Technical Development, Investment Background and the Impact of Agricultural Policy

Kapronczai, István

Keywords: technical development, high tech, investment, credit, subsidies, own resource, workforce, Q10, Q13

This study is the background material used for a lecture given at the April 2017 conference organized by the Gazdálkodás scientific journal. It strives to present a scientifically founded train of thought that address issues related to technical development issues.
This study found that, although the income and investment conditions of Hungarian agriculture have deteriorated in the past two years and the strengthening is not expected soon, there is still an opportunity to generate a relatively intensive investment period. This can be helped by the relatively high producer savings, bank financing capability, low interest rates and the still existing subsidies.
At the same time the investment decisions in practice are in many cases unwise, and are strongly linked to the existence or absence of subsidies. Producers see “money for free” in subsidies, make in their investments accordingly and hence delay their economically needed development or “overinvest”, which also causes economic damage. In addition, subsidies and, consequently, investments have been highly volatile over the years, highlighting the importance of balanced agricultural policy choices.
Developing the intellectual (knowledge-based) potential and strengthening qualifications is an important condition for exploiting the benefits of engineering. Growth theories that the increasing of technical potential means realized profit only up to the point the level of knowledge of the operating human capital allows.
Growth curves flatten once they reach the limits of training, they can not break through. From these points, it is only the joint development of knowledge and technology that brings results. Therefore, we need to think about knowledge-based technical development. The improvement of this is hampered by the fact that most Hungarian producers do not recognize that their competitors have significantly overtaken them in market competition and refuse to learn from them.