The EU agricultural subsidy system and the Hungarian land market

Alvincz, József

Keywords: SPS, farm system, redistribution of landed property, land turnover, farming regulations

The EU-15’s agriculture is far more stable in terms of ownership and business systems than Hungary’s. It makes sense, therefore, to expect the proposed introduction of the SPS support system in Hungary to have a much deeper impact on income, land prices and rental fees than that experienced by the family farms to the west of us. At the same time, it can also be assumed that this regulatory element will be significant beyond itself; that is, that following fundamental change in the EU market’s rules and regulations, it will leave its mark on the structure of ownership through its effect on arable land prices. The main cause of the uncertainties surrounding introduction of the Single Payment Scheme (SPS) in Hungary can be traced to the backwardness of land redistribution and farming regulations. For this reason, government measures are needed in these areas as quickly as possible. The redistribution of landed property would have a stimulating effect on land turnover and would also bring land prices more in line with value. Improved opportunities for environmentally-friendly agricultural production can also be highlighted as a further favourable effect of land redistribution.
Determining the aims and toolkit of agricultural policy and, within this, determining the guiding principles of ownership policy as well as the land redistribution and farming regulations that serve it, are strongly interdependent tasks requiring swift resolution. It would be possible with such help to increase the international competitiveness of agriculture, positively influencing the agricultural sectors’ population sustaining abilities and, not least, promoting more environmentally-friendly farming than is currently practiced.

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