IEHC 2006 Helsinki Session 60
Agriculture and economic growth in Greece
Socrates D. Petmezas (University of Crete)
Introduction
In this paper we shall study the development of the agricultural economy of Greece
and its contribution to the growth of the national income from the 1860ies to the 1960ies,
when the country’s economy finally entered into the stage of rapid industrialisation and its
structure was transformed with the decisive decline of the share of agriculture and the
massive population displacement away from the countryside and/or the agricultural sector.
The data used are mostly originating from the Statistical Abstracts, the Population and
Agricultural Censuses and Statistics of the Greek National Statistical Service. Ottoman data
have been used concurrently1. We will begin by examining the long term development of
production and productivity of Greek agriculture, in correspondence with the evolution of
other fundamental macro aggregates. In a second part we are going to give a interpretation
of this process, presenting the evidence for a detailed periodisation of the demo-economic
history of Greek agriculture.
One fundamental point should be raised right from the beginning. There is a hiatus
between the history of the Greek agriculture in the long 19th century (1860ies-1912), and its
history during the long interwar period (1912-1950ies). It is very difficult to compare the
pre-1912 and the post-1912 development because in between there are critical
transformations. The kingdom of Greece, one of the oldest Nation-States in Europe, has
undergone a radical transformation during the long War decade (1912-1922) which in
South-eastern Europe coincided with the 1st World War. To begin with, its area and
population has doubled and the ethnic composition of the newly annexed northern
provinces (hereafter called the “New Provinces”) was almost homogenised or “Hellenised”
through the obligatory or voluntary massive population exchange between Greece, Turkey
and Bulgaria. One must add that the older state nucleus (to which one must include the
Ionian islands annexed in 1865), the so-called “Old Greece”, was typically Mediterranean in
terms of climate and landscape, its rural social structure was dominated by small-owner
agriculture and its exports were mostly products of labour intensive arboriculture (currants,
wine, olive-oil and cocoons) while its imports were largely products of land-intensive
agriculture (wheat, pulses etc.). The so-called “New provinces” were relatively different in
terms of climate and landscape and fundamentally distinct in terms of land tenure and land
use (See Table 4). Their agriculture were characterised by the thinly populated and
unhealthy large marshy plains, un-drained and flooded by ill-managed rivers. Large estates
1
The Greek authorities began to collect data on Population since 1839. Population censuses, of relatively
good quality, had been completed in the following years: 1861, 1870, 1879, 1889, 1896, 1907, 1920,
1928 and 1940, followed by higher quality post-war population censuses conducted once every 10
years, since 1951. When new provinces were annexed (Ionian Republic in 1865, Thessaly and the
province of Arta in 1881, Crete and the New provinces in 1913, Thrace in 1920, Dodecanese in
1947) regional censuses have been ordered. Agricultural censuses have been conducted in 1860,
1875, 1887, 1911, 1929, 1939, 1950 and then, since 1961, once every ten years. Some of them (1875,
1887, 1939) had not been fully published. Their quality ameliorated as time passed, and yet even the
first such census (1860) is relatively safe to use, if the necessary precautions are taken. The first
ottoman agricultural census of 1908/1911 is also useful for the Greek provinces which were still
under Ottoman rule in the beginning of the century. Greek agricultural statistics have been kept
yearly from 1914 until 1938, and then, again, since 1955. Additional data were provided by the
Statistical Yearbook (published since 1930). This mass of information is collected in a large
electronic Data Base System in the Institute for Mediterranean Studies of the Foundation for
Research and Technology in Rethymnon, Crete.
Paper for the August 2006 Helsinki Congress
using sharecropping labour were the dominant form of land use in the lowlands. The
empty large marshy plains were ideal for the semi-nomadic pastoralists, who were
combining their mountainous summer pastures in the surrounding mountains where they
lived, with the large and rich winter pastures they rented from large landowners.
Agriculture and animal husbandry were thus structurally “combined” through the
symbiosis of large estate sharecropping agriculture with long-distance semi-nomadic animal
husbandry. Tobacco, largely cultivated by small-owners on the hills and mountain slopes in
eastern Macedonia and Thrace, was since the last decades of the 19th century, the
predominant and growing export product of Northern Greece, largely outnumbering the
traditional cereal exports of large estates, which suffocated from international competition.
It is useful to add that, in 1881, Thessaly and the province of Arta, with an agricultural
structure comparable to that of the New Provinces, have been annexed to the Greek
Kingdom but, as a result of political and social compromises, escaped from land reform
and conserved their social structure and productive profile, so different from that of the
other provinces of Old Greece. A bitter ‘agrarian question’ emerged and poisoned the
political life until the War decade. For all practical reasons we can treat Thessaly and the
province of Arta, after 1881, in the same way as the Northern New Provinces, still under the
Ottomans.
One second fundamental cleavage between the pre- and the post-1912 history
concerns the radical policy shift. In the 19th century the Greek state has taken upon itself,
as its mission, the structural modernisation of Greek society and administration and the
redemption of all irredentist populations living mainly under ottoman rule. This entailed
the build of a relatively large, yet inefficient, administration and a more or less active policy
of nationalist expansion that ultimately put an excessive burden upon the Greek economy
and undermined its financial stability. Public investment in ameliorating the urban
infrastructure and the transport and communication system was very poor until the last two
decades of the 19th century and a large part of the foreign debt contracted at that time was
deviated to and uselessly spent in military oriented objectives. The long War decade of
1912-1922 and its results (death, destruction and massive forced population relocations)
was the natural outcome of national antagonisms and imperialist intervention in the
Eastern Mediterranean periphery of the European continent. In the interwar period, in an
era of introverted policies worldwide, the policy priorities of the Greek state have shifted
from an irredentist perspective to an effort of socio-economic modernisation and internal
homogenisation, in order to socially and politically absorb the New Provinces, through land
reform, the settlement of the large incoming refugee population surplus in town and
country and a policy of economic autarchy and internal marker integration. Ultimately the
successive governments were striving the raise the institutional and ecological barriers to the
development of agriculture. The liberal and pragmatic economic policy of the 19th century
was abandoned in favour of a growing interventionist policy that culminated in the end of
the 1930ies and was discontinued only in the late 1950ies, when the Greek government
turned its attention towards a new long-term priority: the integration into the Common
European Market. In this new era the state intervention in agricultural markets continued,
but Greek agriculture underwent its most profound demo-economic transformation, while
the economy at large re-integrated into the world markets.
2
Table 1 The expansion of the Modern Greek State (1832-1947).
1832
1864
1881
1897
1913
Area in
Km2
47.516
50.211
63.606
63.212
120.887
1919 150.176
1923 129.281
1947 131.944
Peloponnese, Continental Greece, Cyclades
Ionian Islands
Thessaly and the province of Arta
Small loss of territory, no population losses
Macedonia, Epirus, Crete, Samos & Northern
Aegean Islands
Thrace (Eastern and Western)
Eastern Thrace, islands of Imbros & Tenedos
ceded to the Turkish Republic
Dodecanese Islands
Population general population
(.000)
density (inh/km2)
753
15,85
1.365
27,19
2.072
32,58
2.466
39,01
4.775
39,50
5.536
5.802
36,86
44,88
7.563
57,32
It is very important to stress that these three different eras in the long march of
Greek agriculture towards modernisation and growth coincide, and are structurally
connected, with large-scale transformations in the demographic structure (the so-called
demographic transition), major shifts in the world division of labour and, finally, regime shifts
in the economic policy of the state. These shifts are not simply results of political and
diplomatic events, but are largely dominated by major demo-economic crises and
transformations. The two transitional periods between the three eras of Greek agriculture
coincide with major demographic mutations and economic crises. The first transitional
period from the 19th century export led agricultural economy of Old Greece to the larger
introverted autarkic interwar agriculture coincides with a harsh financial and agricultural
crisis (ca.1892-1908) and the great transatlantic migration movement (ca.1900-1924), while
the second transitional period towards a modernised and intensively growing agriculture
coincides with a major agricultural income crisis (especially in the densely populated
mountainous and hilly countryside), followed by rural depopulation and massive emigration
towards Western Europe, Canada and Australia (ca.1955-1972).
