A Land ‘of Milk and Butter’: The Long Run Determinants of the Rise of Cooperative Dairying in
Denmark1
Peter Sandholt Jensen, University of Southern Denmark
Markus Lampe, Universidad Carlos III Madrid
Paul Sharp, University of Southern Denmark
Christian Skovsgaard, University of Southern Denmark
FIRST DRAFT 4 JANUARY 2016. PLEASE DO NOT CITE WITHOUT CONSULTING THE AUTHORS
FIRST.
Abstract: How and why did cooperative creameries come to dominate agriculture so rapidly in
Denmark after 1882? We explain this through the long-run persistence of the spread of an
earlier agricultural system with proto-modern dairying from the Duchies of Schleswig and
Holstein to traditional landed estates more than a century earlier. The location of cooperative
creameries in 1890 is closely associated with the location of these so-called hollænderier, after
controlling for other relevant determinants of cooperation. Supported by contemporary
sources, we interpret this as evidence for a gradual spread of ideas from the estates to the
peasantry.
Keywords: Cooperatives, dairying, Denmark, institutions, Schleswig-Holstein, technology
JEL codes: N53, O13, Q13
1
We would like to thank Dorte Kook Lyngholm from the Danish Center for Estate Research for sending us some of
the data on the estates. Moreover, we would like to thank Ingrid Henriksen, Carl-Johan Dalgaard and participants
at conferences and seminars for helpful suggestions. Markus Lampe thanks Fundación Ramón Areces for funding.
1
1. Introduction
There is a substantial literature in economics on the spread of technology, institutions and ideas
across space and time, and the influence this has on economic development both across and
within countries. Here we focus on a specific example centered on the Kingdom of Denmark,
and the emergence of a modern dairy industry based on a new technology, the automatic
cream separator, and an institution, the cooperative creamery, which it is commonly agreed
propelled the country towards prosperity in the last decades of the nineteenth century. 2
Map 1: Location of Cooperative Creameries in 1890
Source: Bjørn 1988.
After the foundation of the first cooperative creamery in 1882, within a decade the whole
country was covered, as shown in Map 1. This motivates the present work: what allowed this
2
See for example Henriksen (1993) and Henriksen et al (2011).
2
institution to spread so rapidly within the space of a few years? Usually this is seen as a turning
point in Danish history. We argue that it was rather the end result of a long period of
agricultural enlightenment, as a modern scientific form of agriculture spread into and
throughout the country (see Christensen 1996, and also Mokyr 2009, chap. 9). We demonstrate
this by showing that the pattern of adoption in Denmark follows the introduction of protomodern dairies on estate farms more than a century earlier.
We consider specifically the persistent impact of the introduction of a modern, scientific
approach to agriculture in Denmark. Here we must distinguish between the Kingdom of
Denmark (which more or less follows the modern borders of Denmark), and the Duchies of
Schleswig and Holstein, which were largely German-speaking areas under the Danish king.3
Early on in the Duchies a system developed on the large manorial estates known as
Koppelwirtschaft in German, or kobbelbrug in Danish. It became the dominant field system in
the Duchies in the 1700s, and consisted of a new layout and usage of the fields through crop
rotation, but since it comprised a large amount of land left aside for pasture, it also soon came
to be associated with dairying. The unprecedentedly large herds of milch cows these estates
kept, commonly running into the hundreds, allowed for economies of scale and the invention of
an innovative new system of butter production, the hollænderi. These innovations came
relatively late to Denmark, but when they did they gradually transformed Danish agriculture,
and then the country as a whole. We argue that they set Denmark on a path which was to lead
to the successful and rapid introduction of the Danish cooperative creameries from 1882, which
is generally taken to mark the origins of her economic rise.
Our research contributes to a number of fields: In the first place, we explain the rise of dairy
cooperatives in Denmark. These are the paradigmatic case for success of cooperation in
development and also one of the most salient cases of organization of agricultural producers of
a specific good, i.e. milk, to be converted into butter. Second, we give prominence to the
spread of a new production technology/regime among elite producers, hollænderier (estate
dairies) in the eighteenth century, which helped to prepare the ground, via trickle-down effects,
3
Both were lost to Prussia during the war of 1864, although the northernmost part of the Duchy of Schleswig was
given to Denmark following a plebiscite after the First World War.
3
for the rapid spread of commoner farmer cooperatives and automatic cream separators one
hundred years later. By this, our third contribution becomes salient: the evaluation of the role
of agricultural elites and their estates (latifundia) for economic development and the choice of
productive specialization in general.
Regarding the first point, the existing literature (basically Henriksen 1999, inspired by Ó Gráda
1977) has attributed the rapid diffusion of the cooperative dairy movement in Denmark mostly
to pre-existing cow densities. In other country-commodity specific studies, scale of production
prior to the introduction of cooperatives has also been highlighted (Garrido 2014 on the –
rather unsuccessful – orange-grower cooperatives in Valencia, Spain), apart from other
product-specific factors and access to transport networks. Recent internationally comparative
studies (Fernández 2014) have highlighted the importance of social capital (or trust) proxied by
a variety of variables, especially low land inequality and (protestant) religion. While religion and
social fractionalization have proven to be important in other countries, this arguably could not
have been the driver in the context of Denmark given the extremely homogenous population.
We do, however, control for the presence of estates at the parish level, to disentangle the
specialization and technology effect of estate-dairies from the potential political and social
consequences of the presence of estates – although the progressive Danish constitution of
1849 should have mitigated the effect of any prior coercion (Henriksen 1999, p. 60).
Turning to the second point, we highlight that the pre-existence of specialized estate dairies in
and from the 1780s had a causal effect on the rapid adoption of the cooperative form using
cream separators to produce butter one hundred years later. We show in a narrative account
how the specific organizational and technological innovation of estate dairy production came to
Denmark in the 1760s and quickly increased in importance, although this adoption was unequal
across the country, and led to an uneven spread of emulation by common farmers in the
following decades, a common pattern for the diffusion of innovations in early modern societies,
as highlighted by Mokyr (2009) for the British ‘agricultural enlightenment’ 4 . The main
4
Mokyr (2009, p. 187) portrays one of the most famous practitioners of agricultural improvement in Norfolk
around the turn from the eighteenth to the nineteenth century, Thomas Coke of Holkham, as a firm believer in the
spread of innovation by direct observation of what works. However, the consequence of this under the
4
alternative use of the same resources, cattle-fattening, within the production system of
Koppelwirtschaft, was still discussed and seen as viable in the run-up to the spread of dairy
cooperatives. We hence rely on the pattern of diffusion of Koppelwirtschaft with dairy units
from the original place of introduction to estimate its causal effect on the establishment of
cooperatives at the parish level, following path-breaking studies on the spread of ideas such as
Dittmar (2011) on the diffusion of the printing press and Becker and Woessmann (2009) and
Akçomak et al. (2013) on the spread of religious practices that favor literacy. In relating to this,
the present paper is closely connected to recent studies that show the long-run impact of the
adoption of agriculture (Olsson and Hibbs 2005; Putterman 2008; Comin et al 2010, Cook
2014a) and major productivity improving implements like the (heavy mouldboard) plough
(Andersen et al 2013). While our research is concerned with the diffusion of ideas, technology
and specialization that facilitated the establishment of cooperatives, and not directly with the
effects of cooperatives themselves, it still complements the emerging literature on the effects
of new crops on productivity, population and economic growth, and political stability (Nunn
and Qian 2011, Cook 2014a, Cook 2014b, Dall et al 2014, Chen and Kung 2012, Jia 2014, Bustos
et al 2014).
