism vine-growers were orientated on selling grapes to large state-owned wineries. Many of these wineries were a part of big enterprises (so called agricultural-industrial combinat) and most of combinats went in crisis. That put pressure on shoulders of vine-growers, if they had sufficient economic power, to consider alternative economic pathways.
“Bulgaria is one of the most important wine producers and exporters of the former communist countries. … Transitional changes in Bulgaria had a tremendous impact on the wine industry and market: Ten years later, Bulgarian wine production declined by 43 percent, producing some 130 million liters in 2000. Wine grape vineyards were reduced by 25 percent, and export in value was 60 percent of prereform levels ($126.6 million in 1999). Consumption of wine per capita also declined significantly; in 1999, it was only 39.6 percent of the prereform level (Noev, 2006: 5-6).
Regarding the accession to the European Union, Hungary had fasted pace, followed by Bulgaria and Croatia is still candidate country. In our analysis we will follow how this affect lives of actors who participated in case studies.
4. Cultural encounters
“The early bird gets the worm.” During a socialistic period cultural encounters with the West were a sort of privilege. Although Croatia, then in socialistic Yugoslavia, had more opened borders, restrictive legal and economic framework prevented rise of the private wine sector. Unlike Hungary, the wine sector in Bulgaria and Croatia had to wait demise of socialism to start a process of transformation.
In 1970’s and 80’s in Hungary spread of the entrepreneurial family mini-farms, market oriented, took such proportions that Manchin and Szelenyi (1985) proposed a new theory of re-entry to embourgeoisement and predicted emergence of new hybrid type of society. A process was selective – some villages were ‘infected’, other not; some families acted as entrepreneurs, other not. Éva Kovács in her case study noticed that such process took place in Villány.
Proto-entrepreneurship. Villány started flourishing in the early 1980s, when many of its inhabitants took a second job as a small entrepreneur, partly informal or semi-formal, not only in wine production but also in the third sector (they were not typical “social entrepreneurs“11 at all). These second jobs brought about a new, proto-capitalist culture in the everyday life.
Preliminary accumulation of capital12. Between the early 1970s and the late 1980s, the new winegrowers purchased small plots and sold their wine in the local market illegally. As proto-entrepreneurs they were open for absorbing new technologies, and developed creative business attitudes.13 They smuggled in the country relatively old Western industrial equipment, mostly from West-Germany. The extra incomes from their second jobs had reached such a level until the end of the 1980s that they were able to start their first “real” enterprise (an inn, a wine-cellar, second plot, etc.) after 1989 without any local or foreign financial assistance.
During a theoretical debate about that phenomenon, the social origin of family emerged as important explanatory variable. The Hungarian case is also illustrative for importance of the social capital, based on ethnic/cultural identity shared by the social group which is involved in the network of relations.14 Bourdieu (1986) argued that benefits flow to individuals from membership in certain groups or from participation in networks. “… information and trust can also improve the circulation of cognitive resources of a high economic value, that is, of uncodified knowledge which would be tied to the production activities of goods and services and therefore to the possibility of collaborating in processes of risky innovation” (Trigilia, 2001: 429). Biographical narratives of the “Great Five” reveal that especially in an initial phase of their business venture, in socialistic-restrictive frame of economic action, such form of social capital was valuable resource. They fostered “trust, openness, and a willingness to share information, ideas, and opportunities in this field” (Woolcock and Narayan, 2000: 243). Social connections with relatives in (then) West Germany, as well as friendship relations between (then) entrepreneurs-beginners proved to be valuable resource.
Knowledge and network resources15. Some of the new winegrowers were highly qualified agronomists who learned their profession under communism. For historical reasons – being ethnic Germans who were discriminated in the 1940s and 1950s – they could not reach any communist career: for them learning was the only chance for any advancement. The German inhabitants of Villány have cherished very good contacts with West-German citizens (former expellees from the region).16 In the last two decades of the communist period, the shadow economy flourished on the basis of „imported” goods and knowledge from Germany. A special advantage of the inhabitants, including the non-“svábs” was bilingualism (or trilingualism – the third language was Croatian), not to speak of their informal, semi-legal contacts with Western tourists who bought wine in the private cellars. In the early 1990s, the new winegrowers organized study trips to the wine districts of Rhein (Germany), Alsace (France) and Southern Steiermark (Austria); imported Western knowledge and institutions by founding the VSWA, modernized the cellars with the help of PHARE funds and domestic subsidies, and developed regular contacts with similar NGO’s in Europe.
