About domestic agricultural co-operation in the gazdálkodás journal V.

Troján, Szabolcs – Tenk, Antal

Keywords: weakening cooperation, integration vacuum, marketing based coordination

After change of the political system in Hungary, the situation of firms formerly working as part of the various forms of integration changed radically. Due to various objective reasons (lack of capital, discontinued subsidies) as well as subjective ones (unwillingness to cooperate), the role of production companies as integrators practically came to an end. Unlike the strengthening of cooperation in Western Europe, Hungary saw a shift in the other direction. In a short time, a so-called ‘integration vacuum’ appeared in agriculture adding to the already difficult market issues. Consequences of the lack of integration are still felt today. New forms of organisation adapted to the changed conditions and at least minimally meeting the interests of the affected parties have still not been able to develop. The farmers’ associations formed at the beginning of the nineties, due to their limited size and insufficient resources, could not become universal and were not able to take up the role formerly filled in by the earlier forms of cooperation. The integration of small farmers (family businesses) has been an unresolved issue for twenty years now. Experience in this field proves that the situation (business results) of businesses working as part of some form of cooperation is usually better than the industry average. It is also apparent that structures formed as a result of political ‘pressure’ from above are less viable than ones initiated by the stakeholders themselves.
Experts of the field agree that the current crisis of Hungarian agriculture is to a large extent due to the inability to replace old forms of integration with new ones. Integration affects factors such as funding, the security of marketing and the strengthening of competitiveness. This requires vertical forms of organisation which incorporate the financial sector and are able to translate information about the market into changes to the structure of production, as well as have sufficient capital to allow it to finance relatively quick changes (flexible adaptation). This, however, presumes a change of perspective not only on an industry level but also on the level of the entire society, especially as concerns the concept of joint effort (‘cooperation’). In the absence of the necessary cooperation (which is currently typically lacking), it is especially small and medium-sized farms whose future is insecure in today’s increasingly globalised world.