Davor Topolčić
with Ilya Iliev
Successful rural entrepreneurs in the transition to capitalism: Hungary, Croatia and Bulgaria
A comparative study
Contents
Summary ………………………………………………………………………………… 2
1. Historical background ………………………………………………………………………… 3
2. Methodological remarks …………………………………………………………………… 6
3. The uneasy terrain of post-communism …………………………………………………… 7
4. Cultural encounters ………………………………………………………………… 9
4.1. Small agricultural producers ……………………………………………………11
4.2. New rural entrepreneurs ………………………………………………………… 15
5. Outcomes of cultural encounters …………………………………………………… 22
6. Conclusions …………………………………………………………………………… 25
References ………………………………………………………………………………… 27
Summary
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.
1. Historical background
Making, selling and consuming of wine is unavoidably interwoven with cultural encounters throughout history[1] 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 impact[7] 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.
2. Methodological remarks
Comparative analysis[9] 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.
Table 1
The number of interviews per case study
Actors / Bulgaria -Milk producers / Bulgaria -
Wine producers / Hungary –
Wine producers / Croatia –
Wine producers
Number of interviews
conducted / recorded and with English summary
Domestic (82/36 ) / 7/7 / 20/8 / 39/5 / 17*/16
Foreign (1/0) / 1/0
* 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.
3. 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.