Later, in post-socialistic circumstances, we can also trace importance of cultural capital and such form of social capital also in success stories of some leading Croatian and Bulgarian winemakers. In post-socialistic conditions (combined with war and postwar circumstances, in case of Croatia), rule of law and Weberian bureaucratic structures were, more or less, distant ideal-types. Goodman’s (2005) argued that social capital may be more important concept for developing countries because often people in these countries have less opportunity to access formalized structures of support. Same was (is) true for post-socialist countries.
Note: Scarcity of land suitable for vineyards to certain degree perform its controlling function on numbers of entrepreneurs, and those who started early had an opportunity to by best positions for vineyards.
4.1. Small agricultural producers
Expectations. The first encounters with the EU for the small Bulgarian farmers were dominated by two trends – introduction of new and stricter regulations, regarding the farming and marketing of agricultural production, and a gradual decline in their role in the agriculture in favor of the rural entrepreneurs. The first set of stricter regulation was introduced in relation to the mad cow disease, and for the first time since the early socialist period, each cow was taken into account by the local offices of the Ministry of Agriculture, and received a passport and a yellow ‘European’ identification badge. ‘The cows joined the EU before the people’, was a common comment amongst the local farmers at that time. Then stricter regulations and accounting for the poultry came a few years later, following the bird flu. In the same time, several Bulgarian farmers were involved as seasonal workers in Greece, Spain, and Italy, in a rather unregulated job market. They came back with stories of terrible exploitation from the rural entrepreneurs, and with some cash.
On the other side, a constant problem for the small Bulgarian farmers since 1989, was marketing their production, and they often nostalgically remember the 1970s and 1980s as a period when the state guaranteed that all their production would be bought out in due time and at a price fixed well before the beginning of the agricultural season.
Meanwhile, their encounters with the EU agriculture were dominated by a new set of regulations and subsidies, which combine in an increasing pressure to them to specialize in only one type of production, instead of the diversified household economy they use to have. A major set of regulations is focused on the hygiene of the food production, storage, transportation, and marketing of the foodstuffs. As far as the small milk producers were concerned, this immediately translated into new requirements from the milk processing enterprises, and the local offices of the Ministry of Agriculture. In their turn, in order to pass the evaluation procedures, and to be allowed to export to the EU market, the dairies should work with milk of specific quality, with strictly limited amount of somatic cells, bacteria, and inhibitors (usually antibiotics). As a rule, the milk produced by the small farmers does not fit into these regulations, largely due to their lack of proper storage and refrigerating facilities, requiring massive investments. The communal or cooperative storage facilities, recently supported by the Ministry of Agriculture and SAPARD program, do not seem a good solution, because the farmers usually milk their cows two times per day. While the morning milk could be delivered immediately to the communal storage facilities, the evening milk usually stays overnight at farmers’ home, providing a fertile ground for the expansion of bacteria. The increasing demands from the customers were combined with new recommendations, issued by the Ministry of Agriculture, regarding the construction and the aeration of the stables. Some of these recommendations go against age-old practices and met some resistance (e.g. one of the interviewed farmers quoted an example of Jesus Christ being born in stables covered with thatch – as an argument against the recommendation to stop using thatch for covering the stables’ floors). Besides the permanent hygienic and sanitary norms, slowly introduced by the local offices of the Ministry of Agriculture, the mad cow disease and the bird flu provoked ad hoc campaigns, increasing the control over the small farmers.
In some cases, the regulations formally make the farmers choose between different types of production, favoring one and discarding the other. For example, in order to prevent cross-species diseases, they are strongly recommended not to keep cattle and poultry in the same yard, as the normal practice for a small farm would be in Bulgaria.
Besides the prohibitions, there are also positive stimuli for specializing in one type of production. The food processing companies are ready to pay a premium price for a production of relatively regular volume and quality. For example, the dairy companies pay up to 0.60 BGN per litter for milk from modern farms, while the traditional farmers could expect 0.35 BGN at best (the prices lower in the summer). The farmers, producing fruits and vegetables, are subjected to similar pressures. “We can not prepare even a standard container of tomatoes for Russia”, complained the manager of a farmers’ market. “We have several tons of production, but each farmer is growing different sorts of tomatoes, planted in different time, with different size and getting ripe in different days. They seem excellent, but they are good only for the canning factories”.