Finally, previous studies have highlighted conflicting views on the role of large landowners in
economic development (see Lankina and Getachew 2013 for an overview). On the one hand,
the concentration of agricultural resources in the hands of large landowners and accompanying
high levels of land inequality are often seen as facilitators of political instability,
underinvestment in human capital, and public goods in general (Engerman and Sokoloff 2002,
Banerjee and Iyer 2005, Cinnirella and Hornung 2013, Baten and Juif 2014, Galor, Moav and
Vollrath 2009), and as limiting the scope for agricultural cooperation both through lower social
capital (Fernández 2014) and through direct crowding-out (Henriksen 1999). On the other hand,
in contexts in which property rights are poorly defined, large landowners can ‘shelter’
dependent peasants from extractive state institutions (Dell 2010) and effectively lobby for
circumstances of contemporaneous communication and transport systems was that ‘his improvements travelled at
the rate of a mile per year’ from his model Park Farm (Coke of Holkham, cited in Mokyr (2009, p. 192). Hence,
‘Progress was slow, local and uneven’, even in Britain by 1850, and large differences in technology could be
observed ‘even in close proximity’.
5
better provision of collective goods and infrastructure than politically weak peasant
communities (Dell 2010, Dell 2012). In Denmark, during the nineteenth century, the property
rights of peasant farmers became increasingly more secure through enclosure and formation of
inheritable property. Hence we do not believe – and find no evidence – that estates per se
should have had a necessary facilitating function for the establishment of cooperatives. On the
other hand, while large landowners in Denmark might have been interested in blocking
education and other rights for peasants between the 1780s and the 1880s, as evidenced by the
short-lived second serfdom in the late eighteenth century, effectively, the centralization and
professionalization of government and the Constitution of 1849 reduced the scope for such
action. However, since long-term effects of elite blockage might have persistent outcomes, we
do control for the share of a parish under the direct control of estates (demesnes) and find that
the relationship is not clear, and that it does not impact on the coefficient of interest.
The following section describes Koppelwirtschaft and hollænderi as they emerged in SchleswigHolstein, and Section 3 considers their spread into and throughout Denmark. Section 4 provides
an empirical analysis of the impact of this spread for the emergence of the cooperatives more
than a century later. Section 5 concludes.
2. Koppelwirtschaft and hollænderier
Koppelwirtschaft was a ‘collective invention’ by estate owners and their administrators in
sixteenth-century Schleswig and Holstein, the German part of the Danish monarchy, in order to
overcome the fundamental problem of intensified organic agriculture, i.e. how to sustain
production and yields in the long run by obtaining sufficient fertilizer from animal husbandry. It
consisted of changing the traditional three-field rotation with outlying pasture areas into an
eleven-field rotation, thus alternating the use of individual fields between pasture and grain
cultivation over eleven years.5 This was important both for sustaining grain yields and to obtain
5
Nevertheless, this system, even with improvements, meant that the large proportion of the fields left as fallow
(between 1/7 and 1/11) did not give a return. Thus Albrecht D. Thaer in Germany promoted New Husbandry (in
Danish vekselbrug or vekseldrift) based on English-Flemmish practices (see e.g. Thaer, 1801-1804). The main
6
sufficient fodder for the animals, normally in the form of summer pasture and winter hay – all
this at the same time as production surpluses were exported from rural areas in order to
sustain growing urban populations.6 In modern times, this problem arose first in the coastal
provinces of the Netherlands and modern-day Belgium, and it was from here that approaches
were diffused and adapted to local conditions in other places, such as ‘convertible husbandry’
in England (Mokyr 2009, p. 173). The basic solution, also in Holstein, consisted in reducing
extensively the use of outlying grazing areas (pastures) and converting them into part of the
crop rotation by changing the traditional design of fields and the crop rotation itself. Although
not part of the original system, clover was gradually introduced into the crop rotation system,
since the many grain crops had a tendency to impoverish the earth, weakening the animals who
grazed on it, and thus also the fertilizing system.
Koppelwirtschaft was introduced on large manors because they were the most commercially
oriented agricultural units, the most likely to be able to sustain capital investments and labor
efforts (via corvée or hired labor), and also the ones with the largest freedom to act under the
institutional framework of the time. It should be highlighted that everywhere Koppelwirtschaft
was introduced, it was mainly used by estates in their directly controlled production on the
demesne. Many of these, managed by relatively professional staff, exhibited a much higher
market orientation than the average farmer (Porskrog Rasmussen 2010, p. 182), and required
more complex decision making and control tools, both for arable farming and animal
husbandry. Hence, they were also at the forefront of other innovations such as the detailed
accounts kept on farms and big dairies, which allowed for the rationalization of decisionmaking, especially in the more non-traditional economic activities like dairying (see Lampe and
changes were the introduction of more clover and other legumes, and oil plants to replenish the soil; the use of
the fallow to grow ‘fallow fruits’ – potatoes, linen, root vegetables, etc.; and the introduction of summer stable
feeding for cattle, which meant less land was needed for grazing, and a more efficient use of the manure. Despite
enthusiastic promotion of this in Denmark in the early 1800s, it did not become widely adopted because it appears
it was unsuitable for Danish conditions, except for the most fertile areas. The same was true for Schleswig and
Holstein, where Thaer himself was informed by a leading practitioner that barn feeding in summer led to quality
risks for milk and butter production for large herds, and resulting reputational risk (Thaer 1799, pp. 197-203; see
also Rixen 1800, pp. 362-4).
6
In this period, only farms located very close to larger cities might obtain external fertilizers, such as night soil or
other (largely organic) waste. An alternative, to grow fodder crops (like clover or turnips, etc.) on the fallow, was
not practiced in this early period, in part because there were legal rights by several parties for grazing on the fallow
and on cultivated lands after the harvest (see Schröder-Lembke 1978, p. 64, and 111-120).
7
Sharp 2015). With these advances on the estates, a gap in quality between estate-produced
and peasant producers in terms of grain yields and, for example, butter quality started to be
noted (Bjørn 1988, p. 159; see also Lampe and Sharp 2014a).
The system invented in Schleswig-Holstein prioritized the quality of pastures over agricultural
land, since that region, with its soils particularly suited for fertile grasslands, in the sixteenthcentury had focused on oxen fattening and horse breeding, and during the seventeenth and
eighteenth century, partly under the influence of specialized immigrants from the Netherlands,
developed a strong dairy sector. This focus on dairying in the Duchies began already in the
latter half of the seventeenth century (Porskrog Rasmussen 2003, p. 447) and seems largely to
have been promoted by changes in the relative prices of grain and oxen versus dairy products
(Porskrog Rasmussen 2010, p. 180). Since the original innovators were immigrants from
Holland, the tenants involved in dairying became known as hollænder (and their dairies
hollænderier),
even
if
they
were
not
of
Dutch
descent.
7
The
tenancy/lease
agreements/contracts were awarded in auctions and based on fixed rents per cow of up to 10
to 12 rigsdaler/reichsthaler per milk cow (Schröder-Lembke 1978, p. 63).8
In fact, these leases seem to have been one reason the dairies were so productive, since they
entailed that the business of the dairy was leased from the estate owner to a specialist
dairyman with a well-specified contract9. Drejer (1925-33, p. 181-2) gives a full description of
their typical contents.10 In general they specified the hollænder’s legal situation, and how he
should run his business. He was usually provided with specially adapted dairy rooms, stables,
etc., but he had the responsibility to look after them. Likewise, he was provided with good and
well-fed milch cows and bulls, for which the tenant was responsible and must not sell, slaughter
or rent out, although he must replace them if something happened (for example if they got
injured or they no longer provided good milk). Finally, he was given a long list of implements he
needed. In terms of running the business, he was told where and how to feed the cattle, and
7
Bieleman (1996) gives an account of the sophisticated dairy sector in the Lower Countries during the Dutch
‘Golden Age’.
