A Comparative analysis of Hungarian And Eastern German Agricultural Incomes

Baráth, Lajos – Szabó, Gábor

Keywords: agricultural income, Hungarian agriculture, Eastern Federal States of Germany, economic accounts for agriculture, farm accountancy data network

The paper offers a comparative analysis of the Hungarian and Eastern German agricultural incomes categorised by income per hectare. The research is based on data taken from the Economic Accounts for Agriculture (EAA) and the Farm Accountancy Data Network (FADN). The comparative analysis also addressed the role of subsidies and the assumed wage cost of unpaid labourers. It was found that gross and net added values in the Eastern Federal States were in each case comparatively higher, even without subsidisation. The final income categories (net entrepreneurial income and net farm income) were in both economies significantly affected by the subsidies and the assumed wage cost of unpaid labourers. The former factor had a greater effect on the agricultural income categories of the Eastern Federal States, while Hungarian agricultural incomes were more influenced by the latter. If subsidies are disregarded but the assumed wage cost of unpaid labourers is considered, EAA data put the Eastern Federal States, while FADN data put the Hungarian enterprises higher on a scale of profitability. The findings also indicate that if subsidies were discontinued, both Hungarian and Eastern German agriculture would be making losses, although the impact on Hungarian agriculture would be significantly more severe. Consequently the authors venture to conclude that the envisaged drastic reductions of the CAP budget after 2013 will not occur. It is also worth noting that in the post-accession period the basic version of the net domestic entrepreneurial income per area unit calculated from EAA data slowly emerged and was only 10% lower than the corresponding indicator of the Eastern Federal States.

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