Thus the small farmers are encouraged to increase their investments if they want to stay on the market. The farmers, who want to keep selling their milk, should invest in storage facilities and refrigerators, milking machines and buildings. The farmers producing foods or vegetables face similar choices. Since they cannot afford massive investments in a variety of productions, this means that they should favor one thing discard the rest.
Moreover, the support from the government or the EU also helps increasing the pressure on the farmers to specialize in one type of production, given the high costs of bureaucratic procedures. Referring again to the milk producers, they should present at the local offices of the Ministry of Agriculture, usually situated in a central town, a total of 14 documents from various sources in order to receive state subsidies for milk. The time and the efforts to prepare the papers, combined with the travel expenses, make the very act of receiving state subsidies a costly exercise, and seem counterproductive for the small farmers. An interviewed farmer argued that the minimal number of cows, necessary to make the effort for preparing the documents worthwhile, is 20 (according to an employee at the Pazardzik office of the Ministry of Agriculture it is less - 10 cows). Actually, the small farmers, even those with 2 or 3 cows, do claim their subsidies, but the costs of administrative procedures remain a constant source of complains and worries.
Combined, the stricter regulations, the demands of the food processing industries, and the costs of the administrative procedures tend to encourage the farmers to focus their efforts on one and only one type of production. However, it seems that the most efficient strategies in 1980s and 1990s were the opposite. The most successful small farmers have been trying to diversify their production. An example from Bulgarian case study is illustrative for this strategy.
Besides being car mechanic and shop owner, Maxim invests a significant portion of his time in agriculture. …Five days a week Maxim works as a car mechanic in Sofia, while (his wife) Boika is teaching informatics and basic computer skills at a secondary school. Both jobs provide them with a stable income and have serious additional advantages. The teacher’s salary is quite modest, but their bank considers it a very good guarantee for a credit. … Moreover, her position as a teacher allows her to get a direct access to customers for selling milk and vegetables from Valchedrum … They have achieved a delicate balance between varieties of complementary activities, each one making them more competitive and efficient in another field. …
This year he cultivated some 270 da (27 ha) of land, … approximately 100 da belong to his family, the rest are rented. The actual work on the land is done by a group of rural entrepreneurs from Blagoevgard, South-Western Bulgaria, who came recently to Valchedrum region … The farmer rents or owns the land, he pays to the entrepreneurs for cultivation, including sowing and harvesting, then stores the production in his facilities and sells it or uses the fodder. He takes also all the risks, choosing what to be cultivated, making his own estimations of the market, and protecting the fields from thieves.
The main preoccupation of Maxim for the last year was whether to register as an official agricultural producer. …He understands that in the long run, his non-subsidized production will become non-competitive. On the other hand, the registered producers should pay taxes, pension and health deductions from a minimal revenue corresponding to at least two minimal salaries … The opposite strategy, when the farmer invested all his resources in one type of production, is usually penalized (often due to overproduction) by the market. This high risk strategy concentrates farmer’s all efforts in one direction, trying to invest in the most profitable cultures. In case of repeatedly fault evaluation of the market situation such “entrepreneur” can impoverish. Relatively low risk strategy is diversification of portfolio, with orientation on low, but secure profit. And very low risk strategy includes mix of paid work supplemented by limited farming efforts.
Having to choose between two opposite trends – an increasing pressure to specialize in one type of production, and the diversification which proved successful for the last decades, the farmers hesitate between different options. Some of them even further diversify their production and gradually shift towards the gray market; some withdraw from agriculture or become employees of the newly emerging rural entrepreneurs. Still, there are a number of them who opt for creative family strategies, combining specialization and diversification.
It seems that the EU regulations might support different, even opposite trends, depending on the specific field. The restrictions imposed by the EU to the new vine plantations mean that the local farmers in Hungary and especially in Bulgaria become one of the most important providers for the modern wineries.