8
Iversen (1992, p. 79-83) gives information on how these charges varied across time and space in the Duchies.
9
See Henriksen et al (2012) for a description of the later importance of contracts for Danish cooperative dairying.
10
A very similar description is given by Iversen (1992, pp. 76-77) of two contracts from northern Schleswig.
8
where to milk them. During the winter, he was told what he was provided, what he could take
for himself (typically hay from the fields), and how much grain would be provided for the
household. He himself was responsible for providing firewood, wood for tools, etc. Lastly, he
was usually told to be careful with fire, candles, tobacco pipes, etc., not to keep loose dogs, and
that fishing and hunting were not permitted on the estate. Although these contracts are
valuable as a source of information about what the tenant should have been doing (seen from
the estate owner’s side), Porskrog Rasmussen (1987, pp. 63-65) warns that they are by their
very nature normative, and they of course do not tell us whether or not these conditions were
met, or indeed whether they were (economically) favorable for the tenant.11
Many estates came to have very large herds of cows, even by the standards of the late
twentieth century. By 1715, of 46 manors in Schleswig, there were 91 dairy units with a total of
11,696 cows, much larger than those in Holland from which the system was imported (Porskrog
Rasmussen 2010, pp. 181-2). The professionalized dairy units were superior and innovative
compared to traditional methods in many ways, in particular through (following Bjørn 1988, pp.
158-9): 1) Practical, often independent, rooms (the ‘Hollænderi’), where there was a reasonably
constant temperature throughout the year; 2) Practical tools, which were easy to clean; 3) A
very strong focus on hygiene; 4) Cows were milked at particular times, and milked dry (thus
ensuring that the last drops of cream-rich milk were collected); 5) Control of the temperature of
the cream, so that it could be skimmed and churned at the optimal time; and finally 6)
Carefulness at all times from milking to packaging. The estates also continued to innovate
outside the dairy itself, for example by providing strong feeding with hay and grain through the
winter, so that cows could be productive as soon as they went onto grass (Hansen 1994, p. 59).
Before the Holstein system, combining Koppelwirtschaft and hollænderier, spread to Denmark,
it arrived at the beginning of the eighteenth century, via estate owner Joachim Friedrich von
der Lühe to the Panzow estate in neighboring Mecklenburg, where soils were not so favorable
to grass and productive specialization focused on grains. He nevertheless also introduced a
11
For a discussion of incentive problems in these relationships and alternative arrangements see von Treskow
(1810).
9
relatively large herd of cattle, constructed a dairy unit and leased it to a specialized dairyman
(Schröder-Lembke 1978, p. 65-67).
3. The spread of the Holstein system to and throughout Denmark
In the Kingdom of Denmark itself, from the Middle Ages until the seventeenth century, estates
as well as peasant farms typically only had as many cows as they needed to feed the household,
and more sophisticated dairy products were imported from Holland (Appel and Bredkjær 192433, pp. 279-80). This began to change from the second half of the eighteenth century as herds
increased, and the word hollænderi entered the language (Drejer 1925-33, p. 138). However,
although we can find some examples of hollænderi in the seventeenth century (see for example
Drejer 1925-33, pp. 140-143; Skrubbeltrang 1978, p. 120), some of which had large herds, and
which were sometimes run by Dutch12, it was not until the late eighteenth century that dairying
in Denmark was revolutionized following the Holstein model. Actually, for the latter half of the
1700s, authors often highlight the low proportion of cows (and bulls) relative to horses in the
use of pasture in Denmark. Hertel (1920, 149-51) for example, estimates the cattle to horse
ratio at only 1.4:1 in the 1770s13, much less than the 4:1 in 1914.
An important prerequisite to this was the redistribution of land throughout the eighteenth
century. Denmark in the 1600s consisted of a large number of Crown Estates, under the direct
administration of the monarch, smaller estates owned by the nobility, as well as many medium
sized farms or bondegård, which were the result of the fall in population after 1340 (Porskrog
Rasmussen 2003, p. 8). The 1600s then saw some advances in agriculture, in particular in terms
of improvement of pastureland, for example through drainage, and a better understanding of
the way in which to use manure. Much of this came under the guidance of entrepreneurial
aristocrats, for example Christian Rantzau, owner of the Demstrup estate from 1627-1663, who
12
It has been suggested that the fall and stagnation in the price of grain from the mid-1600s might have given an
incentive to move into dairying (Frandsen 2005, p. 146).
13
When however cattle pests had done much to reduce cattle stocks.
10
used his serfs to improve his land and possibly to introduce Koppelwirtschaft (Frandsen 2005,
pp. 46-47).
From the 1600s and into the 1700s, the bad finances of the crown, largely as a result of
continuous wars against Sweden until the latter’s final defeat in 1721, meant that the King was
forced to sell off more and more of his estate, until by the 1740s almost all the crown estates
were privatized. Many of these were purchased by buyers with little knowledge of agriculture
(Frandsen 2005, p. 58 and pp. 74-76), and a debate ensued about how to take advantage of this
situation to introduce reforms and a general modernization of agriculture (Jensen 1998, p. 37-8;
Feldbæk 1988, p. 19).
The introduction of Koppelwirtschaft was to be the result of this debate, although most saw it
simply as a means to increase grain yields. This is best illustrated by a famous quote by Adam
Gottlob Moltke, effectively prime minister from 1746 to 1766 and generally credited with
introducing Koppelwirtschaft into Denmark (Jensen 1998, p. 92), from a plan devised in 1746
for King Frederik V: ‘Agriculture in these lands seems to be still very backward. I keep myself
assured that, if the soil here would be worked as is custom in other countries, especially in
Holstein, the land could yield twice as much as it has produced hitherto.’14 In the context of his
ascent to Lord Chamberlain for Frederik V in 1746, Moltke also received the large estate of
Bregentved in Southern Zealand, and up to 1751 bought four more nearby estates:
Turebyholm, Juellinge, Tryggevælden and Aslev (Porskrog Rasmussen 2010b, p. 11).15
Moltke, who was born in Mecklenburg, came to own the estate of Niendorf near Lübeck in
1759, on which Koppelwirtschaft was firmly established, under fortuitous circumstances, and
sold it two years later with a large profit (Porskrog Rasmussen 2010b, p. 19-21). Moltke took
the former leaseholder of Niendorf, Johann Matthias Völckers, to his estates on Zealand to
become his administrator and agricultural reorganizer there. He started on the newly
14
From ‘Grev Adam Moltkes Plan for Frederik den Femtens Regering’, quoted (with Danish translation) from
Porskorg Rasmussen (2010b), p. 9 and note 1.
15
During the next decades, Moltke would own estates in all parts of Denmark as well as in Schleswig and Holstein
and become the largest landowner in the Monarchy (see the map in Porskrog Rasmussen 2010b, p. 14). His
cultivation reforms in Denmark were centered mostly on the aforementioned estates on Zealand and the ones he
bought between 1763-5 on Fyn (Glostrup with Anhof, and Rygård).
