The situation of Hungarian agricultural economy

Kapronczai, István – Udovecz, Gábor

Keywords: agricultural and food markets, stabilizing factors, lack of future oriented management, insecurity

The financial and economic crisis which began in 2008 and became deeper over the second half of the year caused serious loss of market in the Hungarian national economy. The foreign market for industrial products shrunk, and the lack of effective demand caused a crisis for the construction industry. In these industries, unemployment rates soared. The crisis had a smaller effect on food economy, primarily because the drop in demand affected food products the least.
We may therefore conclude that food economy may be a stabilizing factor in finding a way out of the crisis. This is supported by the fact that the product output of the agricultural economy increased significantly in 2008 – effectively, this was what enabled the increase in GDP – even though the rate of increase was only 1%. Additionally, the positive balance of foreign exchange on food products, which amounted to nearly EUR 2 billion in 2008, was a significant contribution to the country’s balance of foreign exchange. In the agricultural and food markets, there was no drop in demand in the last months of the year, or even thereafter. From a market perspective, recession in the agricultural sector is not unavoidable at all. On the contrary, a growing agricultural sector could significantly contribute to new investments, provide employment and livelihood for the rural population, and last but not least, help call down the significant funds offered by the European Union, which is important in the interest of the national economy.
Opportunities may however be missed due to the fact that future oriented thinking is lacking throughout the vertical food chain, which is characterised by a vision of the future filled with risks.

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