The Bulgarian case
One of the unexpected allies of small land ownership turns out to be the EU. According to the chapter on agriculture no new vineyards should be planted, the only possible investment being uprooting and replanting of existing vines. On the other hand, quotas for wine are much larger than the country can fulfill and there has been a lot of investment into wine-producing. As a result, there is a chronic shortage of grapes, which helps subsistence farmers survive against all economic logic. According to the mayor of Brestovitsa, there are up to 1000 owners for a population of 3 600, i.e. almost every larger family has a piece of land and there are also many owners living outside the village. The people I talked to possessed on the average some 2-3 pieces of vineyards, 2-3 decares each. All members of a family work on them at specific times of the year, and the income of around 1000 leva (500 euros) per decare is used for all big (“urban”) family spending like electricity, house repairs, utensils, etc. Thus this income is essential and only very old people who no longer can work are inclined to sell to the great dismay of the growing wine-industry. The Hungarian case
The farmers of family gardens constitute the majority of winegrowers. According to the interview made with the judge of the Villány-Siklós wine-growing community organization, they count 558 from the 671 members. Under communism, most of them were employed by the co-operative farm and witnessed its collapse. They survived as losers and small surprise that they are still frustrated. Wine production is a traditional family activity for them. They do it as a hobby and use it as an additional source of income. The legal status of these small farmers was regulated in 1995. Since then, they have had to apply for a producer’s certificate, and been allowed to sell only their own wines, and only in balloons or barrels. (In Villány they usually sell the wine to the traders in barrel.) Today, the small farmers live under the pressure of a great many legal requirements and the buy-out operations of the bigger entrepreneurs. They are rather old and if their children didn’t continue production, they would have to give it up. For the time being, they still find a place for themselves in wine tourism. “The Great Five” are forced to buy grapes from such small winegrowers. Croatia is still a candidate country and that means that Croatian wine producers still have open hands to plant new vineyards, moreover they are encouraged and subsidized by the state. Because of various structural reasons, as well as being cautious about possibility for marketing additional quantities of the wine they act less vigorously as it would be expected and stayed oriented on cooperation with small-scale grape producers.
4. 2.New rural entrepreneurs An important trend since 1989 was the emerging of rural entrepreneurs, competing with and slowly replacing the traditional farmers. For traditional farmers and wine-producers in Brestovitza, Bulgaria the EU is seen more as the necessary evil, as a set of limitations, rather than as an opportunity. For example,
“any investment in new vineyards depends on good relations with the government who distribute the limited national stock of recently uprooted vineyards-to-plant.”
Cultural encounters with European counterparts have discouraged them – just as Croatian small wine producers. They lack connections, the know-how in marketing, advertisement, and they are resentful against “trickery with EU legislation”. Next two examples from Bulgaria, where newcomers with no previous experience in agricultural production managed to get support from SAPARD program, explain such attitude.
As a rule, the newcomers are better informed about the EU markets and the specific requirements, regulating the food production. For them, the membership to the EU means new market opportunities, but above all a new set of rules and regulations.
Some of them have no previous experience in agriculture. E.g. the wine cellar “Todoroff” was established by a family couple, who used to be musicians and stated to make wine for fun, just for their friends. They significantly contributed to development of wine tourism in Bulgaria. In case of business success of Todorov family, cultural and social capital played significant role. Experience from travels in countries of Western Europe and friendship relations with foreigners resulted with ideas for developing business. Their market strategy is clear:
Why bother to export and struggle on the global market if there are so many potential
consumers coming to Bulgaria on their own? It seems that the EU regulations might support different, even opposite trends, depending on the specific field. A comparison between milk and wine producers might clarify this point. In the field of milk production, the EU regulations clearly favor the large-scale entrepreneurs. A successful milk producer should have modern storage facilities and refrigerators, milking facilities and spacious building, constructed with materials which lack dangerous elements, like asbestos, they should have enough resources for cultivating 1 ha of land per cow and modern waste processing facilities, in order to fit to the requirements of the dairy companies, exporting their products to the EU.
The modern farm in Tzalapitza near Plovdiv is such an enterprise. It was established in 1996 and its owners did not have previous experience in cattle breeding. The farm has a modern milking system, tanks and refrigerators, bought with the support of Sapard program, and its own laboratory for controlling the quality of the milk. The owners of the farm cultivate some 800 ha, and produce their own fodder. The modern milk farm is situated both spatially and socially outside the local community. The requirement for large-scale milk producers to cultivate an average of 1 ha per cow, in order to receive state subsidies, means that they do not depend on the local farmers for fodder. The staff of these modern enterprises is highly professional, and most of the people working in Tzalapitza farm commute from the town of Plovdiv, and do not belong to the local village community. The local villagers are not allowed inside the farm, given its high hygienic standards, and could observe only the heavy trucks delivering fodder to the farm, and leaving loaded with milk, meat, and waste. The situation with the wine producers is quite different.