A long term view of agricultural production and productivity
In the 19th century the Kingdom of Greece was a predominantly agricultural
economy that has been capable of feeding its rapidly rising population (1,5% yearly until
1900) in spite of the rapidly deteriorating land to labour ratio (see Table 2). One should
add that it is only thanks to its surplus international trade in agricultural and livestock products that
Greece was able to “feed its population”, since a very large part of its provisions in
subsistence goods was imported. In the 19th and 20th century, Greek agriculture has able to
sustain a net trade surplus which is a major achievement if we take into consideration that
the trade balance of the country was constantly in deficit and that Greece had always ran a
deficit of wheat and other cereals. These land-intensive food imports were largely
outnumbered in value from the few labour intensive Greek agricultural exports. This was a
long-term phenomenon and it is only immediately after the country’s integration into the
European Common Market, while Greek agriculture was continuing to ameliorate its
productivity, that the country became chronically a net importer of agricultural products
(ATE 1985, 56-57).
3
Table 2 The long term development of Greek agriculture (1860-1981), the increase is
estimated in annual compound rates.
Year and year
range
% of GDP
Rural
population
(<2000 inh.)
General
population
density
1845
1860
1875
1887
1900
1911
1930
1938
1950
1961
1971
1981
1860/1887
1887/1911
1860/1911
1911/1930
1911/1938
1911/1961
1961/1971
1950/1981
83,97%
79,20%
73,91%
66,00%
59,06%
58,98%
49,57%
55,41%
26,43%
23,87%
17,24%
17,10%
-0,68%
-0,47%
-0,58%
-0,91%
-0,23%
-1,81%
-3,26%
-1,40%
76,24%
74,94%
73,82%
70,56%
68,37%
66,25%
57,10%
55,51%
50,13%
43,80%
35,14%
30,34%
-0,22%
-0,26%
-0,24%
-0,78%
-0,65%
-0,83%
-2,20%
-1,62%
20,21
22,94
31,41
33,64
39,90
42,74
49,25
55,09
57,85
63,58
66,46
73,82
1,42%
1,00%
1,22%
0,75%
0,94%
0,79%
0,44%
0,79%
agricultural
density (to
land in
use)
agricultural
production
(SWU per
capita)
livestock
density
(LU per
km2)
Ratio of
land to
labour (ha
per
AMLU)
Return (†) to
labour (SWU
per estimated
AMLU)
Return (†)
to land in
use (SWU
per ha)
96,42
117,52
122,58
7,32
7,32
9,96
19,13
17,57
18,18
32,28
26,74
25,84
30,41
31,17
44,72
0,94
1,17
1,73
126,99
147,89
115,61
130,72
100,04
78,83
74,81
0,89%
0,15%
0,54%
0,80%
-0,35%
-0,48%
-2,38%
-1,80%
8,20
6,00
7,89
5,46
9,43
12,78
16,29
1,14%
-0,81%
0,22%
-1,65%
-0,14%
0,28%
3,04%
3,53%
18,29
27,62
30,29
12,04
22,99
20,78
20,06
-0,19%
0,03%
-0,09%
2,17%
1,87%
0,46%
-1,01%
1,64%
24,79
19,78
25,78
21,44
29,24
35,57
37,14
-0,82%
-0,17%
-0,52%
-1,19%
0,14%
0,33%
1,96%
1,77%
38,97
30,72
42,35
30,54
62,94
101,95
149,196
1,43%
-0,57%
0,49%
-1,25%
0,31%
0,96%
4,82%
5,12%
1,57
1,55
1,64
1,42
2,15
2,87
4,02
2,25%
-0,40%
1,00%
-0,06%
0,16%
0,63%
2,86%
3,35%
(†) refers to the net production of land and livestock.
To examine the productive capacity of Greek agriculture, irrespective of changes in
the size of the country and of its population, we used the per capita production expressed
in terms of a physical unit, the SWU (Standard Wheat-equivalent Units)2. Thus, we can
show that the per capita net agricultural production (non alimentary products included) has
grown to reach a maximum of almost 10 SWU per capita in circa 1887 (see Table 2). This
is actually a measure of the growing capacity of Greek agriculture to feed the country’s
population. According to geographers and developmental economists (CLARK & HASWELL
1967) such a per capita aggregate volume usually enables a society to fully feed men and
domestic animals in its territory. It is of interest to notice that only in the 1960ies the Greek
agriculture has been able to exceed this level. At the same moment all the other indexes of
production and productivity show a clear increase. It is obvious that only in the 1960ies the
return to land and labour have shown a substantial and significant rise indicating a
quantitative change in capital investment in agriculture and in agricultural labour
productivity3.
2
A SWU (Standard Wheat-equivalent Unit) expresses the equivalent in calories of one metric quintal (100 kg)
of wheat and it is mainly in use by geographers who do not wish to take in consideration the
medium term relative price changes of the various agricultural products, cf. KOSTROWICKI &
SZYRMER (1990). Colin CLARK and Marc HASWELL (1967) have used a similar method. Livestock is
homogenised using the LU (Livestock Unit), an abstraction which is supposed to produce the
calorific equivalent of the average yearly gross production of an ox.
3
The return to the (estimated available) “rural” labour is not an index of labour productivity, which should
ideally be relative to the number of really and fully employed agriculturalists. Since we know neither
the percentage of (fully or part-time) unemployment in agriculture nor the number of agriculturalists
4
Table 3 The use of land in Greece (1860-1950)4
1860
Land in use (.000 ha)
Annual cultures (.000 ha)
Vineyards (.000 ha)
Wheat (% annual cult.)
Maize (% annual cult.)
Barley (% annual cult.)
Cereal (% annual cult.)
Fallow (% annual cult.)
Tobacco (% annual cult.)
Cotton (% annual cult.)
Annual cult. (% land in use)
LU (.000)
847
711
65
26,84%
10,50%
7,43%
46,88%
51,53%
0,53%
0,43%
83,95%
908,9
1875
991
772
126
28,22%
8,00%
8,79%
46,41%
46,27%
0,54%
1,42%
77,96%
882,1
1887
1.232
940
170
32,05%
7,70%
8,82%
50,33%
42,93%
0,62%
0,71%
76,30%
1.156,3
1911
1.409
1.140
168
30,82%
9,69%
6,94%
50,55%
37,85%
1,36%
0,79%
80,86%
1.156,3
1929
2.459
2.121
183
24,99%
9,24%
6,81%
49,32%
36,70%
4,76%
0,95%
86,29%
2.441,3
1938/9
3.332
2.776
257
33,16%
9,99%
7,04%
57,65%
24,10%
3,03%
2,46%
83,34%
3.916,0
1950
3.080
2.549
196
31,18%
7,78%
5,35%
50,55%
30,00%
3,17%
2,53%
82,77%
(†) all arable land and fallow, artificial prairies etc.
