The first year of Hungarian agriculture in the European Union

Kovács, Gábor – Udovecz, Gábor

Keywords: Joining the EU, Common Agricultural Policy, agricultural incomes, competitiveness, cash-flow aspects

For Hungarian agriculture a long period of preparation has ended in May 2004 and the rules and orders of the Common Agricultural Policy of European Union within certain limits have become applicable. This study examines the development of incomes in agricultural and the role of positive and negative factors affecting them due to having joined the EU. The earlier factors include primarily increases in agricultural supports, new opportunities for applying for funds, moderation of spontaneous market fluctuations, a foreseeable legislative environment of increased stability and increased income for the producers. The negative factors include support-payment problems deriving from unprepared systems of institutions leading consequently to lack of funds, deterioration of competitiveness (hopefully transitionally), decline of animal husbandry and decline of export-import balance. Although a number of positive factors was balanced by a number of unpleasant “side-effects”, agricultural incomes in the past five years increased to the highest level in 2004. With respect to the future, it can be forecast with confidence that well-managed and well-specialised farms will become the winners of Hungary’s accession to the European Union once the systems of institutions are stabilised and markets are organised.

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