Economic Development in Denmark Before and During the World War/Development of the Co-operative Dairies
Development of the Co-operative Dairies
An important part in these changes has been played by the co-operative movement in Danish agriculture. In the middle of the nineteenth century the quality of Danish butter was generally poor. That made by the peasants was very coarse, and the only fairly good butter was that produced on large estates and known commercially as 'estate butter'. Some special improvements for dairy work, such as cream separators, etc., had been introduced on the large farms, especially after 1870. Attempts in various places were made at establishing private collecting dairies which received the milk from the neighbourhood and tried to obtain a uniform product. But the projectors of these establishments found many difficulties in their way. They had no control over the persons who contracted to supply the milk and often found them lacking in cleanliness. Moreover, it was difficult for them to dispose of the skim-milk and butter-milk; and then, too, there were added difficulties of transportation. Many of the private dairies consequently had to close down, and then it was that the co-operative movement was started, the first co-operative dairy having been opened in 1882 in a village in Jutland. In the co-operative system all persons who furnished milk ran the same risk and were jointly and severally liable, and profits were divided in proportion to the amount of milk delivered by each of the co-operators. The system was surprisingly successful, and it was not long before it was in operation all over the country. In 1909 there were 1,157 co-operative dairies, as compared with 238 collecting dairies and 90 estate dairies. Of all the cows in Denmark only one-sixth were outside of the co-operative dairies.
The co-operative association pays the current price for all the milk delivered to it, and the individual members take over the skim-milk and buttermilk at a fixed price which is often very low. Accounts are balanced at short intervals, a certain sum being held over as a contribution toward the defrayal of operating expenses. At the close of the financial year the considerable surplus is divided among the members in proportion to the amount of milk each has delivered, regard being taken to the percentage of butter fat.
The difficulty of procuring the necessary funds for buildings, machinery and initial operating expenses was overcome with comparative ease by that principle of solidarity which seems natural to the rural population, especially in small communities where the inhabitants all know one another. The members of each dairy association contracted to remain in it for a specified length of time; and its large membership was a good guarantee of its solvency. As a rule the loans are quickly repaid, so that the risk assumed by individual members is never very large. Generally the time soon comes when the members can get interest-carrying co-operative securities in the existing capital in proportion to the milk delivered. The constitutions of the corporations are simple, each member generally having but one vote, whatever the size of his holding and his contribution of milk.
The co-operative dairies have been of great value to Danish agriculture in that they have made farming an industrial enterprise involving the use of machinery. The superiority of estate butter to peasant butter consequently no longer exists, and the butter of all co-operative dairies, whether it comes from large, medium-sized or small holdings, has equal rating in the foreign market. The exportation of live-stock and meat has reacted upon the dairies in a manner greatly to their advantage, partly because all cows unsuited for milk production are at once profitably disposed of, and partly because the by-products of the dairies are in demand for hog-raising. In certain respects the co-operative dairies give the owners of small holdings the advantage of working on a large scale, while, on the other hand, much work that is better suited for small holdings is handled by individuals.
The development of this movement has not been entirely without social drawbacks. Farmers of earlier generations were naturally more or less liberal with their milk, whereas now they are tempted to count every ounce. But the consequent decline in gifts or payments in kind to their hands is more than balanced by the indubitable rise in wages.
The co-operation of the Danish farmers in dairy work led, of course, to other similar developments. Local associations were formed which, in 1899, were consolidated under the name of the Co-operative Danish Dairy Associations. The latter was reorganized in 1912 as 'The Central Organization of Danish Dairy Associations', the purposes of which were to guard the common interests of the dairies, to note exchange quotations, to compile dairy statistics, etc. A now abolished association sought to introduce a common trade-mark to protect exported butter against imitations. Finally, an act of 1906 legalized a common trade-mark for all butter prepared from pasteurized cream. An act of 1911 prohibited the use of this trade-mark (Lur Brand) on butter containing more than 16 per cent, of water, which was thereby debarred from exportation. The Danish Dairy Farmers' Association, incorporated in 1887, has established an accident insurance, a relief fund, etc. It also organizes exhibits and works in various other ways for the common welfare.