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Tokaj wine region socialization

Main Contributors:

Béla Kuslits

Other Contributors:

Reinette (Oonsie) Biggs, Juan Carlos Rocha

Summary

Tokaj-Hegyalja, a wine region in north-eastern Hungary has undergone a regime shift from small-scale and high-quality wine producing strategy to a low-quality industrialized strategy. For centuries before the regime shift, mostly local families and wealthy individuals owned and operated the vineyards. The high-quality regime was maintained by the high number of wineries, the high level of local ecological knowledge and the access to the European markets where the wines were sold for good prices. After the Second World War Hungary remained under the Soviet influence, and a socialist, authoritarian regime started to govern the country. The vineyards and wineries in the Tokaj region were socialized and became parts of a large, state-operated winemaking company following a highly quantity-oriented strategy in wine-production and selling the wines in the socialist (Comcon) countries. First, the industrialized regime was forced by an external power, but later, the regime became stable as the number of wineries decreased, the local knowledge wasn't used any more and the vineyards were transformed to produce large quantities. Many high-quality but low productivity vineyards have been abandoned and became high biodiversity areas (mostly forests). Even after the political changes in 1989 the stable state remained intact as the most important factors sustaining the high-quality regime were lacking. This regime is maintained by a high demand for cheap wine, state subsidies and the missing contacts to the quality sensitive markets. Today, as the former Soviet market collapsed, the region is facing a poverty trap. As Hungary joined the European Union in 2004, the abandoned vineyards became Natura 2000 conservation areas, thus it is difficult to use them for agriculture. However, after the political changes in 1989 the state owned vineyards were privatized and there are more and more private wineries producing high-quality wines. Some of them have gained access to quality sensitive markets and started to operate in a new quality-oriented regime. It's however uncertain whether the region will flip back in the near future to a quality-oriented scheme or if it will remain a marginal strategy.

Type of regime shift

  • Governance change

Ecosystem type

  • Agro-ecosystems

Land uses

  • Small-scale subsistence crop cultivation
  • Large-scale commercial crop cultivation
  • Conservation

Spatial scale of the case study

  • Local/landscape (e.g. lake, catchment, community)

Continent or Ocean

  • Europe

Region

  • North-eastern Hungary, Tokaj-Hegyalja World Heritage Region

Countries

  • Hungary

Locate with Google Map

Drivers

Key direct drivers

  • Adoption of new technology

Land use

  • Small-scale subsistence crop cultivation
  • Large-scale commercial crop cultivation
  • Conservation

Impacts

Ecosystem type

  • Agro-ecosystems

Biodiversity

  • Biodiversity

Provisioning services

  • Food crops

Cultural services

  • Recreation
  • Aesthetic values
  • Knowledge and educational values

Human Well-being

  • Food and nutrition
  • Livelihoods and economic activity
  • Cultural, aesthetic and recreational values
  • Social conflict
  • Cultural identity

Key Attributes

Spatial scale of RS

  • Local/landscape

Time scale of RS

  • Years

Reversibility

  • Hysteretic

Evidence

  • Contemporary observations

Confidence: Existence of RS

  • Speculative – Regime shift has been proposed, but little evidence as yet

Confidence: Mechanism underlying RS

  • Speculative – Mechanisms have been proposed, but little evidence as yet

Alternate regimes

Small-scale wineries, High Quality

There are around 5-6000 acres of small-scale vineyard in the region. There is no forest on the mountains, the soil is thin and rocky, people are growing grapes on steep hillsides - in many cases by hand. The local families and wineries are cultivating, harvesting and producing wine independently. The knowledge and tradition about wine making is well distributed among the local people, there is enough capacity for experimentation, adaptation and learning.

 

Large-scale winery, Large Quantity

In this regime, the vineyards are transformed to produce large quantities. They are cultivated with tractors, the whole procedure is centralized and coordinated by the state-owned company in a very cost-effective way. The wine is exported to the Comecon countries. The yearly harvest per plant is sometimes up to ten times bigger than before, but the wine quality is much lower.

Drivers and causes of the regime shift

The regime shift happened after the Second World War, as Hungary became part of the Eastern bloc. The national economy was transformed to planned economy and became dependent on the Soviet Union in many ways. The Soviet Union had an enormous political influence in the country, there was no way to argue or resist. In Tokaj-Hegyalja first all the vineyards were socialized in 1948, than starting in 1953 all of them where transformed to produce larger quantities. The region started producing wine only for the Comcon market, there were no real market processes present during the dictatorship.

How the regime shift worked

Before 1948, most wineries in the region were small-scale. There were two important feedbacks maintaining this state. The first is the high level of knowledge maintained by the high number of wineries and the constant experience in making good quality wines. The knowledge level of the local community is a slow variable in this system. The second important feedback loop is the access to the quality sensitive markets, which makes it possible to sell the wines for a high price, which enables investment in technology and workforce. These factors have a key importance in long-term success.