A clear agricultural growth wave (in production and productivity) rising until the
last decade of the 19th century (1860-1887) was followed by stagnation or regression in the
turn of the century (1887-1911) until the early Interwar period (1911-1930). The late
1930ies seem, on the contrary, as a new and promising period of growth, which broke down
in the long war decade of 1940-1949. The newly annexed Macedonian provinces were the
most developed areas of Ottoman Europe. Yet, if we trust our estimates using Greek and
Ottoman censuses, it seems that, in spite of high land returns, the labour productivity was
(maybe 30%) lower than that of Southern Greece (PETMEZAS forthcoming). The Greek
labour productivity (returns to the available labour) was estimated, in circa 1910, to be half
of the average Italian and a quarter of the British equivalent, while the land productivity
(returns to the available land) was 20% lower than the British and Italian level (PETMEZAS
2000, 334). Compared with Spain and France, the labour productivity in Greece was maybe
20% lower than the Spanish and just one fifth of the French level (SIMPSON & CARMONA
2003, 29). By annexing Macedonia, Epirus and, later, Thrace, the Greek economy
incorporated less developed and more sparsely populated areas, which necessitated large
capital inflows in order to materialize their productive potentialities.
During the Interwar period the relative weight of agriculture in the GDP followed a
peculiar trajectory: it rapidly declined in the 1920ies and grew in the 1930ies (see Table 7).
This was not the result of a structural des-industrialization but simply the incidental and
short-term decrease of the value of agricultural output in the 1920ies. The growth of the
percentage of the primary sector in the GDP in the 1930ies reflected both the rapid growth
of the land returns and the expansion of the land in use, due to the normalization of land
settlement, once the land reform and the settlement of refugees in the countryside were
almost completed, and the relative squeeze of the tertiary sector in a period of introversion
in national economic policies (MAZOWER 1991). Growth in the 1930ies was simply due to
the rapid materialization of latent potentialities which were temporarily withheld in the
turbulent 1920ies. The long interwar period (ca.1912-1954), then stands out as a period of
in the total population, the available number of those potentially employed (homogenised through
the use of various coefficients, by sex and age, of equivalence to the full daily force of an AMLU,
active male labour unit) who live in agglomerations of less than 2.000 inhabitants is only a poor
substitute. It is nevertheless the best possible estimate and it shows the general tendency in the
variation of labour productivity. It has been introduced by PEPELASIS and YOTOPOULOS (1962) in
their research on latent unemployment in Greek agriculture in the 1950ies and 1960ies.
4
See PETMEZAS (2006, 116)
5
relative agricultural stagnation and inertia. The total factor productivity in 1911-1950
regresses, mainly as a result of the two war decades 1911-30 and 1940-50 (see Table 5). We
must underline that the autarchic agricultural economy had lost its dynamic and was
heading to a standstill just before the 2nd World War. It is only well after the end of the
Second World War that the institutional and ecological impediments to agricultural growth
were broken by land reform, state intervention and public investment in land reclaim and
irrigation.
Table 4 The use of land in selected regions (1929-1950)
Land in use (.000 ha)
Annual cultures (.000 ha)
Vineyards (.000 ha)
Wheat (% annual cult.)
Cereal (% annual cult.)
Fallow (% annual cult.)
Tobacco (% annual cult.)
Cotton (% annual cult.)
Annual cult. (% land in use)
LU (.000)
1929
979,4
750,8
228,6
28,7%
43,8%
43,3%
2,4%
1,8%
76,7%
826,4
Old Greece
1938/9
1950
1.155,4 1.152,4
967,2
887,3
188,3
265,1
35,7%
34,6%
55,1%
50,8%
24,6%
30,8%
1,8%
2,1%
3,6%
3,5%
83,7%
77,0%
1.275,5
778,6
Thessaly & Arta
1929
1938/9
1950
369,1
426,3
421,6
358,0
413,4
392,0
7,0
13,0
5,8
28,7%
34,8%
33,5%
53,1%
57,6%
52,5%
37,7%
24,6%
31,8%
1,7%
1,6%
1,1%
0,1%
2,5%
1,1%
97,0%
97,0%
93,0%
337,4
485,0
299,5
Macedonia & Thrace
1929
1938/9
1950
736,8 1.158,2
990,2
722,3 1.132,9
932,2
12,9
22,0
25,1
23,0%
33,0%
30,8%
56,2%
59,2%
51,8%
25,4%
24,6%
29,1%
9,5%
4,8%
5,9%
0,8%
1,9%
2,9%
98,0%
97,8%
94,1%
888,8 1.454,8
857,9
Greece was not alone in this agricultural deadlock in late 1930ies. Doreen
WARRINER (1964) in a path breaking study, just before the 2nd World War, had correctly
stressed the agricultural stagnation and productivity deadlock of the Eastern and Southern
European periphery. The demographically saturated agrarian sector was unable to feed the
population and produce the necessary surplus to finance the industrial development or/and
its technological renovation and structural reshaping that would help the surplus rural
population to find productive employment in the secondary sector while at the same time
continue feeding the country. Many economists had almost reached the conclusion that
there was a natural threshold of demographic saturation in the peripheral European
agricultures (MOORE 1945), an idea to which WARRINER (1964, xxxii-xxxiii) was right to be
very critical of.
Constant and substantial growth occurred after 1954 and became really impressive
in the late 1960ies and early 1970ies, which was – not surprisingly – a period of massive
out-migration (a process that reduces, of course, the number of those partially
unemployed) and of timorous yet real transformation of the land tenure system (MOYSIDIS
1986, 73 sq. and Table 9) and the land settlement pattern (BURGEL 1977/8, 1981).
Through the massive introduction of machines and mechanical equipment, the widespread
use of chemical fertilisers and pesticides and, finally, the adoption of scientifically selected
seeds and breeding races — not always using the best techniques or under the scrutiny of
specialised agronomist — in the 1950ies and 1960ies, the Greek agriculture underwent the
last two of the three modern agricultural revolutions (BAIROCH 1989; MAZOYER & ROUDART
1997). The result was the impressive and unprecedented increase in land and labour
productivity (see Table 2). Of course the evacuation of the demographic surplus of the
mountainous areas had a significant influence in the amelioration of the land to labour ratio
and the rise of the capital to labour ratio. Every active labour unit in agriculture had almost
twice as much land in 1981 as it had in 1961 (ATE 1985, 106). The growth of productivity
in Greek agriculture is clearly evidenced (see Table 2 and Table 5) and so is the growth of
overall production until the early 1980ies.
6
Table 5 Total factor productivity of Greek Agriculture.5
1860/75 a
1875/87 a
1887/11 a
1911/30
1930/39
1939/50
1950/61
1961/71
1971/81
1860/1911
1911/1939
1911/50
1950/81
∆(O)
2,46%
5,11%
0,16%
2,45%
6,30%
-2,49%
5,82%
3,49%
3,48%
2,00%
3,45%
1,49%
4,31%
∆(K)
-0,03%
0,34%
0,00%
0,48%
0,67%
0,02%
0,83%
0,60%
0,41%
0,07%
0,53%
0,26%
0,62%
∆(L)
1,27%
1,33%
0,18%
1,87%
0,90%
-0,06%
-0,17%
-0,79%
-0,15%
0,77%
1,62%
1,10%
-0,36%
∆(A)
0,78%
0,76%
0,24%
0,97%
1,52%
-0,23%
0,56%
0,22%
0,04%
0,52%
1,12%
0,70%
0,28%
T.F.P.