11
established farm of Stenkelstrup (later named Sofiendal after Moltke’s second wife Sophie
Hedevig Raben) where Völckers until 1766 established an exact copy of Holstein
Koppelwirtschaft with the layout of the eleven fields, the original crop rotation and a
hollænderi. Under the supervision of Völckers, who in many cases also acted as leaseholder of
the reformed estates, Alslev, Turebyholm and the Bregentved main estate were also
reorganized up to 1767, with Juellinge following in the early 1770s. Most of Moltke’s
reorganized estates were then, as before, leased in auctions to interested leaseholders (see
also Jensen 1998, p. 49-51).
In reports he wrote for the king in the 1780s to highlight his role as a reformer, Moltke claimed
that the value of his lease contracts in 1787 had increased by more than 200 percent since the
introduction of Koppelwirtschaft in comparison to the 1740s. Porskrog Rasmussen (2010b, p.
26-7) has remarked that although this increase should be qualified since cattle plagues had
decreased the value of estates in the late 1740s, it was still far beyond the increase in prices16
over the same period (about 30-40 percent). For the estate of Turebyholm he quotes increases
in the leasing fee from 2700 rigsdaler before 1767 to 5000 in 1792, the year of Moltke’s death.
The number of cows had also increased on Moltke’s estates, although only by eighteen percent,
from 670 to 790. Thus, Moltke’s reorganization certainly increased the capitalized value of his
estates.
The restructuring of the estates involved substantial expenses on improvements and
infrastructure, as well as lots of hard work, which again fell largely on the unfortunate serfs,
and it is surely no coincidence that serfdom was gradually extended throughout the eighteenth
century until its final abolition in 1800 (Olsen 1957, p. 148). However, increasing prices of
agricultural goods from the 1760s meant that there was an incentive to do this. Moreover, as
time progressed, a new model for the estates emerged where the peasants had partial or full
rights to own their farms, and estate owners hired their labor. This became attractive for estate
owners, since real wages were falling. Then, as land prices increased, estates became sought-
16
The official prices, ‘kapitelstakster’.
12
after investment objects. Their owners took advantage of this by selling off their tenant farms,
and even by parceling out their demesnes in some cases (Frandsen 2005, pp. 74-76).
Moltke was imitated by his neighbors. For example, the Løvenborg estate of Severin
Løvenskjold was reorganized in 1767 with Völckers as expert, and the Gisselfeld estate,
adjacent to Bregentved and owned by Frederik Christian Danneskiold-Samsøe, in 1768
(Porskorg Rasmussen 2010b, 27; Jensen 1998, 52). In 1769 the estate of the Vemmetofte
Jomfruekloster was reorganized, with Völckers as consultant to its administrator, Christian
Friedrich Westerholdt (Lindvald 1905-08, p. 250; Prange 1971, p. 552). Gradually Moltke’s
example was followed in other parts of Denmark.17
Thus, by 1800 most demesnes were using Koppelwirtschaft, and it was accepted as the ideal.
Peasant agriculture on the other hand largely still used the medieval three-field system (Falbe
Hansen 1889, p. 10; Bjørn 1988, p. 35, Frandsen 2005, p. 90). There was some regional
variation, however. The islands of Denmark were seeing an expanding dairy industry, mainly
concerned with supplying Copenhagen, of these, those on Funen were considered superior
(Skrubbeltrang 1978, p. 242, 401). Some of the estates were reaching Holstein proportions, for
example Antvorskov, where they had 300 milch cows.18 Jutland, on the other hand, was still
focused on supplying cattle and horses for export to Germany19 (Drejer 1962, pp. 20-21, Appel
1924-32, p. 293). Here the proportion of estates with hollænderier was just 11 percent in 1782.
The state of Danish agriculture around 1800 is summed up in a series of books by Begtrup
(1803, 1806, 1808I, 1808II). He also noted the favorable state of dairying on the island of Funen,
where even peasants, who had more cows and received better prices than elsewhere, favored
dairy production mostly to supply the Copenhagen market. The quality of the cattle was good,
17
In the late 1760s, he and Völckers also developed a version of Koppelwirtschaft for the villages dependent on his
estates which respected traditional common land rights (fællesskab) without the comprehensive institutional
reforms that would come with enclosures later in the century (Porskorg Rasmussen 2010b, 30-35). It did, however,
not spread as fast and widely as its estate demesne counterpart.
18
Almost exactly the number which Bærner in 1770 had estimated based on the milk cattle carrying capacity of
Antvorskov demesne of about 888 Tdr. Land in an 11-field rotation (Lindvald 1905-08, p. 275).
19
One exception was Thy, which was famous for its cows and its giant Thybo cheeses, which were exported to
England (Drejer 1962, p. 20).
13
both for the estates and peasants, and red was the favored color 20. He was, however,
particularly impressed by the estate production, where he describes how the dairies seemed to
have been built ‘for a higher purpose’ (Begtrup 1806, pp. 96-98). On Zealand he seems to have
been much more taken with the estate production than that of peasants, and notes that they
had attempted to imitate the Holstein system with herds of up to 500 cows (Begtrup 1803, pp.
404-8). Jutland was the most backward region due to the historical importance of the trade in
live cattle, but even there it had become less important and half the estates had introduced
dairying (Begtrup (1808I, p. XXVII-III). The largest dairy farms were in Borglum and Breilev
Kloster, the second of which was owned by a Holsteiner (Begtrup 1808II, p. 499).
The true decline in meat cattle relative to dairy cattle only came about during the first third of
the nineteenth century however (Appel and Bredkjær 1924-33, p. 284). By the 1820s, many
leading farmers in Denmark were from Holstein (Bjørn 1988, p. 24), one of the most famous
examples being the Valentiner family. Heinrich Christian Valentiner purchased the Gjeddesdal
estate in Greve, close to Copenhagen in 1822. The estate was in a bad state and making losses,
but he introduced the system he knew from home. It has been suggested that he emigrated
because farms in Zealand, being less advanced than those of Holstein, were cheaper (Andresen
1992, pp. 1-4). Although the estate began by exporting salted meat to England and France in
the 1820s, H.C. Valentiner soon began to replace steers with cows, and opened a dairy in 1831,
so that when his son Adolph took over in the same year, the estate only kept cows (Andresen
1992, pp. 5-7). Adolph Valentiner proved a great innovator and contributor to dairy science,
publishing the first of many articles in the Danish agricultural journal Tidsskrift for Landøkonomi
in 1837, in which he amongst other things highlighted the primacy of profit motives, and
published his accounts (Andresen 1992, pp. 7-8). The success of Gjeddesdal from 1853 made it
an attractive place for young farmers to visit and learn their trade, and it was the site of
numerous experiments by the Royal Danish Agricultural Society, the members of which were
estate owners, from the 1860s (Andresen 1992, pp. 8-10), and continued to play an important
innovative role under Adolph’s son, Heinrich Nicolai Valentiner, in 1868.
20
In fact it was not before 1878 that the Danish Red milk cow, which was to dominate Danish agriculture for
decades, was officially designated.
14
Between 1837 and 1875, when this role passed to the agricultural colleges, the Royal Danish
Agricultural Society organized apprenticeships on its members’ estates, including Gjeddesdal.
At its height, around 300 were placed, thus again demonstrating the importance of the estates
for spreading modern dairying across the country (Hertel 1920, p. 358).
Another energetic promoter of dairying was another Holsteiner, Edward Tesdorpf, who took
over Orupgaard on the island of Falster in 1839. He bought in angler cattle from eastern
Schleswig in 1841, and his whole herd changed in 1845 (Bjørn 1988, pp. 152-3). Although he
promoted many valuable innovations, his importance for the spread of the Holstein system has
certainly been overemphasized by writers such as Hertel (1920, p. 274) who, in a history of the
Royal Danish Agricultural Society, of which Tesdorpf was a president from 1860-88, goes so far
as to date the birth of modern dairying to his move to Denmark.
