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According an article on the Economic History Association website, An Economic History of Denmark,

Structural development during the 1920s, surprisingly for a rich nation at this stage, was in favor of agriculture. The total labor force in Danish agriculture grew by 5 percent from 1920 to 1930.

This increase in the agricultural labour force was due to an increase in the number of self-employed farmers. While I haven't checked every other 'rich' country (presumably meaning most of Western Europe, North America and Australia), the agricultural labour force declined in the US, the UK, France, the Netherlands and Germany in the 1920s.

The fact that agriculture accounted for 80% of Danish exports would seem to be a plausible explanation for this, until one considers that the land policy

actively supported a further parceling out of land into small holdings and restricted the consolidation into larger more viable farms.

So, why did 1920s Danish governments apparently move in the opposite direction to other 'rich' countries by favouring agriculture in terms of structural development?

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The reason appears to be the devastation, particularly agricultural, that took place as a result of World War I. By the end the war, Germany and the former Austrian Empire were on the verge of starvation, and the Allies were also short of food.

Under such circumstances, food would be particularly valuable, and command higher prices than usual. Denmark was ideally located to serve the relevant geographical markets, and had been spared the ravages of the war.

While "development" policies are sometimes directed by governments, in other instances, it is a matter of individuals taking advantage of, and responding to incentives in the marketplace. The latter appears to be the case here, with small, self-employed farmers. The Danish government's land policy of dividing large land holdings inadvertently amplified this effect.

Such a policy would actually help a Danish agriculture concentrated on high value-added protein products, milk, cheese, eggs, poultry, meat, in which small farms are more of an advantage than they would be for "mass consumption" products such as wheat.

The economic growth rate of Denmark between 1913-1929 was higher than during most other periods in Danish economic history, so it seemed like the country, or its people, made the right choices during that time.

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  • The nitrates reason doesn't make much sense: Haber-Bosch makes them almost cheap and abundant, this Q is about after WWI when explosives were in pretty low demand. Economic restrictions during war and distribution problems as well as manpower shortages after it seem to explain much more than NOx-diversions. Since you already are on the butter ship: look into dairy history of Denmark, Ricardo & Hindhede. – LangLangC Apr 20 '18 at 22:21
  • @LangLangC: OK, removed reference to nitrates. – Tom Au Apr 20 '18 at 22:22
  • Not sure if it's worth raising, and I unfortunately can't remember where I ran into the anecdote, but I vaguely recollect reading once or twice that Denmark had been a major exporter of agricultural products - of pork and fish in particular - in the past few centuries. – Denis de Bernardy Apr 20 '18 at 22:31
  • @DenisdeBernardy: To amplify my point and your comment, Denmark exported high-value added protein products, as opposed to "commodity" products like grain. That's the main difference between their situation and others, IMHO. – Tom Au Apr 20 '18 at 22:44
  • @DenisdeBernardy There's something in what you say. Britain's "massive import of Danish butter and bacon" before WWI made her by far Denmark's biggest export market - 62% of total exports in 1913. This slumped during the war in 1922 it was up to 64%. encyclopedia.1914-1918-online.net/article/… – Lars Bosteen Apr 21 '18 at 0:35

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