T.F.P./∆(Ο)
0,45%
0,18
2,68%
0,52
-0,26%
-1,65
-0,87%
-0,36
3,20%
0,51
-2,22%
0,89
4,59%
0,79
3,46%
0,99
3,18%
0,91
0,64%
0,32
0,19%
0,05
-0,58%
-0,39
3,77%
0,87
(a) In 1860-1911, the land amelioration estimates are incorporated into the land factor (A). The capital is
considered equal to the number of livestock.
The growth of agriculture must necessarily be linked to the growth of GDP and
National Income, and must also be associated to the structural change in the Greek
economy. The Greek per capita GDP grow fast enough to keep a steady distance from the
most advanced economies in the world and thus it did succeed at least to maintain its
position in the world division of labour (KOSTELENOS, PETMEZAS & als. forthcoming).
The structure of the Greek economy changed slowly from a predominantly agricultural
economy in the middle of the 19th centuryto an economy with a large agricultural sector
and growing industrial and service sectors in the beginning of the 20th century. The
agricultural sector’s % share shrunk faster (0,58 % annually between 1860 and 1911) than
the percentage of “rural” population (0,24%) (see Table 2). This means, of course, that the
agricultural productivity of labour was growing at a slower rate that the non-agricultural
productivity of labour all along the 19th century. In spite of this, Greece has not really
experienced a structural change of its productive structure or its land settlement until the post-war
period. In ca.1912 two out of every three Greeks still lived in the countryside and agriculture
contributed more than half of the GDP growth. It is only in the postwar period that the
rural population was less than half of the total and that the non-agricultural sectors
exceeded 70% of the contribution to the growth of Greek GDP.
The currant economy: involutive expansion.
In the 1830, the small, powerless and underdeveloped Greek Kingdom the socalled “Old Greece”, had a very low population density, which meant that a large part of its
arable lands was left uncultivated. The land to labour ratio was generally high and this
explains the long rotations (with one or even locally two acres left fallow for every acre
sown) and the relatively high cereal yields, in spite of the rudimentary agricultural equipment
and extensive cultivation techniques. Greek population grew fast and in the 1860ies the
land in use (e.g. land sown, planted and left fallow) had almost reached its ecological limits, given
the nature of agricultural systems and techniques. In the 1870ies and 1880ies all agricultural
growth was due to the expansion of commercial plantations (PETMEZAS 2003, 131-133).
The comparative advantage of Greek agriculture was only to be found in the
production of labour intensive products that were compatible with the local ecological
5
See PETMEZAS (Working Paper, table 3).
7
constraints of an arid, mountainous country with few fertile lands, and with the absence of
capital and technology that would offer the possibility to ameliorate transport infrastructure
and redress the ecological disadvantages (the expensive drainage and river flood
management projects begun only in the late interwar period). The old provinces of the Greek
Kingdom and the Ionian islands specialised in the export of currants and other dry fruits,
silk and cocoons, wine and finally olive oil and fresh fruits like oranges and lemons.
Currants alone counted for 64% of the total value of Greek exports in 1874, and fell to
49% in 1892. In 1902, in the worst moment of the currant crisis, they have fallen to only
28%.
The Greek economy showed a very high percentage of exports (17%-18% in the
1870ies and 1880ies) to the GDP already in 1860, which was maintained unchanged until
the end of the first globalisation era (PETMEZAS 2006, 130). The constant high percentage
of international trade to the GDP does not illustrate a dynamic extroverted national
economy but, on the contrary, the close integration of the regions of a weekly integrated
“national market” into the global eastern Mediterranean economy and, as a consequence,
this high percentage is the result of the relative absence or weakness of linkages between
the different economic sectors and the regional economies of the country. Imports of
Black Sea wheat, processed in the large and expanding port cities, fed the local urban
population and the neighbouring exporting farmers of the Aegean and Ionian coasts and
the Archipelago. The population of the hinterland fed itself as well as the neighbouring
small towns. The small but growing light industrial sector was steadily provisioned in raw
materials and coal through imports rather than local production. High transport cost made
the indigenous products uncompetitive. Greece was thus an integral part of the eastern
Mediterranean economy rather than an integrated national economy (PETMEZAS & KOSTIS
2006, 32-35).
Nonetheless, the agricultural export sector, located mainly in the coastal areas, was
of fundamental importance for the subsistence agricultural economy of the hinterland. In
reality, the currant export economy produced income that helped the subsistence smallowners of the hinterland meet their needs and reproduce their social position. The currant
vineyards in the thinly populated western coast were planted, in the second and third
quarter of the 19th century, thanks to labour coming from the hinterland. Thus, a part of
the mountainous surplus population migrated and was, sooner or later, permanently
relocated into the currant planted area as small owners, alleviating the population pressure
from the hinterland. Nevertheless, the greatest part of the rural labour force remained in
the hinterland and was employed as seasonal labour force in the currants vineyards,
securing the necessary supplementary income in the neighbouring coastal areas. The
economy of the agricultural households in the hinterland was directly (or indirectly for
those merchants and artisans provisioning these households) dependant on the prosperity
of the currant export economy.
The Great Depression in the 1870ies and 1880ies was a disaster for many
continental agricultural producers in particular and for the peripheral economies in general.
Interestingly enough, this was not the case for Greece that was massively importing a
product whose price was rapidly falling while it was exporting a product whose price did
not decrease, thanks to the unpredictable, but temporary, rise of French demand for wine
and its substitutes. The area planted and the exported volume grew during the 1880ies as
new low quality currants found a non-edible use in the French wine industry. The terms of
trade turned into Greece’s favour and the countryside experienced a period of relative
prosperity, especially the areas connected with the currant production. Greece thus
diverged from the trajectory of other agricultural countries during the Great Depression. It
also diverged in the timing and intensity of the economic crisis. The abrupt evaporation of
8
French demand of low quality produce, once the France’s wine production was restored
and its government imposed a prohibitive tariff in 1893, had as a direct and immediate
consequence the fall of prices for all qualities of currants. A quarter of the Greek production
was chronically redundant and left unsold. A large number of commercial export houses
went bankrupt and the usual annual credit advanced to producers by small merchants and
local usurers was discontinued. This commercial and credit crisis became soon a land
property crisis because many (small and large) landowners were unable to service their
debts. Finally, producers had to limit their monetary expenses in order to cut down cost,
even if the quality of the product suffered. The seasonally employed labour force was
drastically reduced. This led to an extremely harsh and chronic income crisis in the hinterland,
where the seasonal labour for currant farms was originating (PETMEZAS 1997). These
populations opted for transatlantic emigration which really began with the turn of the
century. This first massive wave of Greek (mostly rural) out-migration (1898-1924) led
almost half a million Greeks (the youngest and most motivated part of the rural labour
force) to move to the Americas. The annual cumulated rate of population growth fell from
an 1,5% (1860-1896) to 0,79% (1896-1920), almost half the 19th century level.
Instead of exporting labour intensive products, Greece now exported its labour.
Young unmarried peasants from provinces neighbouring the currant producing area (e.g.
seasonally working in and not owing currant vineyards) that are over-represented. A
concomitant explanatory variable for the uneven distribution of departing emigrants among
Greek provinces is the absence of urban centres therein and of supplementary economic
activities (animal husbandry) that might offer alternative prospects of employment
(PETMEZAS 1995). Transatlantic migration, a novel eastern European and northern
Mediterranean phenomenon since the 1880, appealed to more than the desperate
subsistence peasants: it soon became a general rural phenomenon in Greece and in the
ottoman Christian population (see Table 8). Emigration was a tested, financially possible
and relatively safe way of collecting the necessary sums of money through temporary
overseas employment.