In fact, by the 1840s the transformation of Denmark was already well underway. The famous
German travel writer, Johann Georg Kohl, observed that the Holstein System had spread
throughout the country, even to Northern Jutland, where he noted that many farms had
already switched from oxen-raising to dairying. He was impressed by the scientific nature of this
progress, and noted that important articles on dairying from the Duchies were reprinted all
over Denmark. In conclusion he stated his belief that Denmark would eventually converge on
the Duchies, and that they would finally integrate completely with the Kingdom to become a
land ‘not of milk and honey, but of milk and butter’ (Kohl 1846, pp. 58-60). Other foreigners,
even from the UK, marveled at the scale of the operations, such as the British writer, Samuel
Laing, who wondered at the ‘regularity, arrangement, cleanliness and the vast scale of all the
operations [which] give the impression rather of a great manufactory of butter and cheese than
of a farm’ (Laing 1852, p. 124).
Between 1826 and 1844 the Royal Danish Agricultural Society commissioned a series of reports
on the state of agriculture across the country. These amtsbeskrivelser (county descriptions)
were to answer 29 set questions, including some specifically about animal husbandry, including
one which asked whether dairying or steer fattening gave the best return. Since different
locations were described at different points in time, these provide a valuable source for
15
understanding the spread of modern dairying across the country. The earliest reports are
somewhat colored by the agricultural crisis which ensued following the Napoleonic Wars until
around 1830. These five early reports focus exclusively on counties in Jutland, and reflect the
concerns of farmers about the decline in the trade in live cattle. Dairying is little mentioned,
except in the case of Aarhus County in the mid-east of the peninsular.
Three reports were published in the early 1830s, one from the island of Zealand, emphasizing
that dairying was a dominant activity, and two from north and central Jutland, which reveal
that the estates were mostly fattening steers for export. Between 1837 and 1840, six more
reports were published. The reports for the islands of Funen and Zealand describe estate
production as being heavily dominated by dairying, with lively local discussions about dairy
science. In Præstø County, in the south of the island of Zealand close to where Moltke first
introduced the Holstein system in 1766, it is also stated that good dairy practices were even
spreading to the peasantry. Viborg County in mid-West Jutland is described as undergoing a
transformation: dairies had been rare, but this was changing.
Between 1842 and 1844 the final five reports were published. These cover all parts of the
country, and give an interesting snapshot of the extent to which modern dairying had spread.
Furthest to the north and west of Jutland in Thisted County mostly steers were kept. South and
east of that in the center of Jutland in Skanderborg County, steer production is described as
being in freefall, with most estates having moved to dairying. Odense County on Funen and
Holbæk County in the north and west of Zealand was dominated by dairying, but peasant
dairying was very poor. Finally, Maribo County, covering the islands of Lolland and Falster to the
south of Zealand, again neighboring the area where the Holstein system was first introduced,
and where Tesdorpf had his estates, was also dominated by dairying, but important inroads had
been made into peasant production, where some peasants had introduced clean dairy parlors,
comparable in quality to the estates.
From the 1850s, Danish agriculture began to go through a radical reorientation towards the
export trade, especially to Britain (Lampe and Sharp 2014b). The almost complete
abandonment of cattle fattening in favor of dairying was however not a foregone conclusion for
16
the whole country even shortly before the first cooperative, as witnessed by two articles in
Tidsskrift for Landøkonomi by R.B.J. Buus (1866) and R. Fenger (1873), discussing the relative
merits of meat production versus dairying.
Just prior to the emergence of the cooperatives, so-called community creameries, allowing for
the centralized production of butter produced using milk from local peasants, were promoted
in the 1860s by merchants and the agricultural societies in order to increase the availability of
quality butter for export (McLaughlin and Sharp 2015). The coops themselves required the
invention of the automatic cream separator in the late 1870s before they were viable, since
peasant producers owned just a few cows, and their milk production could not easily be
transported to a central production facility21. This was not a limitation for separation using
centrifugal force. Thus the cream separator finally allowed peasants to enjoy the benefits of the
hollænderier more than a century after they were introduced to Denmark.
The cooperatives did not enjoy an easy start, however. The first cooperative creameries in
southwestern Jutland were met by great skepticism by the agricultural establishment, and the
chairman of the dairy committee of the United Jutland Agricultural Associations (and member
of the board of the Royal Agricultural Society of Denmark) commissioned M.C. Petersen, from
the agricultural college Ladelundgård, to travel around eighteen of them in order to
demonstrate their inferiority compared to the privately-owned community creameries which
he had previously reported on (Petersen 1885; Henriksen 1999). Although his report reached
the opposite conclusion to that which its commissioners had hoped for, there can be little
doubt that the estates themselves were not promoting the cooperative form as such. In the
next section, we nevertheless demonstrate empirically that they had a trickle-down effect on
the peasantry, consistent with the historical narrative above.
As for the Duchies, where our story began, they became part of the protected German market,
where they did not have to compete with the world and did not develop as fast, although in
many respects they seem to have developed in parallel with Denmark. Innovations came largely
21
Transportation would homogenize the milk, making the traditional method of extracting the cream, i.e. waiting
for it to rise to the surface, extremely slow
17
from or via Denmark – dairy consultants were hired from there, and the first cooperative
creamery was founded in 1884, just two years after the first opened just north of the post-1864
border (see Hansen 1994 for a full account).
4. Persistency and the spread of the cooperatives
We begin by demonstrating that the early distribution of cooperative creameries in Denmark
was heavily influenced by the historical legacy of the hollænderier. We first make use of a list of
all estates in 1770 taken from Roholt (2012)22, combined with a list of the estates with a
hollænderi in 1782 from Andersen (1963). In our initial specification, we simply regress the
distance of each parish from a cooperative on the distance to the nearest hollænderi controlling
for a number of confounders. Table 1 gives some summary statistics for the variables used
below.
Table 1: Summary statistics and description of variables used
Mean
Std. Dev.
Min
Description
Variable
Obs
Distance coop 1890
1620 1.045357 0.811199 -2.89936
3.582494 Log distance from parish centroid to the nearest coop in 1890
Distance coop 1914
1620 0.570055 0.779722 -3.80688
3.096756 Log distance from parish centroid to the nearest coop in 1914
Cow density 1837
1620 9.893263 4.77437
2
41.09589 Number of cows in 1837 per 100 km agricultural land in 1820
0
Distance Hollænderi 1620 2.135581 1.014091 -1.55767
Max
5.164097 Log distance from parish centroid to the nearest Hollænderi in 1782
Distance Sofiendal
1620 4.75234
.8205871 .7513635 5.659065 Log distance from parish centroid to the estate Sofiendal
Distance coast
1620 1.58515
1.099965 -5.24951
Barley suitability
1620 56.97877 20.21157 0
Pop. density 1787
1620 22.1764
Market town
1620 0.012346 0.110457 0
3.797533 Log distance from parish centroid to the nearest coast
Average barley suitability from GAEZ, FAO (2002)
92.5
18.31868 1.487217 348.9533 Parish population density in 1787
=1 if the parish has a market town
1
We use distance to each hollænderi rather than the parishes where they were located for two
reasons. First, if there was a demonstration effect, the hollænderier would have had an impact
beyond the parish itself. Second, within the parish any surviving hollænderier on estates would
22
We cross-checked this with an alternative list of estates for 1770 in Christensen (1886-91).