First, the wine producers should take into account the expectations of the customers, who associate the wine consumption with specific images and settings. The dairy companies also try to attract the middle-class customers with nice images of tourist destinations, with happy cows strolling leisurely in the background, but the end customers are hardly expected to visit the real ‘proletarian’ cows in the milk-producing factories. On the contrary, the wine producers often rely on domestic and European tourists as potential customers. In Villány tourism based on wine roads is quit well developed – it begun partly as a response to needs of tourists, and partly as a matter of creative transfer of experience from the leading wine countries in Europe. In Croatia, in Istra project of wine roads is developed but with a lot space for improvement, while in Požega- county it is far from it’s full potential. Bulgarian case study offers an example of successful wine tourism with weak connection with local community (Brestovitsa).
The marketing of ‘Todoroff’ implies the development of a rich wine-imagery within a solid cultural context. Thus the couple employs professional culturologists to design Thracian references … etc. They have built … a whole hotel complex around the cellar, where wine-tasting for groups organized by tour-operators are presented folk shows, ethnographic rituals and take commented meals.
Thus the rural entrepreneurs, investing in wine production, should maintain intensive communications with the local farmers and the local communities, which provide both grape for the modern enterprise and colorful settings, attracting the end customers.
The conflict seems to have a dramatic economic dimension. Small subsistence farmers cannot maintain the quality of grapes. It is difficult to negotiate with each one of them, to counter the various rumors that circulate around the place, to persuade them, say, to plant a particular type of vines that will be needed by cellar or not to water their vineyards which results in more quantity but less quality. The characteristics of plantations during communism were rather bad as most of the production went to the unpretentious Soviet market. There hardly was a truly homogenous field: when seedlings were out, they put into the machine another sort, and sometimes the peasants even intentionally planted different types of grapes in order to have some white, and some red, and some to eat. Nowadays competitive capitalist production needs specialization and monocultures that goes against decades of communist practice, but also is confronted to the restitution of land in real limits that was one of the main ideological enterprises of “transition”.
How is this conflict resolved? Every single transaction is hell, as there are several heirs for each piece of land and there is always one who says “Daddy told me never to sell land”. What happens is that the wine-producers start planting their own vineyards on new grounds.
Under these conditions it is difficult to maintain some brand of wine and the new tendency to make terroir wines is quite problematic. In fact, the biggest Bulgarian wine-cellar Domain Boyar started the “Solitaire” series changing each year the location, as the relations with local producers were never stable; the technologist of Todoroff said they also were thinking in this direction. This seems to be an interesting cultural hybrid combining post-communist instability and mistrust with the prestigious French idea of territory.
In these circumstances, the best for rural entrepreneurs is to plant their own vineyards, to start new plantations when allowed, to buy out the quotas of the small farmers, when possible, and to hope that the urbanite heirs of the old farmers will not stick to the family traditions. It seems that despite the EU regulations, the strategies of the rural entrepreneurs in milk and wine industries are quite similar and lead to a further separation between the food industry and the rural communities.
In Croatia situation is similar regarding the dependence on grape supply from viticulturists. But, in order to reduce market uncertainty and enlarge their wine production successful entrepreneurs, wine cellar owners cooperate with the small vineyard owners. Over the years they managed to establish various levels of control over vineyard production of their suppliers, with the aim to ensure needed level of quality of the grapes. Case of the most excessive level of control includes detailed instructions for every part of viticulture production cycle, supervision, as well as supplying with necessary vineyard production material. Final step is sending company employees to do the harvest and, of course sending a bill to the owner of the vineyard for the job done. That might be acceptable contract terms with a fair price for grapes and secured market for complete production in advanced years. In that way small farmers avoid many pitfalls due to lack of professional knowledge in viticulture and they are shielded against unpredictable market forces. These are exactly the problems, which Bulgarian small producers are facing:
“A peasant nowadays needs to be ‘at the same time a viticulturist, an agronomist, a tradesman, an accountant and even a watch-man’…”
Never the less, in Croatian case study only one example of such complete control over vine growing is documented. That is probably not a lonely case but established level of control depended on the authority of the wine producer. Only leading Croatian producers had enough economic and symbolic resources to establish such level of control. Second, that was a process, often in first stages characterized with a strong resistance and conflict.17 With regional, national and international recognition rising stars of Croatian wine business gradually gained stronger positions in relations with their’s grape suppliers. Accumulated rewards won on various wine fairs gave credibility to their suggestions for changes in viticulture practice and resulting higher quality of grapes. In south part of Dalmatia it was necessary to have an authority of world famous wine-maker form Napa Valley, Mike (Miljenko) Grgich, to change bad practice from socialistic times when only quantity of the grapes matter. When he sent away form the gates of his winery farmers with bad quality grapes, the other wine cellar owners in the region dared to follow his example. Achieved changes were very large in scope, reflecting generally poor widespread of modern agricultural knowledge among population of small vineyard owners. It seems that regional differences were important factor in that process of learning and cultural change. Of course, in creating a pressure for quality important role had/have the wineries remaining from socialistic times.18 Change in demands for quality wine grapes depended on phase of the process of privatization and on business orientation/strategy of the new owners and the new management.