Transatlantic migration had as a direct and immediate consequence the radical
decrease of the rural labour population and indirectly the increase of the available land and
capital per active labour unit. The latent unemployment (best measured by the average
seasonal surplus labour) shrunk in the beginning of the 20th century to a record low level
(Table 6). This generally ameliorated indices without really changing the structure of Old
Greece’s agriculture. The undercapitalised small-owner land tenure system was maintained.
The emigrants’ remittances helped the remaining family members maintain their cultural
and social needs, meet their debt payments and even offer cheap credit to local cultivators
and neighbours. In the interwar period, the agricultural structure of Southern Greece
remained virtually unchanged, even though many peasant households have been obliged to
increase the subsistence part of their rural activities. This was done mostly by the expansion
of cereal producing area at the expense of the fallow, without a concomitant increase of the
use of (costly) fertilisers. The result, with a small time lag, was a general and sustained
decrease of the cereal yields that lasted until the early 1930ies (PETMEZAS 1999, 56-58).
Southern Greek agriculture survived but it had fallen into an involutive trap.
9
Table 6 Estimated unemployment in Greek agriculture.6
year
population AMLU (‡)
1860
1.096.810
263.199
1875
1.577.113
384.799
1887
2.145.996
529.731
1911
2.699.884
577.830
1929
6.292.526
1.219.898
1940
7.344.860
1.384.131
1954
1955
1965
(†)
32,14 %
31,82 %
31,57 %
31,75 %
34.20 %
34,97 %
35,14 %
average surplus
minimum
maximum
7.2 %
12,8 %
20,4 %
46,4 %
20,6 %
46,5 %
10,8 %
34,7 %
29,8 %
57,8 %
average seasonal surplus
minimum
Maximum
-19,1 %
-0,7 %
4,8 %
28,6 %
4,8 %
28,3 %
-3,6 %
18,2 %
13,0 %
38,6 %
15,2 %
10,6 %
2,3 %
-3,0 %
-8,8 %
(†) the coefficient of estimation of the [available] active rural labour units, using the total rural population (e.g. those living in agglomerations
with less than 2000 inhabitants). (‡) For the years 1860, 1875, 1890, 1910, 1930, 1940,
The institutional deadlock in Thessaly and the Northern ‘new Provinces’
During the long century that followed Greece’s independence and irredentist
expansion (1830-1922) the land tenure system of the country was profoundly affected
every time a new territory was annexed to the country. A series of land reforms were thus
initiated which finally transformed the countryside into a small-owner society. The state
policy was one of validating or promoting, initially, the de facto and, finally, the de jure
appropriation of lands by their Christian cultivators to the expense of Muslim landowners
of any size. This policy intended to legitimise the new state vis-à-vis its new peasant
subjects (who have taken an active part in the war of independence and were ready to fight
for their ‘imprescriptible rights over the land they cultivated’) and secure the
implementation of the principle of absolute landed property against any pre-modern notion
of overlapping and incomplete rights over land and other natural resources. The
annexation of Thessaly, in 1881, is the only case of departure from this policy, and a bitter
‘agrarian question’ emerged and poisoned the political life until the War decade (19121922) which led to the implementation of a vast and radical land reform.
Large land estates were relatively marginal in ‘Old Greece’. The annexation of
Thessaly and Arta in 1881 changed the situation. The extensive corn producing but
unhealthy Thessalian lowlands were thinly populated and dominated from large landlords.
Merchants and financiers of Greek origin bought out the former Muslim landowners,
especially during the negotiations that led to the annexation of Thessaly in 1881. The
successive Greek governments followed a policy favouring large landowners, who were
also bearers of Greek national debt bonds in the Paris and London stock exchange. The
landowners aimed at the restriction of the “traditional”, inheritable and secure rights of
tenure of the sharecroppers. Such a policy was neither novel, nor restricted to Greece. It
was also embraced by other large land estates holders in the Ottoman Balkans, who tried to
expand their right of property at the expense of the rights of tenure of their sharecroppers
(ISLAMOGLU 2000).
Traditionally sharecroppers (or better sharecropping families with a pair of oxen)
were given land to sow accordingly to their labour and traction force. As long as they
fulfilled the implicit and unwritten rules of good and honest husbandry and they paid their
taxes and rent, they could not be driven away from the estate and they could securely
bequeath their tenure to their heirs, if only undivided. Sharecroppers were reluctant to
6
Cf. PEPELASIS & YOTOPOULOS (1962, 144-151), PETMEZAS (2003, 143; 427-429).
10
produce more corn that they needed for their subsistence and they “invest” all their
available labour and meagre capital into activities free of landlord control, especially animal
husbandry. Landlords in Thessaly, and elsewhere in the Balkans, had never really tried —
with some notable but futile exceptions — to use wage labour, invest capital and engage
themselves into the direct management of their uncultivated lands. These lands were
usually profitably rented in cash as grazing lands to semi-nomadic pastoralists. Landlords’
main effort was oriented towards limiting the security of tenancy. Some landlords even
limited the number of sharecroppers and expanded the area they rented as pastures
(PETMEZAS 1999, 76-80).
Table 7 GDP shares and rates of growth7
primary
Secondary (†)
Tertiary
1865-1874
72,58%
6,86%
20,56%
1875-1884
71,79%
6,81%
21,40%
-0,81%
1885-1894
69,56%
6,05%
24,39%
1911-1930
-1,65%
1895-1904
65,89%
9,28%
24,83%
1930-1938
3,43%
1905-1914
60,18%
14,07%
25,75%
1,70%
1860-1911
0,22%
1915-1924
65,44%
7,94%
26,62%
0,28%
1911-1938
-0,14%
1925-1934
56,14%
8,32%
35,53%
1858-1937
1,23%
1860-1938
(†) includes minerals and metals
0,10%
1935-1939
57,58%
8,91%
33,51%
real GDP p.c.
Volume (in SWE) per capita
1858-1888
1,30%
1860-1887
1888-1898
-0,30%
1898-1911
4,14%
1887-1911
1911-1922
-2,54%
1922-1937
2,34%
1858-1911
1911-1937
1,14%
Such an institutional system was proven an obstacle to the growth of agricultural
production and productivity. Thessaly was seen as the future granary of Greece and its
annexation in 1881 was hailed as the occasion to secure high cereal production, reduce
wheat imports and the trade deficit. Nonetheless, cereal production in lowland Greek
Thessaly – as well as in Ottoman (and later Hellenic) Macedonia –stagnated, in spite of the
incentive of higher tax protection (AGRIANTONI 1986, 281-288; AKARLI 2000). This
peculiar land tenure system ensured that the surface sown was proportional to the number
of sharecroppers, while the technological inertia precluded any change in the returns to
land. The only advantage of this archaic agricultural system was the secure restoration of
the natural fertility of the soil, thanks to the combination of cereal crop rotations and seminomadic animal husbandry. Institutional barriers were thus, apart from the ecological
constraints of the particular combination of cereal agriculture and semi-nomadic animal
husbandry in the lowlands of Thessaly and Ottoman Macedonia, responsible for the
relative agricultural stagnation.