18
have been competitors to the first cooperatives (see Henriksen 1999). In fact, it is no
coincidence that the first cooperatives, around Hjedding, in South West Jutland, were founded
in an area where there were few hollænderier and just as importantly with no competition from
proprietary operations (see McLaughlin and Sharp 2015).23 Unfortunately we have no way of
knowing which estate creameries survived until 1882/1890, but as noted above, the Royal
Danish Agricultural Society was initially hostile to the peasant cooperatives. The location of the
hollænderier is given in Map 2.
Map 2: Location of Hollænderier in 1782
Source: Andersen (1963), Christensen (1886-91), Roholt (2012).
Table 2 gives our baseline results using OLS. We control for distance to the coast, as a proxy for
market access given that the cooperatives were heavily export oriented. The suitability of the
23
Henriksen 1999 highlights that local agricultural depression after a customs reform in Germany blocked exports
of live cattle was the ultimate driver. The district the first cooperative was in exhibited below average milch cow
densities and milk yields per cow.
19
soil for growing barley24 captures the main alternate use of the land.25 Population density in
1787, taken from the census of that year, is used as a proxy for initial productivity, and finally
we introduce a dummy for whether the parish has a market town, since the cooperatives were
of course mostly a rural phenomenon. Fixed effects are included at the level of the region.
Table 2: OLS, Main results
(1)
Distance Hollænderi
0.118***
(0.020)
[0.034]
Distance coast
(2)
(3)
Dependent variable: Distance coop in 1890
0.072***
0.056**
(0.024)
(0.024)
[0.031]
[0.029]
-0.106***
(0.018)
-0.004***
(0.001)
Barley suitability
(4)
0.053**
(0.024)
[0.029]
-0.115***
(0.019)
-0.004***
(0.001)
Pop. density 1787
-0.005**
(0.002)
Market town
0.607**
(0.275)
Constant
0.794***
(0.047)
0.350
(0.237)
0.860***
(0.263)
0.961***
(0.266)
FE
No
Yes
Yes
Yes
Parishes
1620
1620
1620
1620
F-Stat
35.683
19.525
20.537
16.724
Adj R2
0.021
0.054
0.078
0.080
Standard errors in parentheses, Conley standard errors correcting for spatial autocorrelation within 200 km in
squared brackets. * p < 0.1, ** p < 0.05, *** p < 0.01
All the coefficients have the expected sign, with that on the distance to a hollænderi having the
interpretation that a 1km greater distance from an historical hollænderi implies something
between 0.05 and 0.1km greater distance to a cooperative creamery one century later. In other
24
Measured by present day potential yields of rain-fed barley, from FAOs GAEZ database (2002). As shown by
Andersen et al. (2013) present day potential barley yields correlates strongly with the level of barley tenant
payments under the feudal system in 1662.
25
It might also potentially capture its availability as fodder. Under Koppelwirtschaft dairying and grain production
can be considered to be compliments, but the cooperatives also imported grain and concentrates from overseas.
20
words, cooperatives clustered around the estates where there the Holstein system had been
implemented.
Despite the controls, there might be a concern that omitted variables determine both the
location of hollænderier and the cooperatives. We thus turn to an instrumental variable
identification strategy, where we instrument the location of the hollænderier by the distance to
Moltke’s estate, Sofiendal, where the first hollænderi was established. This is consistent with
our story that the hollænderier spread through Denmark inspired by Moltke (and his
administrator, Völckers) as well as the historical literature cited above. In Table 3 we present
the results of our first stage, controlling for the same variables as before. In the appendix, we
also control for a number of other factors, including the distance to Copenhagen, the market
potential of which, according to Hansen (1984, pp. 41-42) led to the system spreading from
Schleswig-Holstein to Zealand first. Nothing changes the strong correlation between the
location of the hollænderier and Sofiendal.
Table 3: IV first stage, Main results
(1)
Distance Sofiendal
0.380***
(0.029)
(2)
(3)
Dependent variable: Distance Hollænderi
0.795***
0.780***
(0.055)
(0.056)
(4)
0.773***
(0.057)
Distance coast
0.065***
(0.018)
0.058***
(0.019)
Barley suitability
-0.008***
(0.001)
-0.008***
(0.001)
Pop. density 1787
-0.003
(0.002)
Market town
0.284
(0.268)
0.331**
(0.141)
0.925***
(0.352)
1.566***
(0.380)
1.653***
(0.385)
FE
No
Parishes
1620
F-Stat
168.737
Standard errors in parentheses
*
p < 0.1, ** p < 0.05, *** p < 0.01
Yes
1620
233.156
Yes
1620
185.526
Yes
1620
144.530
Constant
21
The second stage, presented in Table 4, gives a similar picture to that in Table 2 above, except
that the coefficient to the distance to a hollænderi is somewhat larger.26
Table 4: IV second stage, Main results
(1)
Distance Hollænderi
0.368***
(0.067)
[0.147]
Distance coast
(2)
(3)
Dependent variable: Distance coop in 1890
0.373***
0.263***
(0.074)
(0.076)
[0.137]
[0.133]
-0.107***
(0.018)
Barley suitability
-0.002
(0.001)
(4)
0.250***
(0.077)
[0.126]
-0.113***
(0.019)
-0.001
(0.001)
Pop. density 1787
-0.004*
(0.002)
Market town
0.496*
(0.282)
Constant
0.261*
(0.145)
-1.177***
(0.434)
-0.363
(0.502)
-0.221
(0.512)
FE
No
Yes
Yes
Yes
Parishes
1620
1620
1620
1620
F-Stat
29.971
21.117
20.622
16.736
First stage F
168.737
205.491
191.508
186.285
Standard errors in parentheses, Conley standard errors correcting for spatial autocorrelation within 200 km in
squared brackets. * p < 0.1, ** p < 0.05, *** p < 0.01
If the hollænderier had a persistent effect for a century before the first cooperatives, we would
expect that this meant a gradual spread of the ideas used on the estates to the wider peasant
population. That this might have happened is not beyond the realms of possibility, considering
the traditional links between the estates and the surrounding peasantry, and our reading of the
county descriptions above. We can quantify this by considering the increase in the number of
milch cows around the country in the intervening period. In 1760 there were 270,000 milch
cows in Denmark, increasing to 335,000 in 1774, and 450,000 in 1810 (Drejer 1962, p. 22,
26
Extra controls are again added in the appendix.
22
Jensen 2007, p. 140). In 1837 we have parish level data from the first (surviving) animal census,
which put the total level at 578,000 in 1837. In 1861, there were 756,834 milch cows in the
animal census. By 1881, the year before the first cooperative creamery was founded, there
were 898,790. If we are to believe the persistency story, the local density of cows should have
remained fairly constant before 1882. In fact, the correlation between the density in 1837 and
1861 and 1881 is around 0.9. It then remains to demonstrate that the location of the
hollænderier also explains the pattern we observe in the cow densities. To do this, we employ
the same empirical strategy as above, but with the cow densities in 1837 as the outcome
variable. Again, the relationship is very strong and robust, see Tables 5 and 6. This result is
consistent with the work of Henriksen (1999), who shows that the share of cows related to a
coop correlated with cow density.
