The present state and future prospects of the Hungarian agricultural economy

Kapronczai, István

Keywords: critical points, market potential, land policy, common agricultural policy, development of irrigation, food processing

In the last two decades Hungarian agriculture had not been in such a favourable economic condition as in the last three years. The positive development of the situation can be contributed to the increase in production prices of agricultural products, to the EU support system and the stable operating structure of the last twenty years. In contrast, the critical point of the domestic food economy is the situation of the food industry. The level of production has been reduced, its profitability is low and the capital is insufficient. As foreign capital has been drawn out of the sector, the share capital has also been reduced as domestic entrepreneurs have not been able to make up for the capital loss.
For the future positioning of the agricultural sector it is most useful to define those strategic questions which provide the possibilities and risks. Among them, the following could be high-lighted: market potential, land policy, common agricultural policy, development of irrigation and food processing. In particular, with regard to market potential the export rates of semi-finished and finished products should be increased. If only raw material is exported, the job op-portunities are leaving the country as well. Land policy also has possibilities and potential risks. The social impacts mean positive returns, while its economic consequences carry risk. The latter can be balanced. The Common Agricultural Policy for 2014-2020 carries a greater risk, mainly due to the fact that the EU Member State decisions may lead to significant differentiation of support to certain plant groups. The Hungarian decisions related to this issue are rational and point in the direction of maintaining the status quo. Finally, the revitalisation of the irrigation capacity should be a strategic objective, but it should be recognised that irrigation is economic only if specified conditions are met.

Full article