Hungary's first Producer Organization and today's challenges of competitiveness - growing economic, social and environmental risks

Abstract

Our analysis builds on a case study of a Producer Organization, rooted in state socialist cooperativism, and a model that integrated small- and large-scale vegetable producers to the increasingly globalized food market. The state-socialist cooperative involved small scale farmers that used to produce vegetables for the cooperative for sales through backyard farming within the “second economy". The cooperation among small and large-scale producers could be sustained after 1989 even in the context of the devastating social and economic crisis following the collapse of state-socialism. The emergence of Hungary’s first Producer Organization eligible for EU grants was based on this long-term cooperation of producers.

The transformation of the retail sector taking place in different stages after 1989 forced local producers in our case study area to get increasingly integrated to the globalized food system and transformed the organizational framework, the internal and external networks of the producer cooperation and every element of the production and sales process. These transformations imply new economic, social and environmental risks. We focus on these complex risks in a historical perspective, as they endanger the future of this long-lasting producer cooperation surviving state socialism and the post-socialist transformation.

First, we explore the roots, endowments, local economic and social characteristics that played a role in the development and survival of this long-term viable model of producer cooperation. We have a complex approach through which we aim to understand the processes that influence the historical development of the producer cooperation, taking into account the characteristics of the place it developed from, the regional context, changes in the national regulative framework and relevant international influences.

In the second part of our study, we introduce the establishment, structure and operation of the Producer Organization, and analyse the rapid and profound changes that have resulted in the increased integration of the Hungarian fruit and vegetable production to the globalized food system including the increasing influence of multinational enterprises (MNEs) in the Hungarian retail sector. Our study reviews the local consequences of global capitalism, with a particular attention towards the (re)production of social and spatial inequalities, and the effects that increase spatial and social injustices by limiting access to basic goods and services. We focus on understanding the local manifestations of the interconnected effects of multiple geographical scales, that is, we interpret injustices in a multi-scalar perspective based on the lived experiences of local actors.