23
Table 5: OLS, Cow density
(1)
Distance Hollænderi
-1.917***
(0.107)
[0.405]
Distance coast
(2)
(3)
Dependent variable: Cow density in 1837
-1.138***
-0.833***
(0.112)
(0.109)
[0.465]
[0.331]
-0.477***
(0.081)
0.059***
(0.005)
Barley suitability
-0.751***
(0.105)
[0.300]
-0.264***
(0.081)
0.051***
(0.005)
0.098***
(0.008)
Pop. density 1787
-11.209***
(1.188)
Market town
Constant
(4)
13.988***
(0.253)
14.678***
(1.112)
9.140***
(1.185)
6.943***
(1.149)
FE
No
Yes
Yes
Yes
Parishes
1620
1620
1620
1620
F-Stat
321.656
216.735
196.888
183.640
Adj R2
0.165
0.400
0.459
0.504
Standard errors in parentheses, Conley standard errors correcting for spatial autocorrelation within 200 km in
squared brackets. * p < 0.1, ** p < 0.05, *** p < 0.01
Table 6: IV second stage, Cow density
(1)
Distance Hollænderi
-7.345***
(0.560)
[1.841]
Distance coast
(2)
(3)
Dependent variable: Cow density in 1837
-2.453***
-2.495***
(0.347)
(0.358)
[1.269]
[1.401]
-0.469***
(0.087)
0.041***
(0.007)
Barley suitability
-2.158***
(0.342)
[1.104]
-0.272***
(0.085)
0.036***
(0.006)
0.091***
(0.009)
Pop. density 1787
-10.415***
(1.262)
Market town
Constant
(4)
25.578***
(1.208)
21.359***
(2.023)
18.963***
(2.367)
15.379***
(2.289)
FE
No
Yes
Yes
Yes
Parishes
1620
1620
1620
1620
F-Stat
171.914
190.658
171.883
164.453
First stage F
168.737
205.491
191.508
186.285
Standard errors in parentheses, Conley standard errors correcting for spatial autocorrelation within 200 km in
squared brackets. * p < 0.1, ** p < 0.05, *** p < 0.01
24
We have thus demonstrated that there was a persistent effect of the hollænderier on the initial
distribution of cooperatives within the first decade of their foundation. How persistent is this
after the initial expansion? To investigate this, we turn to the year 1914 and repeat the above
analysis. By 1914 the country was even more densely covered with cooperative creameries: see
Map 3.
Map 3: Location of Cooperative Creameries in 1914
Source: Bjørn (1988).
Should we expect that the location of the cooperatives in the early twentieth century was still
determined by the hollænderier of the eighteenth century? Our initial expectation is in fact that
this should no more be the case than if we were to look at the handful of cooperative
25
creameries which still exist in Denmark today 27. Persistence has its limits. Although the
trickledown of knowledge from the hollænderi might have allowed the initial cooperatives to
spread incredibly rapidly between 1882 and 1890, in 1914, 25 years later, there can have been
few farmers in Denmark who had not heard of the new and hugely profitable export
opportunity. Indeed, after 1890 the establishment actively supported cooperation, rather than
opposing it. Thus, as Tables 7 and 8 below demonstrate, the correlation has all but disappeared
by 1914.
27
Dairying in Denmark is today dominated by the giant Danish-Swedish cooperative Arla Foods. The Danish Dairy
Association lists just 33 members, including Arla, many of which are not producing butter. Just six of these,
including Arla, describe themselves as cooperatives (www.mejeri.dk, retrieved 12-06-2015).
26
Table 7: OLS, Coops 1914
(1)
Distance Hollænderi
0.022
(0.019)
(2)
(3)
Dependent variable: Distance coop in 1914
-0.012
-0.031
(0.023)
(0.024)
(4)
-0.032
(0.024)
Distance coast
-0.048***
(0.018)
-0.051***
(0.018)
Barley suitability
-0.004***
(0.001)
-0.004***
(0.001)
Pop. density 1787
-0.001
(0.002)
Market town
-0.007
(0.271)
Constant
0.524***
(0.045)
FE
Parishes
F-Stat
Adj R2
Standard errors in parentheses
*
p < 0.1, ** p < 0.05, *** p < 0.01
No
1620
1.297
0.000
0.367
(0.232)
0.850***
(0.259)
0.864***
(0.262)
Yes
1620
8.097
0.021
Yes
1620
8.760
0.032
Yes
1620
6.830
0.031
Table 8: IV second stage, Coops 1914
(1)
Distance Hollænderi
-0.020
(0.062)
(2)
(3)
Dependent variable: Distance Coop in 1914
0.122*
0.048
(0.070)
(0.073)
(4)
0.048
(0.074)
Distance coast
-0.049***
(0.018)
-0.050***
(0.018)
Barley suitability
-0.003**
(0.001)
-0.003**
(0.001)
Pop. density 1787
-0.000
(0.002)
Market town
-0.052
(0.274)
Constant
0.613***
(0.134)
-0.312
(0.409)
0.382
(0.485)
0.387
(0.497)
FE
Parishes
F-Stat
First stage F
Standard errors in parentheses
*
p < 0.1, ** p < 0.05, *** p < 0.01
No
1620
0.105
168.737
Yes
1620
8.486
205.491
Yes
1620
8.518
191.508
Yes
1620
6.636
186.285
27
So, persistency gave the initial distribution, but once the idea and the knowledge of
comparative advantage was established, this did not matter anymore. This is an optimistic
conclusion, in the sense that the persistency we describe here did not permanently leave its
mark on the country. On a less optimistic note, however, it should also be remembered that the
process as a whole took well over a century. The institutions, technology, schools, etc. did not
appear overnight, or within the first decade of cooperation. Farmers would not have known
that their comparative advantage lay in dairying in the 1880s, and they would not even have
had the cow densities for this to be the case, if the hollænderier had never existed. This has
implications for understanding the reason why the attempt to transfer Danish-style
cooperatives to other countries, such as Ireland in the 1890s (see e.g. Henriksen et al 2015) and
Iceland around the turn of the twentieth century (Jónsson 2012), as well as to developing
countries more recently were relative failures.
5. Conclusion
We demonstrate that the reason for the extremely rapid spread of cooperative creameries in
Denmark between 1882 and 1890 can be attributed to the spread of innovations from
Schleswig-Holstein over the preceding century. Certain estates established centralized dairy
facilities, the hollænderier, with unprecedented standards of hygiene and equipment.
Subsequent scientific debate led to further advances, including accurate bookkeeping, better
breeds of cows, and better feed. Agricultural societies, schools, and journals were established.
More generally, it became firmly established that Denmark’s comparative advantage lay in
dairying, and butter production in particular.
We describe based on the contemporary literature how these innovations spread throughout
the country, and trickled-down to farmers beyond the large estates. We demonstrate
empirically that areas with more hollænderier developed greater cow densities, implying the
spread of dairying around the country, and that the initial wave of cooperation was in areas
which had been so treated. The cooperatives thus benefited from the accumulation of
knowledge over more than a century, with the only innovation needed in order for the
28
peasants to benefit being the invention of the automatic cream separator, which allowed for
the centralized separation of milk from small peasant herds. After this, the whole country was
rapidly overrun by the cooperative wave, and their historical forerunners, the hollænderier,
were all but forgotten. This work establishes their rightful place as the starting point of the
Danish agricultural revolution, which was to change Denmark forever.
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Appendix
This appendix gives a number of robustness checks for the empirical analyses presented in
Tables 3 and 4 above. Table A1 gives a description of the extra variables used.
