Motivation of agricultural producers of animal products

Béládi, Katalin – Kertész, Róbert – Dudás, Gyula

Keywords: animal husbandry, lack of income, vision, motivation of producers

Animal farming in Hungary has been on a constant decline since 2004. Its share in agricultural output has been at 37-38 per cent for years, and the number of animals is declining. This is closely related to the fact that revenues in the major branches of the industry are insecure and fluctuate significantly from one year to another. Purchase prices often do not cover product costs, farms rely on the governmental subsidies to make a minimal profit. Average values are derived from data obtained from businesses with varying quality of production: some are profitable and competitive, while others lack initiative ad are usually unprofitable. One may justifiably wonder about why these businesses – especially the latter group – remain in existence. Our research was based on interviews conducted with farmers at the AKI to find the answer to this question.
To a significant degree, motivations are not industry specific, as people living in the countryside have a deep love for animals and are reluctant to give up their lifestyle as animal farmers. Many remain in the industry due to the lack of alternative jobs and the pressure of family finances. In family businesses, agriculture, including animal husbandry, often serves as an additional source of income. In larger farms, animal husbandry operations are often sustained in order to retain existing employees. This may be seen as a welfare network of sorts – but then profitability is hardly an applicable requirement. The main criteria for competitive farms are efficiency and profitability of productions; if they are unprofitable for a longer period (3-4 years), they are wound up. Winding up a business, however, also has its costs. Animals can be sold, albeit at less then what they are worth; buildings and equipment, however, cannot, so farmers must bear the costs of amortisation and maintenance. Obligations resulting from earlier loans and subsidies are another source of costs. An important finding was that – especially with smaller farms – the future is insecure because they have nobody to take over and continue the farm. The future is insecure for many of the large farms as well because they are not able – and sometimes not willing – to meet the strict environmental and health requirements.

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