Western European models and the possibility of adapting a structure based farm regulation in Hungary

Orlovits, Zsolt — Kovács, László

Keywords: agricultural farm as a production and a legal unit, establishment and transferring the dispositional authority of the farm

The legal definition of agricultural business combines all the resources of production into one legal unit, an aggregation of property (universitas rerum). In the present time in Hungary, however, this is not the case. Land trade is exclusively based on plot trade, therefore the inventory of the business and transactions (purchase, rent of business) that are based upon that inventory do not refer to the whole of the agricultural business.
Regulation of business can significantly enhance the transparency of business forms. In a regulation system every agricultural enterprise has its farm or farms registered to that particular enterprise, but one farm cannot be assigned to more than one enterprise (principle of farm sameness). Supplemented by certain other criteria of farm establish-ment (e.g. professional certification, local residency), this type of regulation is effective in restraining speculative transactions (during purchase, rent and inheritance of land, farm buildings and equipment) and disintegration of viable farms.
The creation of a new farm regulation enables the legislator to remove some of the burdens of the multifunctional, complex law on the land market, because that is bur-dened with many potential interpretations at its present form. Since the Civil Code, as a principle, treats all sectors in an equal manner, the new farm regulation should directly refer to certain areas of civil law as well. For the case of dividing an agricultural business, specific measures are needed in family law (dissolution of matrimonial property) as well as in inheritance law. Given a farm-based regulation (a farm is considered a unit), the credit standing of an agricultural business rises because for mortgage loans, the total trade value of the whole business is calculated as a backing.

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