After the Second World War, Hungary became part of the Eastern bloc. As the Communist party (supported by the Soviet Union) took over the political power, planned economy was introduced and Hungary became isolated from the Western European countries. People in Tokaj-Hegyalja were forced to join the co-operative.

As the number of wineries decreased (to practically one single company), and the connections to the European market were cut, new feedbacks started to dominate the system. In this setting, the most important factor generating revenue is the quantity of the wine produced. The cheap wine was sold to the Soviet market and the unprofitable local economy was subsidized by the state. The change was first forced by political power, but lately it became persistent as in the coming decades the local society lost most of its traditional knowledge and adopted the socialist wine making strategy. This loss of knowledge and the loss of former markets are the two most important factors behind maintaining the intensive cultivation method even after the political "regime change" in 1989. From this perspective, the political change in 1989 wasn't a regime shift at all. Though the steep and rocky hillsides are the best places to produce high-quality wines, the cultivation on these vineyards is expensive and the amount of grapes harvested is low, thus many of the best vineyards were abandoned after the regime shift. These places became natural habitats, often high biodiversity forests in the coming decades. Today these places are Natura 2000 conservation areas, which makes it difficult to reintroduce wine production. After 1989 the Soviet market was also lost. The state-owned vineyards were privatized, but the successor of the big socialist company remained dominant player in the region. Today, this company is buying up the grapes produced on the privatized vineyards, and the produced wine is sold for a cheap price. There was a small change in the economic structure, but basically the system remained intact: buying up the grapes, the state is still subsidizing the intensive wine producing strategy. Approximately 70% of the region is following this strategy today. The other third tried to produce higher quality wines, but many of them fail to reach the quality sensitive markets, therefore they aren't profitable. As the world winemarket is very competitive, it is a major challenge for the region to make a living by producing wine, thus Tokaj-Hegyalja is today in a poverty-trap, similarly to many regions in post-soviet countries.

Impacts on ecosystem services and human well-being

Wine production is a fragile process where a major part of the work is "done" by the soil and the grapes. As the vineyards were transformed, the ecosystem services were also transformed: before the regime shift, the grapes consisted of a wide variety of minerals, sugars and aromas to make high-quality wine. This was not possible to maintain when producing high quantities: under this conditions the plants are not capable of concentrate the minerals and nutrients in the grapes. The new ecosystem service was a production of large masses of grapes. In the past decades, the abandoned vineyards transformed to natural habitats having rich biodiversity and thus these became part of the Natura 2000 network (EEA 2013), which is also stabilizing the state after the regime shift.

Due to the regime shift, cultural ecosystem services were also lost. The aesthetic, recreational and cultural values associated with the high-quality wine decreased dramatically. The knowledge maintained by the human-nature interactions was also lost. The long-term effect of the regime-shift on human wellbeing is a "poverty trap". Local people have some revenue from the quantity-oriented production, which is high enough to stabilize the system-state, but not enough for development, neither in the viniculture nor in their living standards. The regime-shift gained only political benefits.

Management options

Three major interventions are needed to restore the desirable regime in the wine-region. First is to educate local people about more competitive, high-quality winemaking methodologies and to invest in those technologies, which are required to produce better wine. The success of an education programme is highly dependent on the personal relations and trust among locals. The second is the restoration of the abandoned but formerly high-quality vineyards in the area and raise the quality standards on the winemaking process. The third intervention would be a better marketing for the region to reconnect it to the markets, but it is only possible if the communication and trust among local groups is increased to ensure better collaboration.

Key References

  1. EEA. (2013). Natura 2000 data - the European network of protected sites. 03.09.2013. Retrieved from http://www.eea.europa.eu/data-and-maps/data/natura-4
  2. Hegedűs, S. (1908). Kimutatás a Tokaji borvidékhez tartozó községek szőlőterületéről és borterméséről az 1900-1907 években. In Királyok Boráról Borok Királyáról Tokaji Nektárról Folyékony Aranyról. Tokaj: Frankel Dezső Villanyerőre Berendezett Könyvnyomdája.
  3. ICOMOS. (2002). Tokaji Wine Region (Hungary).
  4. Nyizsalovszki, R., & Virók, V. (2001). Területhasználat időbeli változásai és következményei egy tokaj-hegyaljai településen. In Földrajzi Konferencia. Szeged.
  5. UNESCO. (2002). Decisions Adopted by the 26th Session of the World Heritage Committee.

Citation

Béla Kuslits, Reinette (Oonsie) Biggs, Juan Carlos Rocha. Tokaj wine region socialization. In: Regime Shifts Database, www.regimeshifts.org. Last revised 2017-02-07 12:46:05 GMT.
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