Agricultural crisis and economic growth in the turn of the century
The beginning of the 20th century coincides with the very acute Pubic Finance and
the agricultural income crisis in Greece and yet, in spite of the fact that exports were now
diminishing in value, the Greek economy soon entered a period of very rapid growth and
industrial renewal (AGRIANTONI 1999). Greece had profited both from the draconian
financial and monetary policy imposed by the Comité Financière Internationale (1898-1945) and
the general Belle Époque prosperity in Eastern Mediterranean (HADJIIOSSIF 1999). During
this era of rapid GDP growth (see Table 7) the Greek agriculture faced two very important
crises. The “currant crisis” and the so-called “agrarian question”, linked to the exacerbation
of the conflict between landlords and sharecroppers and the stagnation of cereal
production in Thessaly (and Ottoman Macedonia). Both crises would find their solution
through the active intervention of state and banking agencies.
7
See KOSTELENOS, PETMEZAS & als (forthcoming) GDP growth is calculated between selected peak years.
11
In the case of Thessaly (and the Macedonian and Epirotan provinces still under the
Ottomans), the landlords had by 1910, virtually given up any effort to impose new
temporary sharecropping contracts and simply hoped either to preserve the greater part of
their landed properties or to sell them gradually at relatively high prices. In 1911, by
publishing a law that secured the rights of tenure of the sharecroppers, the new and
confident government of Eleutherios Venizelos had made clear that it intended to favour
the landless and small owner peasantry, in order to better mobilize them for the coming
Balkan Wars. During the long and bloody war decade (1912-1922) the mobilisation of the
peasantry, the bulk of the army, became a priority for the irredentist liberal governments. A
Land reform was proclaimed in 1917. Defeat in 1922 and the need to calm down the
incoming large numbers of demobilised soldiers and refugees, lead to the radicalisation of
the land reform legislation and implementation in the 1920ies. By the late 1920ies, the
“agrarian question” was solved, although the completion of the land reform and the
dissolution of all legal and financial impediments upon the free functioning of the land
market were completed only after the Second World War.
The currant chronic overproduction crisis and the income crisis of the peasant
population in old provinces were more urgent and more difficult to tackle by governmental
fiat. It took fifteen long years of negotiations, peasant and popular mobilisations, piecemeal
measures and the rapid deterioration of the currant crisis to pave the way for the
establishment, in 1905, of a very profitable financial operation headed by the Bank of
Athens, the first Greek savings Bank (with a large French and English participation). A
private Company, called Eniaia, with a 20-year privilege, monopolised all the (low quality)
currants that were not exported, against the payment of a tax to the government and the
obligation to regulate the volume of exports (and thus influence the international market
prices of currants), assure cheap credit and guaranteed prices of intervention to all
producers. By 1908, the volume of exports and prices were stabilised (albeit at a level lower
that in the golden 1880ies), while the producers could again find credit for their production.
The Bank of Athens built a large conglomerate of industrial (wine and alcohol export
industries) and commercial companies that profited from their monopsonistic position and
made handsome profits. In 1910, the most dynamic agrarian sector of the Greek economy
had long lost its carrying force and passed under the indirect control of a financial group
targeting the use of the product as cheap raw material to its wine and alcohol industry, one
of the largest industrial Companies in the country (PETMEZAS 1999, 68-72).
In this first transitional period$, agricultural exports and production stagnated at a
time of rapid GDP growth, whose rate of growth accelerated due to the growth in the nonagricultural sectors and the increase of capital inflow and transfers in the form of mariners’
and emigrant’s remittances, profits repatriated from maritime and commercial activities in
the larger Mediterranean world etc (HADJIIOSSIF 1999). Until the First World War the
economy of the small Greek nation State was still more an integral part of the Eastern
Mediterranean Economy than an integrated national economy.
Table 8 Percentage of yearly net emigration
1888-92
1893-1900
1901-06
1907-12
1913-18
1919-24
1925-29
1955-61
1962-68
1969-75
0,29
0,73
4,64
9,55
4,49
1,86
1,31
4,37
9,46
3,02
Land reform, population exchange and productive stagnation in the long
interwar period
The land reform did not immediately have the beneficial results many of its
promoters (or, later, its defenders) were hoping for: the intensification of rotations and the
commercialisation and growth of agricultural supply (output) and demand (inputs) (KOSTIS
12
1988). Land reform and refugee agricultural settlement was mainly a phenomenon
concerning the lowlands of Thessaly and the New Provinces. Perhaps three quarters of the
land in use in Macedonia and Thrace and one half in Thessaly and Epirus were included in
the lands subjected to the land reform or the refugee settlement (PETMEZAS 2002, 196
sqq). Unfortunately, due to financial stringencies, only the refugees could profit from low
interest credits and provisions for their new settlement. The landless indigenous peasants
had simply to look after their own needs in goods and credit. The new agricultural
exploitations were as undercapitalised as those of the south, albeit relatively larger in size.
The population of the mountainous hinterland, mainly small-owners and pastoralists, lost
both access to low cost pastures in the lowlands and an important part of their
supplementary income from seasonal work in the large estates. These facts forced them
into expanding their subsistence cultures on the hills and mountain flanks, which inevitably
led to lower yields and the depletion of land fertility (KOSTIS 1987, i:121).
Another relatively negative repercussion of the land reform was the disintegration
of the ancient symbiosis between extensive cereal cultivation and semi-nomadic animal
husbandry. The land reform had completely destroyed the territorial unity of pasturages
and land in fallow. In a few years large semi-nomadic herds were split and pastoralists were
obliged to change their way of life or emigrate. Greek animal husbandry was transformed
from a predominantly semi-nomadic to a sedentary peasant activity, but it retained of
course its extensive character of out-door activity. This meant that the number of animals
could not grow beyond the ecological limits of extensive animal husbandry. The
amelioration of the breeding races that had begun in the 1930ies did not go very far before
the 1950ies. The production of meat and milky products could not keep track of
population growth and in the interwar period Greece became a net importer of animal
products.
Table 9 Number and size (in thousands ha) of agricultural exploitations by size.8
< 1 ha
1-3
3-5
510-20
20-50(†)
>50 ha (†)
Total
1929
number
size
37,60%
5,90%
35,00%
19,30%
14,30%
16,10%
8,90%
17,40%
2,38%
10,96%
1,02%
9,21%
0,20%
16,90%
955.278
3.343
1961
number
size
23,00%
3,60%
37,40%
21,20%
20,40%
24,00%
15,20%
31,10%
3,40%
13,60%
0,60%
5,00%
0,10%
1,50%
1.139.379
3.673
1971
number
size
21,80%
3,20%
37,10%
19,60%
20,20%
22,10%
15,90%
30,50%
4,10%
15,40%
0,90%
6,80%
0,10%
2,50%
1.036.600
3.586
1981
number
size
24,70%
3,30%
20,80%
7,80%
33,40%
28,50%
15,00%
27,20%
4,70%
16,50%
1,20%
9,20%
0,20%
7,50%
998.876
3.692
(†)for the year 1929 it is 20-100 and > 100 ha.
The land settlement of the refuges and the land reform were temporarily responsible
for the disarticulation of the productive structure of agriculture in Northern Greece. Thus
the 1920ies witnessed the lower ever level of agricultural self-sufficiency of the country.
The Greek agricultural economy in the interwar period suffered from a major structural
problem: the low income of the family farms, especially the ones smaller in size or those
which could not specialize in highly demanded commercial crops. The mountainous
villages suffered most, especially since the transatlantic emigration outlets were closed and
the rate of population growth reached was once again at its pre-1900 levels (1,4% annually).
