Norwegian Dairy Industry: A Case of Super-Regulated Co-Operativism

Abstract

Purpose – Dairy has been the backbone of agriculture in regional Norway, and the processing of milk has been dominated by co-operatives owned by milk farmers. During the social democratic order (1945–1979), productivist agriculture thrived, while a more multifunctional agriculture was developed after 1980. As a measure against overproduction, a quota system was introduced in 1983. The purpose of this study is to see if there are signs of a neo-productivism revival after climate change and other global shocks, like the food crisis, featured prominently on the political agenda.

Design/methodology/approach – The chapter reviews the radical structural changes in Norwegian dairy production since the early 1960s, which reduced the number of milk farms radically from 148,000 in 1959 to almost 16,000 in 2009. According to the Agricultural Agreement between the Norwegian government and the farmers' organisations, the co-operatives are given an important semi-public role as market-price regulators and stock keepers. This Norwegian system may be described as a classical regulated dairy regime. The Norwegian dairy regime has been through several deregulations and re-regulations over the last 20 years, partly forced by internal pressures and partly inspired by liberalisation tendencies abroad.

Findings – After mid-1990s, there has been an increase in the number of joint dairy farms, where individual ownership of land is maintained while herds, buildings and machinery are merged. Three thousand six hundred thirty dairy farmers are now participating in 1,510 joint farming firms, producing 29 per cent of the milk in Norway. This rapid growth of joint farming is transforming the dairy sector in Norway. Analysis has shown that its evolution is closely tied to farmer socio-economic demands, including social benefits, such as increased leisure time, and security during illness. While there has been pressure to increase productivity, the food crisis changed attitudes, making the current policy of import tariffs and subsidies easier to defend.

Originality/value – This chapter shows that neo-liberalism in Norway was not pursued as far as in most other OECD countries, although some deregulation was taking place. Norwegian agricultural policies are still regulating the sector to a substantial degree, with the annual Agricultural Agreement negotiations serving as a centrepiece. Norway has ambitious climate goals, and by 2020 greenhouse gases emissions should be reduced to 30 per cent of the 1990 rate. A further goal is that Norway will be carbon neutral by 2030. As part of the implementation of its climate policy, a White Paper on agriculture and climate change was put forward in May 2009. For Norwegian food production as a whole, a change towards more grazing at the expense of crops would improve carbon storage and reduce the overall use of fertiliser. Such a shift in land use would benefit the dairy sector, in part because of easier access to domestically grown cow feed.

Citation

Almås, R. and Brobakk, J. (2012), "Norwegian Dairy Industry: A Case of Super-Regulated Co-Operativism", Almås, R. and Campbell, H. (Ed.) Rethinking Agricultural Policy Regimes: Food Security, Climate Change and the Future Resilience of Global Agriculture (Research in Rural Sociology and Development, Vol. 18), Emerald Group Publishing Limited, Leeds, pp. 169-189. https://doi.org/10.1108/S1057-1922(2012)0000018010