Expected income of Hungarian crop production companies after EU accession

Gergely, István – Tenk, Antal – Szentirmay, András

Following EU accession the income of crop production companies may increase significantly due to increased support. In addition to increased cereal subsidies, the system of intervention buying may further increase, perhaps even double the value of produce per hectare, while at the same time it allows company income to be more easily predictable. The price of sunflower seed is not regulated therefore the income from its cultivation is not expected to change; increased subsidy will be offset by predicted decrease in price. As a consequence of adopting community regulations the income from sugar beat per hectare may rise by 80% due to an enhanced market price, rendering the sector the most profitable. Expected increases in production costs in crop cultivation may exceed the rate of inflation. Due to competition and trends toward production concentration the cooperation of producers and the coordination of their production and marketing will in future be unavoidable.

Full article