A review of domestic organic production

Gyarmati, Gábor

Keywords: organic farming, subsidies, domestic and export market

Domestic organic farming embarked on a course of major growth at the turn of the millennium. Since 2004 the number of farms and the growth rate of the size of organic farm land have decreased, followed by recession. The majority of organic farms are either big farms with good quality lands and managing parallel production or committed small farms with insignificant economic impact. Some farmers retooled their bad quality lands to organic production in order to receive subsidies. The ratio of grass (53.6%) is higher and that of arable land (26.4%) is lower than in agricultural production. Grass lands are easily converted to organic land but their economic value is not significant. In crop structure, cereals (49.8%), oil plants (19.3%), and fodder plants (26.4%) are dominant. Like the agricultural production characteristic of Hungary, cereals and oil plants have the greatest economic importance in crop structure. Cattle and sheep are significant in animal husbandry. The role of pork is not great. The production of fodder plants is cheaper than animal husbandry, therefore the number of livestock is not significant. As a result, the necessary supply of organic dung for soils becomes doubtful. Hungarian organic farming is export oriented and the domestic market is small. The majority of organic farmers produce for German-speaking countries (Germany, Switzerland, and Austria). Few stable partner relationships were established in the organic trade, because the majority of export products consist of unprocessed cereals and fodder plants which can be easily substituted. The ratio of processed, “hungaricum” products is insignificant in the product structure. There is sharp competition in West European organic markets, requiring a response from Hungarian producers and traders.

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