In analyzed case studies we identified three different ways how successful entrepreneurs were dealing with a simple fact that making a good wine starts in the vineyard and ends in the wine cellar. Of course best deal is to have own vineyards. After the accession that option is rarely available to successful entrepreneurs who would like to expand their business.
In Bulgaria features of the economic culture19 and the great land fragmentation set hard constraints on effective establishment of quality control. With the ban on planting the new vineyards, the EU turns out to be unexpected allies of small land ownership.
In Croatia well established wine entrepreneurs managed to establish fair amount of control over cooperative grape production with small land owners.
The wine assortment of Attila Gere (Villány, on of the Great Five)is an example of business practice of well-established wine cellars/houses. Commercial wines are the starting items of portfolio of Gere Winery. Besides own grapes as row material they use integrated grapes purchased from private producers. In that way they shield their reputation against possible imperfection of row material, which they do not produce. That strategy is by no means novelty, but it is not widespread in less developed wine countries, as it should be.
5. Outcomes of cultural encounters
Generally, in all ex-socialistic countries development of agribusiness and farming lags behind the level of the “West”. Some countries (e.g. Hungary), certain regions (Villány or Istria) and certain sectors faster are closing a gap than the others. According to the general hypothesis of Disocuri project we did not rely on a simplistic scheme in which the “strong Western” culture prevail over “weak Eastern” one. Yet, it is an impossible to overlook the fact that in European wine sector some old member states are biggest wine producers and exporters in the world. Countries with the “weak Eastern” cultures of wine production have great examples to look at and learn from their experience. That is accompanied by “cultural transfers” on institutional level as part of the process of accession to the European Union. Small-scale family farming with diversified activities has a hard time to find its niche in a capitalistic market oriented economy driven by the economy of scale. Some of them in a world of economic globalization filled with various WTO and EU regulations feel like trapped on an enemy territory. Ironically, lot of older peasants with nostalgia remember socialistic period when there was a secure market for their products, perhaps with a fixed prices – and when they could make a decent living. Farmers with more ‘entrepreneurial spirit’ tend to expand their business, to grow and they are more open to transfer of Western knowledge and good practices. Country specific circumstances can aggravate or alleviate their efforts. In wine sector in Croatia and especially in Bulgaria, there is present dissatisfaction with the role of the State.20 Small and middle-size vine-growers and wine producers resent institutional and market imperfections and unfair competition.
In sectors and regions with sporadic presence of foreign investors, direct cultural transfer in local setting is lacking. Since there was no introduction of new Western skills and other patterns of economic culture, entrepreneurs-beginners and small vine-growers and wine producers were left to self-Westernize themselves. No wonder that majority of successful medium wine producers heavily have been relaying on their human and social capital.
Comparative analysis indicated importance of some factors that facilitated a process of self-Westernization. It seems that these factors partly explain a renaissance of wine business in wine districts Villány (Hungary) and Istria (Croatia) and to lesser degree to Kutjevo- Požega Valley (Croatia):
geographical proximity to countries which are big or main world players in wine business;
valuable resource (especially during Socialism) were international family ties with relatives on the West;
also valuable resource were various forms of exposure to Western culture – either in sphere of professional contacts in agribusiness, or even exposure to different life styles
bicultural heritage that stems from historical reasons and/or from the status of ethnic minority.
Most medium-scale producers succeed to achieve production technology of their Western counterparts. Yet, to run successful enterprise and to grow they need to enlarge number of employees in order to increase managerial knowledge and skills. Comparative analysis revealed various strategies which agricultural producers use depending to their economic strength, entrepreneurial spirit, market conditions and institutional framework.
