Economic Development in Denmark Before and During the World War/Development of Agriculture
Development of Agriculture
The legislation so far described has been in the interest, not only of trade and industry, but of all the classes of society concerned. It has therefore been of great service to the agricultural population. But in this case we are confronted with so many special problems besides, that it will be necessary to examine the social and economic development somewhat more closely.
In 1870 all prices were high, and particularly the price of grain. The times were good for agriculture, and the wealthier classes of the agricultural population had prospered. In the early seventies the price of farms was two or even three times as high as it had been twenty-five years before. To some extent this was due to more scientific husbandry and to the new buildings which the prosperous farmers could afford to erect under the influence of the good prices. On the whole, agriculture made great progress in the generation which preceded the seventies. Between 1850 and 1870 the production of grain seems almost to have doubled; to this came the increase in price due to the excellent state of the market. After 1875, however, the price of grain declined in a marked degree. This was largely due to North American competition, as a result of which enormous quantities of grain were thrown into the European market. In the course of twenty years the price of wheat fell about 40 per cent, and the price of rye 30 per cent. The result was the value of farms soon decreased. In the early eighties land values were still high, even three times as high as in the forties; but after 1884 the decline was rapid. Within ten years the average price per Tönde Harikorn had fallen 15 per cent, and was still falling. This state of affairs bore the more heavily on the farmers for the reason that many of them had availed themselves of the new facilities for obtaining loans from credit associations which came into existence from the middle of the century. In good times it was very advantageous. A farm valued at, say, 100,000 kroner and mortgaged up to 70,000 kroner would give its owner a net capital of 30,000 kroner. If its value increased 15 per cent, while it was still under mortgage, the net capital of the owner would be increased by 15,000 kroner or by 50 per cent. But when prices went down, on the other hand, the case was reversed. A decrease of 15 per cent, on 100,000 kroner meant that the owner's net capital was reduced by exactly one-half. Farmers who had raised larger loans in order to satisfy joint heirs or to make improvements, or because otherwise they could not have taken over so large a property, suddenly found themselves reduced to penury, their whole fortune having been swallowed up by the debt. This was the fate of many farmers, most of whom, as always is the case at such times, had a very vague idea of the cause. Many of them were of the opinion that if the transition from the silver standard to the gold standard had not been carried out in 1873, the depression of the last quarter of the nineteenth century would not have occurred. The silver standard and bimetalism consequently had many enthusiastic advocates in those days.
The change was more severely felt for the reason that many farmers during the prosperous years had become accustomed to easy circumstances and were now compelled to lower their standard of living. It is always easier to become accustomed to a large income than to return to a small one. But the sturdy and economical Danish peasants soon adjusted themselves to their straitened circumstances and energetically set about to keep what they still had. And this brings us to a very interesting and instructive chapter in Danish economic history.
If we turn to the statistics, we find that not all agricultural products went down in price. Beginning with the early seventies and running through the following twenty years, the price of bacon is seen to have fallen only 8 per cent. Butter even rose in price by 13 per cent. This indeed was explained by a thorough improvement in its quality, but it was at all events a hint of great importance for the farmer.
With surprising quickness Danish agriculture shifted the helm. Facing conditions as they were, Denmark now turned her attention to bacon and butter; and instead of exporting grain she now began to import it, depending for her supply more and more on North America and the other granaries of the world, in order to increase her output of the more valuable products. A few figures will show the revolution which took place. In 1870 the value of Denmark's excess of exports of grain was 38,000,000 kroner; in the early eighties it was almost nil, and now the grain import increases from year to year. At the opening of the present century she was importing grain to the value of 50,000,000 kroner per annum, and the following years brought a further rise. Rye and wheat were the chief grains imported, but maize was also imported in rapidly increasing quantities. Other important animal foods were also imported, particularly oilcakes, as well as an increasing quantity of fertilizer. All this bears witness to the great change in our agricultural economy. And if we glance at the exports, the picture will be complete. Toward the end of the sixties the annual exports of butter amounted to about 5,000,000 kilos; at the beginning of this century they had increased to 70,000,000 kilos. The exports of cattle increased from upwards of 50,000 head at the close of the sixties to more than 100,000 head fifteen years later. These exports were reduced in 1892, indeed, by England's prohibition on the importation of cattle from the continent and the barriers raised by Germany in 1897 under alleged reference to sanitary conditions; but to offset this Denmark then began slaughtering at home and exporting meat. The change is especially noteworthy in the case of swine, bacon and ham. From an annual export of 40,000 hogs at the close of the sixties, the number increased to about 280,000 during the next fifteen years. When Germany, in 1887, stopped importing living swine, Denmark began to do her own slaughtering, and year by year her exports of bacon and ham steadily increased, until at the opening of the new century they amounted to 70,000,000 kilos per annum. Butter and bacon are now the chief exports of Denmark.
If we consider the areas under cultivation, we find corresponding facts. In 1871 the area planted to fodder-plants was between 5,000 and 6,000 ha (one ha is about 2.5 acres). Ten years later it was three times as large, and in 1901 it had grown to 142,000. In the present century this figure has been doubled. During the same period the raising of live-stock has undergone a remarkable change. In the sixties the breeding of sheep reached its maximum; in 1866 there were in all 1,900,000 sheep in the country, whereas at the outbreak of the World War there were only 500,000. Intensive agriculture leaves no room for sheep. On the other hand, the number of cattle increased from 1,200,000 in 1866 to 2,500,000 in 1914. But the increase in the number of hogs has been enormous; in 1866 there were 400,000 hogs in the country; in 1900, 1,500,000; and in 1914, 2,500,000. During the same time, moreover, the breed had greatly improved, and there is therefore a greater profit per head. Nor is it not only large farms that have profited by the change. The small holdings are more intensively cultivated than the large ones, so that in 1909 the number of hogs on holdings of a few hectares was three times as great, in proportion to the area, as on holdings of from thirty to sixty hectares.