Table A1: Descriptive statistics
Distance estate
1620
1.028311
0.853661
-3.13044
5.115489
Distance Copenhagen
1620
4.945996
0.668783
1.030563
5.687389
Log distance from parish centroid to the nearest estate in
1770
Log distance from parish centroid to Copenhagen
Distance first coop
1620
4.802154
0.592779
1.102737
6.036978
Log distance from parish centroid to the first coop (Hjedding)
Distance Tønning
1620
5.389134
0.264654
4.744595
6.009573
Field-grass-system share
1620
0.450373
0.481684
0
1
Log distance from parish centroid to the city of Tønning
(exports)
Share of parish using field-grass-system in 1682
Clover share
1620
0.228403
0.357015
0
1
Share of parish with clover cultivation in 1805
Demesne share
1620
0.129512
0.194275
0
0.975768
Share of parish with estate demesnes
Sources: Distance estate, Distance Copenhagen, Distance first coop, Distance Tønning: all own calculations. Fieldgrass-system: Frandsen (1983), Clover share: Kjærgaard (1994), Demesne share: Dam (2004) and own calculations.
Distance to all estates (i.e. also those without hollænderier) is included, in order to demonstrate
that it was not estates in general which had the effect. Distance to Copenhagen and distance to
Tønning are further controls for market access. The latter was a major harbor for live cattle
export in the Duchy of Schleswig, situated where the Eider River, which separates Schleswig
from Holstein, flows into the North Sea. The share of the parish using the field-grass-system in
1682 accounts for the pre-Koppelwirtschaft extent of dairying. The share of the parish used for
clover cultivation in 1805 (Kjærgaard 1994, pp. 77-81) is an alternative measure of the extent of
Koppelwirtschaft as well as a source of fodder for cows. The proportion of the parish which was
covered by demesne is a proxy for the inequality of landholdings.
Finally, distance to the first cooperative in Hjedding is included in case, contrary to our
expectations, the location of the cooperatives was determined by a spread of ideas from the
first cooperatives in South West Jutland. On this note, it should be noted that dairy
cooperatives were not a Danish innovation. The first cooperative creamery in Sweden was
founded in 1880 and they had even older predecessors in Norway, where the earliest was
37
founded in 1857 (Espeli et al 2006, p. 21). Tables A2 and A3 repeat the analyses in Tables 3 and
4 with the extra controls.
Table A2: IV first stage, Further controls
(1)
(2)
Distance Sofiendal
0.773***
(0.057)
Distance coast
(3)
(8)
(9)
0.714***
(0.055)
(4)
(5)
(6)
(7)
Dependent variable: Distance Hollænderi
0.705***
0.790***
0.646***
0.748***
0.774***
(0.057)
(0.055)
(0.056)
(0.059)
(0.057)
0.762***
(0.056)
0.471***
(0.058)
0.058***
(0.019)
0.049***
(0.018)
0.065***
(0.019)
0.088***
(0.019)
0.083***
(0.018)
0.054***
(0.019)
0.058***
(0.019)
0.051***
(0.019)
0.106***
(0.018)
Barley suitability
-0.008***
(0.001)
-0.007***
(0.001)
-0.009***
(0.001)
-0.009***
(0.001)
-0.008***
(0.001)
-0.008***
(0.001)
-0.008***
(0.001)
-0.008***
(0.001)
-0.009***
(0.001)
Pop. density 1787
-0.003
(0.002)
-0.002
(0.002)
-0.001
(0.002)
-0.004**
(0.002)
-0.003*
(0.002)
-0.002
(0.002)
-0.003
(0.002)
-0.003*
(0.002)
-0.000
(0.002)
Market town
0.284
(0.268)
0.288
(0.259)
0.132
(0.267)
0.548**
(0.263)
0.453*
(0.260)
0.214
(0.271)
0.283
(0.268)
0.360
(0.266)
0.267
(0.247)
0.250***
(0.025)
Distance estate
0.350***
(0.029)
0.352***
(0.064)
Distance Copenhagen
0.633***
(0.062)
0.371***
(0.042)
Distance first coop
0.118*
(0.069)
0.982***
(0.095)
Distance Tønning
Field-grass-system share
1.103***
(0.162)
0.112
(0.069)
Clover share
-0.069
(0.069)
0.171**
(0.077)
0.007
(0.084)
Demesne share
-0.448***
(0.097)
0.214**
(0.109)
1.653***
(0.385)
0.623
(0.387)
0.252
(0.459)
-0.587
(0.453)
-3.598***
(0.631)
1.743***
(0.389)
1.648***
(0.389)
1.711***
(0.383)
-9.112***
(0.797)
FE
Yes
Parishes
1620
F-Stat
144.530
Standard errors in parentheses
*
**
***
p < 0.1, p < 0.05, p < 0.01
Yes
1620
148.675
Yes
1620
135.442
Yes
1620
144.128
Yes
1620
149.189
Yes
1620
130.470
Yes
1620
129.998
Yes
1620
133.834
Yes
1620
124.717
Constant
38
Table A3: IV second stage, Further controls
(1)
(2)
Distance Hollænderi
0.250***
(0.077)
Distance coast
(3)
(8)
(9)
0.277***
(0.084)
(4)
(5)
(6)
(7)
Dependent variable: Distance coop in 1890
0.382***
0.256***
0.169*
0.180**
0.253***
(0.087)
(0.075)
(0.092)
(0.081)
(0.078)
0.260***
(0.078)
0.308**
(0.140)
-0.113***
(0.019)
-0.112***
(0.019)
-0.132***
(0.019)
-0.105***
(0.019)
-0.097***
(0.019)
-0.117***
(0.019)
-0.113***
(0.019)
-0.109***
(0.019)
-0.135***
(0.022)
Barley suitability
-0.001
(0.001)
-0.002
(0.001)
0.001
(0.002)
-0.002
(0.001)
-0.002
(0.001)
-0.001
(0.001)
-0.001
(0.001)
-0.002
(0.001)
0.002
(0.002)
Pop. density 1787
-0.004*
(0.002)
-0.004*
(0.002)
-0.006***
(0.002)
-0.004**
(0.002)
-0.004**
(0.002)
-0.003
(0.002)
-0.004*
(0.002)
-0.003*
(0.002)
-0.004**
(0.002)
Market town
0.496*
(0.282)
0.486*
(0.283)
0.689**
(0.287)
0.570**
(0.288)
0.601**
(0.282)
0.365
(0.280)
0.491*
(0.283)
0.439
(0.284)
0.480*
(0.285)
-0.091**
(0.036)
Distance estate
-0.085
(0.062)
-0.534***
(0.081)
Distance Copenhagen
-0.618***
(0.124)
0.107**
(0.052)
Distance first coop
-0.065
(0.076)
0.481***
(0.150)
Distance Tønning
0.167
(0.279)
0.240***
(0.074)
Field-grass-system share
Clover share
0.343***
(0.078)
0.021
(0.088)
Demesne share
0.030
(0.089)
0.315***
(0.109)
0.165
(0.128)
-0.221
(0.512)
0.107
(0.459)
1.688***
(0.504)
-0.879*
(0.455)
-2.657***
(0.651)
0.086
(0.523)
-0.240
(0.518)
-0.279
(0.518)
2.230
(1.555)
FE
Yes
Parishes
1620
F-Stat
16.736
First stage F
186.285
Standard errors in parentheses
*
p < 0.1, ** p < 0.05, *** p < 0.01
Yes
1620
15.049
167.036
Yes
1620
17.976
150.718
Yes
1620
17.080
203.656
Yes
1620
19.759
131.890
Yes
1620
16.838
162.503
Yes
1620
15.042
181.303
Yes
1620
15.456
183.018
Yes
1620
15.190
66.258
Constant
39