Creating an ethnoscape on the basis of winery has its positive results. It stopped migration from the region. The vineyards created new jobs; the new high-tech wineries improved management as well. “The Great Five” as an elite group of the town orchestrated the take-off of the whole community and re-integrated the locality in the new image of Villány. The modernization of wine production developed education, too (the winegrowers study the technologies of wine production, marketing, tourism, gastronomy, rural development policy, and so on). The adaptation of Western standards affirmed the quality control systems and resulted in repeated victories at international wine competitions. It the beginning, the actors of the “small miracle” in Villány imitated their Western role models in a very conscious manner, they wanted to produce quality wines. This implied the protection of rural environment, the preservation of ecological values in the region and the extension of the wine market on both domestic and European levels. The new, invented image of the town resulted in saving the cultural heritage of the villages and representing the local interests of the entrepreneurs. Currently, they are not only big entrepreneurs but also formal or informal co-coordinators of the communal, infrastructural and environmental programs in the region. They have learned Western skills of fund-raising, brain-storming and international project management.
The most important outcome of cultural encounters in the agricultural sector, particularly in branches of wine and milk production, is a realization of the importance of prioritizing quality over quantity. Reaffirmation of quality gives results and it is certainly an energetic push towards the quality in production. Wine based tourism has positive effects for whole community. Unilke in Villány, in Požega-Valley and Brestovitsa these possibilities are not fully realized.
As an unintended consequence of this process, they invented the Villány tradition by historicizing the wine cellars, rediscovering ethnic-German culture, and creating a new fashion of wine consumption. With the help of the VSWA, Villány has become part of a larger virtual and translocal network of European wine producing communities. In searching for their new image, they produced hybrid forms of Western and Eastern economic cultures: they serve French- or Italian-type quality wine in ethnic-German costumes to Japanese tourists, thereby – ironically – creating a new Hungaricum.
Common experience of Socialism should not overshadow the fact that Bulgaria, Croatia and Hungary had different patterns of the rural development before the end of Second World War II. Even, to be precise, these countries do not share “common” experience of Socialism. In these countries attempt of the socialistic transformation of agriculture and conversion of peasants into working class started within different circumstances, it was shaped by different degree of intolerance toward private land ownership and by politics/policy turns and twists. Each country responded differently to challenges of development, and process of transition towards capitalistic market in the agriculture resulted with various country specific idiosyncrasies.
Chosen countries differ regarding the process of EU enlargement, which presents different restraints and opportunities for rural entrepreneurs. Hungary, Bulgaria and Croatia had separate pace in accession to the European Union and exposure to European regulation and agricultural policy. In time of the fieldwork Hungarian agricultural producers already had experience with the Common market and Common agricultural policy; in Bulgaria they had experience with SAPARD – Special Accession Programme for Agriculture & Rural Development, and in Croatia preparation for implementation of SAPARD started.
A process of self-Westernization basically can be called “self-Europeanization” process, especially in the wine sector and in the light of accession of post-communistic countries in the European Union. Cultural encounters with the “strong Western” culture resulted with rejection of old and assimilation of advanced production technology and techniques. Simple study visit to some e.g. Austrian milk producer means a lot for them because …
Large investments are needed to accomplish goal technological modernization and that is the reason of common phenomenon of two-stage (or multi-stage) process of basic technological improvements in family wine cellars of successful rural entrepreneurs. It is much more demanding to do the same with former socialistic big wine producers. Small and middle-size wine producers have advantage to easy control quality of raw material (grapes) and to produce the high quality wines. Plus, they can afford to experiment. It is much harder job for enterprises - the big vine producers. That may result with certain animosity and conflicts. When it comes to export of wine, advantage turns into handicap of small and middle-size wine producers – because of relative small production quantity they have limited access to well developed export markets. The wine production is characterized by various strategies. Hungarian and Croatian wine-makers are more oriented toward domestic market and they are finding specific niche on certain foreign markets – e.g. restaurants. That makes less acute a problem of development of various managerial skills. Owners of the most famous wine cellars (in their country) usually tend to shape their enterprise as the family endeavor to ensure long-term stability and continuity. Despite possible family tradition in wine business, they are really a first generation of entrepreneurs. That means usually that they are firmly at the helm of the enterprise, carrying entire business on his shoulders. Decision-making power is highly centralized in hands of entrepreneur and degree of delegation of responsibility is low. Benefits of inclusion of family members, especially sons and daughters, are well known but, it always leaves a question of reconciliation of personal interests and family business needs. Small wine makers faced with increased competition in enlarged common market, as well as being a part of the global market, should look to secure their future in various forms of cooperatives. After socialistic experience many producers are quit reserved toward such forms of collective economic action.