Ever since the interwar period they begun to experience a long term path towards socio8
See ΑΤΕ (1986, 101-103) PETMEZAS (2002, 240)
13
economical marginalisation, which ended with the evacuation of the greater part of their
population in the 1950ies and 1960ies, once (transatlantic and intra-European) emigration
was again a realistic option (see Table 8).
The new interventionist state policy and the agricultural income crisis
The Greek state in the autarchic environment of the Interwar period was forced to
engage in a large and costly program of institutional reforms, administrative expansion and
public works indented to sweep away all institutional and ecological barriers to the growth
of agricultural production and income. This effort was further complicated by the large
scale population transfers and re-settlement and the rapidly growing demographic pressure.
Resources and capital had to be directed to the primary sector in order both to finance long
term structural transformations and to provide short term income support for the larger
part of agricultural population in the countryside. This financially meant both a large
program of international borrowing destined to invest on refugee settlement and
infrastructural intervention (public works of land amendment, foundation and financing of
government services, of the Agricultural Bank and Specialised Autonomous Organisations
and Cooperatives etc.) and a policy of forced internal borrowing through financial
expediencies that put the burden on the former landlords (paid in devaluated long term
bonds) and the poorer urban strata (inflation, growth of indirect taxation, forced
borrowing). The volume of capital directed to the agricultural sector and the countryside
has never been estimated, but we know that the refugee settlement and the public works of
drainage and land reclaim in the years 1922-1932 have absorbed 8 billion drachmas in
monetary expenses, or the equivalent of one tenth of the aggregated budgets or 3% of the
aggregated GDP of the years 1923-1932. Servicing this debt and securing its access to the
international financial markets became a primary concern of the Greek state, already unable
to pay its war debt in the early 1920ies. Agricultural exports were still the main source of
foreign exchange in the interwar period, as it was in the 19th century.
The tobacco economy in the Interwar period was substituted to the currants as the
main provider of hard currency and change to the Greek finances. Greece came to
dominate the largest part of the former ottoman productive zone. After the incorporation
of tobacco growing provinces into Greece and the government’s decision to abolish the
privileges of the Régie cointéressée des Tabacs ottomane in Greek Macedonia and to forgo the
foundation of any other comparable national institution, tobacco production was expanded
and intensified. In a few years the average area per producer doubled, from 0,33 to 0,6 ha
per tobacco grower, and tobacco became the major export product of Greece in the
Interwar period. In some hilly areas (producing the best quality) tobacco was gradually
transformed almost into a monoculture. Tobacco covered 24% of the total value of
agricultural production in 1929 and currants added 12% more. They both covered 68% of
the total value of Greek exports in 1923-1932, 58% in 1933-1938 and 43% in 1954. Labour
and capital employed in tobacco production and tobacco industry were much larger that
the respective figures for the currants sector. The tobacco growers employed a relatively
smaller number of seasonal salaried labourers, but the commercial processing of high quality
Greek “oriental” tobacco employed as many as 40.000 highly specialised workers in the
towns of Eastern Macedonia and Thrace. The tobacco was also a raw material destined to
the indigenous industry. As a matter of fact it is estimated that probably one seventh of the
active labour forced was employed in tobacco related activities. Yet tobacco was never a
natural monopoly of Greece, like the currants, and it was impossible for anyone to regulate
the international price of Greek tobacco. The income of a large number of agricultural
families and of a substantial number of workers in Northern Greece depended exclusively
on this activity, whose production steadily grew until the 1929 crisis, and then stagnated,
causing great anxiety to merchants and public officials. The currant sector on the contrary
14
stagnated in the level already attained in 1910, a large part of the growing international
demand being covered by the new Californian and Australian producers. Export agriculture
(based solely on two products) lost its dynamic after the 1929 crisis (PETMEZAS 2002, 246).
The Greek economy in the interwar period was larger in absolute terms and more
integrated internally and this was accentuated, of course, by the general decline of
international transactions and the almost universal adoption of autarchic national(-ist)
policies. A measure of the change in Greek public policy is the degree to which the state
gave subsidies to agricultural producers. The production of wheat, cotton and currants
profited from one or another kind of subsidies on prices or of income support, especially
during the worst years of the crisis in 1930-1934. The volume and quality of tobacco was
put under closer state control after 1931. In the 1930ies the olive plantations of Greece had
shown a significant extension thanks to state incitation and promotion. The state
Agricultural Bank indirectly financed and promoted the export of highly valued fresh fruits
and vegetables. It also gradually financed the purchase and organised the distribution of
inorganic fertilisers and, after the 2nd World War of pesticides, selected seeds, selected
animal breeds, agricultural machines and equipment. In the 1930ies the use of fertilisers
begun to grow (although with great regional discrepancies) and its impact on the rise of
yields was immediately felt (see Table 10).
In the 1930ies, the Greek economy was becoming an autarchic and inward looking
economy. Tariff protection and a piecemeal policy of support to industrial development
was in reality a policy that promoted the prospects of a few relatively large industrial groups
that dominated local oligopolistic markets. The growth of agriculture in the 1930ies
concerns mostly subsistence and internally consumed products like wheat and cotton
which had profited from the expansion of arable land and the rise of yields. The policy of
national wheat self-sufficiency had won over the majority of civil servants and especially of
the recently formed group of agronomists and agricultural economists. The interwar period
witnessed a new rise of latent rural unemployment (see Table 6) in spite of the rise of all
productive indexes in the 1930ies. Actually the post 1932 agricultural expansion was
heading to a deadlock. The highest yields were in Macedonia, which profited from the land
reform and the land reclaim, but they were stagnating in the last years of the Interwar
period. Specialisation in agricultural production was only visible for a few highly prised
export products. On the contrary, there was a net regression towards the expansion of
subsistence cultures, and farms chose to limit their market dependence (KOSTIS 1987,
i:131-139). The result is of course a deceleration of cereal yields growth. What we observe
is that provinces which were previously left behind, in respect to their yields, converged
towards the national average, will those that were in advance decelerated. A general
movement towards the blurring of specialisation and interregional differences is observed.
The fight for an autarchic re-orientation won at the expense of the economy’s dynamic
adoption to world demand. This was, of course, an understandable option given the
general ideological, political and diplomatic context in Europe in the late 1930ies
(PETMEZAS 2002, 239-246).
15
Table 10 Indices of Modernisation in Greek Agriculture9
Chemical
fertilisers
kg./ha (‡)
2,43
4,11
32,54
33,00
51,01
49,69
127,82
250,85
476,92
761,69
1911
1915
1929
1930
1938
1939
1950
(†)1961
1971
1981
Agricultural credit (in 1928 drachmas)
Per
% of long &
Per ha (‡)
AMLU
middle term
3,65
59,05
45,48
75,90
76,16
4,00
73,00
65,00
130,00
140,00
irrigation as
% of
oland in use
2%
21%
26%
11%
35%
48%
46%
Tractors
HP per
Number 1000 ha (‡)
Fixed capital (in 1970
drachmas)
Per
Per ha (‡)
AMLU
3,20
7,79
1%
4,10
8,17
14%
22%
27%
5,10
6,30
8,40
17,10
25,80
12,32
14,13
23,63
60,82
95,94
24.533
110.626
238.131
3,28
14,06
36,13
(†) for the number of tractors and their HP per 1000 ha figures are for 1962 (‡) ha of land annually planted and of vineyard
plantations.
