Can the agri-food sector be strategic in the Hungarian economy?

Tóth, Orsolya – Garay, Róbert

Keywords: Agri-food sector, strategy, society, employment- and social-policy, market role and function

The Hungarian Research Institute of Agricultural Economics (AKI) held a conference on 8 March 2012 entitled “Can the agri-food sector be strategic in the Hungarian economy?” Because of the complex topic experts were invited from across, and from all tiers of, the agri-food sector. In the debate opinions were presented by experts from macroeconomics, education, agricultural research, farmers associations and the government, and some farmers also shared their views with the participants. The speakers not only attempted to answer the title question, but went further and, being concerned about the future of the sector, pointed out mistakes made in the past, touched on problems long waiting to be solved and looked for options to establish a brighter future for Hungarian agribusiness and rural society.
Concluding the discussion, it was obvious that from several aspects the agri-food sector deserves special treatment; even though its macro-economic role and importance have decreased in parallel with the development of the Hungarian economy. The main statements from the meeting were the following:
Firstly, the agri-food sector could gain more importance in the Hungarian economy if the products were of higher value added, were more hand-made and employment intensive, and fitted more to the export markets. In this way they would add even more surplus to the foreign trade balance. Agribusiness taken as a whole represents 12-13 per cent of Hungarian GDP, of which agriculture accounts for only 3 per cent, which means it cannot be the engine and the saviour of the Hungarian economy, although the agri-food sector can realistically become a success story.
Secondly, it is crucial for Hungary to significantly increase rural employment. More concentrated, targeted support to local food production, more coordination by local government, and giving labour-intensive sectors (i.e. vegetable and fruit production) higher priority would lead not only to a higher employment rate which is one of the priorities of the present government, but also to an improvement in the depleted agricultural output.
Lastly, the political and economic changes resulted in a diffuse, scattered Hungarian farm structure and distribution of land property, and consequently agricultural production lost its international competitiveness. After 1990 the significant changes in the business environment and the ensuing continuous and often disruptive changes to sale conditions and possibilities have left both agriculture and the processing industry in difficult situations. It was agreed that Hungarian agriculture and food industry could regain its former reputation if Hungarian producers would be more willing to cooperate, teaming up to raise their collective bargaining power.

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