Evaluating farm success in Hungary

Udovecz, Gábor – Pesti, Csaba – Keszthelyi, Szilárd

Keywords: agricultural policy, FADN, production structure, investments

Increasing market competition after European Union (EU) accession and the financial crisis from 2009 onwards created extra challenges for the Hungarian food sector. Agricultural producers, food processors and other actors in the food chain developed different strategies for surviving and growing: they changed their production and cost structures, marketing channels and technology.
Our analysis deals with the food economy within the production of agricultural raw materials. It does not examine the average farmers, but looks at the winners and losers of the EU accession. Analysing the long time-series FADN data we sought to answer the following question: which factors distinguish the successful, long-term profitable from the unsuccessful, loss making farms.
Our findings for the recent and current events do not really underpin the hypothetical results what many agricultural experts like to emphasise based on the new Hungarian agricultural strategy. The successful farms manage larger areas than the unsuccessful farms, they keep fewer animals, the feed is produced mainly by themselves and they reduced their livestock numbers during the examined period, but their investments were significantly increased. They achieve higher yields, higher selling prices; and their workers are better paid. Most of the successful farms are led by agriculturally qualified professionals.
Both the professional management (training, consultancy, research, logistics, guiding incentive regulation etc.) and the professional organisations have many opportunities to work out best practice initiatives. However, the farmers themselves could do the most to achieve viable, competitive and sustainable development. They own or rent the land and the forests, they use the water. Co-operation, organising and bargaining power depend on them. They can decide on their production structure, market contacts and their own training programmes.

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