The war had almost completely closed the economy from the external world and
Greece suffered in the winter of 1941-1942 the worst famine ever recorded. The
agricultural economy also suffered from large scale destruction during the war and the
subsequent civil war (1940-1949). A large part of the mountainous population in the war
zone has been forcibly relocated. The post war recovery was completed by the early
1950ies. Production was growing and the public work program of drainage and land
reclaim begun immediately after the war and was almost completed by the early 1960ies.
One major development, the coronation of continuous effort since the 1920ies, was the
final “liberation” of the rural population of the lowlands from malaria thanks to the
massive application of new pesticides. In the 1950ies the raise of the institutional and
ecological obstacles to agricultural development and the smooth function of the land
market were finally achieved. New land was available in the lowlands through land reclaim
and irrigation projects. Land distribution to landless peasants was completed and no more
institutional limits remained to the free disposition of the land.
Agricultural income crisis, emigration and agrarian exodus
Initially, the great problem of the Greek post war agriculture was the recovery of
tobacco production in a time of falling demand for oriental tobacco. The specialised smallowner tobacco producers of eastern Macedonia and Thrace had suffered more and, in spite
of the effort of the newly established Autonomous National Tobacco Organisation to
complement their income, they would be driven to massively immigrate to Germany in the
middle 1960ies. Other agricultural products the so-called “new exported products” (like
fresh fruits and vegetables) gradually took the place of currants and tobacco. The areas
producing such new exports rose as the most prosperous agricultural regions, while the
cities and the countryside of the tobacco economy slowly regressed both economically and
socially. The modernisation initiatives of the autonomous state organisations, the
cooperatives and especially the Agricultural Bank, did not spread equally to all the
countryside. Irrigation, fertilisers, pesticides and modern machinery and equipment were
promoted and grew rapidly yet they were unequally distributed and profited only to certain
well endowed areas, usually in the lowlands, near the large urban centres and transport
network etc. The remaining countryside fell into a severe income crisis.
9
See ATE (1985, 90-94; 108), PETMEZAS (2002, 235-236; 244), PAPAELIAS (1992, 206-207).
16
The overcrowded Greek countryside suffered from a chronic income crisis, ever since
the beginning of the Interwar period and in spite of all public efforts the problem of
agricultural income deficit has never been solved. It was of course unequally distributed both
spatially and socially, and it could be temporarily accentuated or reduced, but it was a
permanent feature of Interwar Greek agriculture, closely related to the agricultural structure
(undercapitalised small family farms), the growing latent unemployment, the deficient
transport and commercialisation system and the absence of locally available sources of
supplementary income (EVELPIDIS 1944, 26-27). In the interwar period it was estimated
that in average, every agricultural family was expected to find a supplementary income to
fill a 30% deficit of its family income (KOSTIS 1987, i:135-136). The chronic agricultural
income deficit remained a major problem of Greek agriculture well in the 1960ies,
especially for the family farms in the less productive and well-endowed mountainous
provinces and in farms of smaller size that were surviving exclusively because of the
protective measures and support of the public policy (EVELPIDIS 1953).
The new era of rapid development (ca.1955-1980).
In fact, beginning in the late 1950ies and up to the early 1970ies a massive
movement of emigration literally “evacuated” the mountainous and marginal areas. On the
contrary the productive lowlands, in spite of gentle out-migration have been innovative and
the prime beneficiaries of the more active and well endowed agricultural policy of the
Agricultural Bank. In three decades, the agricultural credit, in deflated drachmas, had
multiplied by 10. More important is the fact that long term credit, used to finance small
irrigation projects had multiplied faster than the short term credit, destined to mend for the
annual cultivation expenses. A more important development was an active public
investment policy in transport infrastructure, especially in the late 1950ies, and the
electrification of the countryside (completed in the early 1970ies). Transactional and
transport cost shrunk. Private investment in agriculture soared in the late 1950ies and in the
1960ies (ATE 1985, 20-30). The number of machines and equipment grew and the Greek
farms finally invested in the construction of specialised agricultural buildings (barns,
stables, cellars, depots etc.) which were extremely rare before the 1930ies (EVELPIDIS 1944,
39). The rapid expansion of irrigation, thanks to the long term credit of the Agricultural
Bank and the large public investment program, finally overcame the ecological boundaries
of Greek Mediterranean semi-arid agriculture, which was plagued from the irregular raining
season. The specialisation in fresh fruits and legumes had added new, high income elastic,
labour intensive commercial products that suited well the Mediterranean Southern and
coastal Greece. In the plains and slopes of the interior, cotton and sugar beat were
especially privileged by governmental policy in Thessaly and Macedonia.
This development was parallel to the concentration of land through land renting
contracts. In the 1970ies a new group of well equipped farmers, with enough (owned and
rented) land and equipment (reaper-thresher combines) came to dominate local agricultural
communities, renting more land and providing well remunerated services to
undercapitalised small owners. Yet, in the 1960ies, agriculture offered less and less to the
growth of the Greek GDP, while it still offered, until 1983, a surplus international trade
balance on agricultural products and foodstuffs (DAMIANOS & als. 1998).
Conclusion
The major problem of Greek agriculture in the 19th century (in spite of its
temporary export performance) was the inadequate urban demand for agricultural products
17
and the retention in the farms of ‘accumulated’ surplus labour10 which (under the given
institutional, technological and ecological context), locked agriculture into a trajectory of
involution, meaning the limited growth of output and productivity under growing population
pressure and rapidly diminishing returns. Transatlantic emigration, the result of the
international opportunity offered by the growing US demand for unqualified labour and
the unavoidable outbreak of a harsh chronic income crisis of the countryside, offered a
temporary respite and helped preserve an undercapitalised small-owner agricultural structure
characterised from low productivity of labour but capable to absorb underemployed
surplus labour. The rapid growth of the Greek economy in the early 20th century was
observed mainly into the extroverted urban and maritime economy and was closely linked
to the international economic expansion and not with the agricultural economy which
nonetheless comprised more than half the GDP and labour force.
The autarchic international environment of the Interwar and the urgent challenge
posed by post-1922 social and political transformations to the vulnerable Greek polity
forced the political elite to undertake a very ambitious and costly program of public
intervention which was destined to alleviate all institutional and ecological barriers to
agricultural development and stop the involutive trajectory. This demanded the adoption of a
totally different concept of administrative responsibility and a radical shift in public
(agricultural and economic) policy towards “liberal” (in the beginning) and “authoritative”
(later in the 1930ies) interventionism and protectionism. Legal and policy measures were
also taken in order to circumvent the economic and technical barriers to the agricultural
(e.g. labour productivity) growth, achieve the cheap and regular provision of credit and
inputs, and facilitate access to the market by price stabilisation and income support. This
costly program, financed from foreign loans (partly defaulted), forced internal debt and the
post war American aid, would not alleviate the major burden of the Greek agriculture:
latent unemployment in an overcrowded countryside and chronic income deficit (resulting
to growing indebtedness) of the family farm.
Once again emigration, in the first two post-war decades was a solution and this
time the depopulation of the countryside and its transformation was definitive. Institutional
barriers were raised and the general public policy of protectionist was gradually diminishing
in intensity, which meant that this time the agricultural structure was slowly transformed,
land was concentrated, the most capitalised farmers were able to be more competitive and
substantially increase their labour productivity and prosperity. In a few decades Greek
agriculture had passed though the so-called “second” and “third” modern agricultural
revolutions (even if it finally missed the “first” one like almost all the Mediterranean
counties). The growth (and this time the radical structural transformation, e.g. industrialisation)
of the Greek urban economy was once again related to the international economic
expansion and relatively independent from events and developments in the rural economy.
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