Institutions and territorial structuring: the transformation of the dairy sector in France and Germany

ABSTRACT

This article develops a multiscale institutional framework to shed light on the territorial dynamics of a sector. The case of the long-term transformation of the European dairy industry shows that, within a common European regulatory system, sectoral communities are structured territorially in Germany and nationally in France. Second, a change in public policies exerts pressure not only on firms’ adaptation capacities but also on sectoral communities. Third, territorial institutions appear primary in structuring sectoral dynamics when territorial players (public, private and collective) create, pool and sustainably manage productive resources, either for integration into a wider market or for developing a local means of competing.

KEYWORDS:

• European dairy industry
• territorial dynamics
• institutions
• public policy
• liberalization
• collective adaptation capacity

JEL:

• B52
• L1
• R11
• Q18

ACKNOWLEDGEMENTS

The authors thank the French and German industry stakeholders for their time as well as their colleagues from the LEREPS seminar for their valuable remarks

DISCLOSURE STATEMENT

No potential conflict of interest was reported by the authors.

Notes

1. Protected Geographical Status (PGS) is a legal framework defined by European Union law to protect the names of regional foods. The PGS is based on a specific history and knowledge that are embodied in publicly acknowledged terms of reference. Protected Designation of Origin (PDO), Protected Geographical Indication (PGI) and Traditional Speciality Guaranteed (TSG) are distinct regimes of geographical indications (GIs) within the framework. PDO, PGI and TSG are differentiated products that can satisfy a specific and remunerative demand.

2. The full intake principle implies that all the milk of a member of the cooperative must be delivered; therefore, the dairy is obliged to purchase all the milk produced by that member. The same type of relationship exists between dairy farmers and private dairies.

3. The dairy industry developed in southern Bavaria in the 1820s, and the land then used for flax production was redirected towards permanent grassland and milk production. Owing to the know-how imported from Swiss cheese-makers, a cheese business developed in the foothills of the Alps. In Northern Germany, in contrast, the butter industry developed early for the international market (Jürgens & Fink-Keßler, 2015).

4. Between 2004 and 2009, the EEG gave farmers a major incentive to invest in biogas installations (a 20-year contract with a relatively high electricity feed-in price). The EEG was then modified in 2012 and 2015 to reduce the negative effects on the environment and the increase in land prices: capping the use of corn at 60%, providing incentives for smaller installations and employing a 10% price reduction (Torries 2016).

 

Additional information

Funding

This project was financed within the framework of a call-for-research projects from the French Ministry of Agriculture, ‘Understanding and Strengthening Agricultural and Agri-Food Competitiveness’ (2017–19). However, the sponsor did not participate in the writing of the article.