Hungarian agriculture on the eve of EU accession

Antal, Katalin – Guba, Mária – Kovács, Henrietta

On the eve of Hungary’s EU accession it is reasonable to review the objectives of the agricultural policies of recent years, their implementation and the progress of Hungarian agro economical development under the influence of legislation aimed at its enhancement.

Hungarian agricultural policy objectives after the change of regime were included in government programs. The basic principles of agro policy have been drawn up in the act of parliament of 1997 concerning the development of agro economics. According to this the main objectives were improvements in the competitiveness of production; changes in conditions of agricultural production and market regulations to satisfy home demands of provisions primarily from home products in adequate quantity and quality. Important objectives were the establishment of equal opportunities with respect to other branches of national economy, the rational exploitation of relatively favourable natural and economic resources, to assist export oriented production, the enhancement of country people’s motivation to remain living in the countryside, and the assistance of agro innovations.

In the forward of the 1997 act it has been stated that agriculture, the primary processing of agricultural products, forestry, game keeping and fisheries are branches of the national economy to be preferentially developed and the development of national economy, its transformation and modernisation is possible only if it is accompanied by an increasingly effective agricultural sector.

Hungarian agro economy reached its lowest level in 1993 four years after the change of regime. It has (or should have) taken ten years to measure up to market competition, to home and foreign value judgment in conditions of ever more liberalised commerce. Agro producers had to learn to adapt to the cessation of former dependability; the relative stability of produce marketing, attainable prices and produce income. A further significant change was the enhanced role that markets and prices played in the volume and structure of production. On the basis of the geographic nature of available land, accustomed production practices and accomplishments, EU accession highlights ever more clearly the need for the development of agro economy and enhancement of its efficiency in the interest of developing and modernising the national economy.

What are the characteristics of Hungarian agro economy?
- During the period of time examined the growth of gross production lagged behind that of the world and members of the EU. The present volume of production is the same as that four decades ago.
- With exception of a single year, subsidies to agro economy from the central budget exceeded that prescribed by legislation.
- Although yearly sums of agro investments at current price levels have increased significantly, expressed in relation to a volume index they increased hardly at all.
- The income of agricultural entrepreneurs practically halved by 2002, the majority of production efficiency indices remained stagnant and they lag significantly behind the EU average.
- The income of agricultural employees has increased in real terms, but they do not approach the income of those employed in other sectors of the national economy.

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