Never the less, what might seem like “clean victory” of “strong Western” culture turns out to be invitation to all actors on both sides for a new way of looking at things. It is right time to evoke story of Castor and Pollux – with an adequate agricultural and rural development policies countries included in our analysis could fast close a gap between them and world leading countries.
We could not resist ending with one anecdotal outcome which is in a way highpoint of cultural encounters:
This agent took us and our wine to the World Exhibition in Sevilla. The foreign experts tasted our wines and said, “you, cheaters, you manipulate your wine. These are French wines with Hungarian labels.” And they came to Hungary, to Villány, exactly to our cellars and tasted our wines. Our wines fascinated them …!’ (József Bock)
So the West also has to learn – to forget bad reputation of the wine from the East. Now there you can buy not so good wine or fantastic, world class wine.
In countries with relatively small total production output, like Hungary and Croatia, orientation to the production of high quality wines should be encouraged.
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1 “(W)ine has played a central role in human culture for more than 8000 years. … The ancient Greeks were the first to cultivate wine for commercial purposes, and to market their wine abroad.” Microsoft Encarta Reference Library 2004.
2 Source: http://www.crovitis.com/display.php?page=viticultural , accessed March 7th, 2007.
3 Note: They came to Kutjevo from Hungary, the Zirc abbey by the Balaton Lake. After Ottoman retreat from Slavonia, Jesuits from Zagreb became owners of the Kutjevo manor.
4 See: http://www.csanyipince.hu/eng/teleki.html
5 Source: http://www.crovitis.com/display.php?page=viticultural, accessed March 7th, 2007.
6 In that sense countries of the New World have the longer tradition in the wine business.
7 One can argue that in socialistic system institutional context wasn't devised to allocate development to rural areas (e.g. Poljanec-Borić, 2005) or that socialism lasted too long after his modernization impetus in backward agricultural circumstances was exhausted.
8 Note: Grapes from low plain terrains usually is of the inferior quality comparing to grapes from well chosen vineyard positions in hills.
9 I express gratitude to colleague Ilia Iliev for his contribution to this paper, as well to authors of country case studies. All critics should be addressed only to Davor Topolčić.
10 Magyar Régiók Zsebkönyve 2001. KSH, Budapest 2002, 3-20.
11 Iván Szelényi: A posztkommunista átalakulási válság a mezőgazdaságban és a falusi társadalomban, In: Szociológiai Szemle 1992/3 15-43.; Ibid – King, Lawrence, P. (2005). “The New Capitalism of Eastern Europe: Towards a Comparative Political Economy of Post-communism,” in N. Smelser and R. Swedberg (eds.) Handbook of Economic Sociology. Princeton: Princeton University Press; Kuczi Tibor: Vállalkozói kultúra – az életutak finalitása In: Replika 1998 (29), 157-171.
13 Mihály Laki: Kisvállalkozás a szocializmus után. Közgazdasági Szemle Alapítvány, Budapest, 1998.
14 As pointed by Trigilia (2001). Seminal theorists of social capital, Bourdieu and Coleman, both define it with emphasis on functional aspects of social relations – as a resource.
15 Ágnes Czakó and Endre Sik (1999): Characteristics and origins of the comecon open air market in Hungary. In: International Journal of Urban and Regional Research 1999 23(4): 715-737., http://www.socialnetwork.hu/cikkek/cakosik..pdf.
16 See Katalin Kovács: polgárok egy sváb faluban. In: Tér és Társadalom 1990/1.
17 Today one of the most prominent Croatian winemakers, Mr. Zlatan Plenkovic in one newspaper interview remembered that in early years of cooperation with small vineyard owners: “… with whom, I must say, at the beginning I fought terribly about viticultural practice, if you have a goal to produce high quality wine…” (Svijet u casi, 94/2006).
18 If they ceased to be alternative buyer of low quality grape than the only alternative for small vineyard owner would be to produce pour quality home-made wine.
19 Bulgarian economic culture, at least in a sphere in wine business, is marked by mistrust between actors and low concern toward fulfilling contract obligations.
20 For instance, in Croatia as late as 2003 started work on the vineyard cadastre.