The current situation of the Hungarian agricultural economy

Kapronczai, István

Keywords: András L. Áchim, land estate policy, role in the national economy, farm structure, competitiveness, vision

András L. Áchim was a peasant-politician at the turn of the 19th to 20th century, a leader of the fight against large estates. This article is based on a presentation at the conference held to commemorate the 100th anniversary of his death. The aim of the article is to describe agricultural economy as it exists today and to try to find the similarities between the challenges faced 100 years ago and those of the current times.
The similarities between the circumstances present 100 years ago and those present today are surprising: distribution of land, the division of large estates; preference for small farmers (family-run farms) over large estates; the employment of poor people (the unemployed) on governmental projects; a demand for a fair tax (support) system; efforts for the establishment of effective labour organisations. There are similarities between the two ages as well, such as the sector being affected by a crisis, the era being characterised by strife and the lack of peace; also, food was of strategic importance in Áchim’s era and is starting to assume strategic importance again.
On the other hand, one needs to be careful with the political opinions - which were very appropriate in Áchim’s era - which attribute a pivotal role to the sector in the development of the Hungarian national economy. One should acknowledge that in advanced – or fairly advanced – economies, agriculture may never be a “leading” sector - but it can be a successful one! This is where the Hungarian agriculture should be heading, and this is what smart and balanced agricultural regime and policy should aim for.
In historic times, as well as today, there has been strong debate concerning the farm size required for a modest livelihood while pursuing various agricultural activities. Calculations based on sector-specific costs and revenues indicate that the requirement for earning a living is 70-100 hectares for field-based cereal production, 7-11 hectares for vegetables requiring a lot of manual labour, and 15-20 hectares for orchards. The corresponding requirement is 30-35 dairy cows plus 30-35 hectares for growing fodder, or an annual output of 800-900 swine for slaughter plus 90-100 hectares of ploughland. By structuring and sizing farms appropriately, one can avoid the situation that certain family-run farms provide work but not a livelihood, while others provide a livelihood but no work.
At the turn of the 19th to 20th century, agriculture had a definitive role in national economies and in the Hungarian national economy as well. Local food supply was of strategic importance because the possibilities for transporting food over long distances were limited due to the traditional methods of food conservation and the underdeveloped state of logistical services. The fast development of the food industry and food logistics only began after Áchim’s era an gave a significant boost to the global trading of food. As a result, agricultural lost its strategic significance, as the food supply of the population could be provided from external markets. Industry and the services sector became the motor of development. The attitude applied today – i.e. that one should produce cheap food products, then package them well – and expensively – because the product will travel a great distance – has developed gradually.
The trends seen over the last five years, however, indicate that the global food trade will be characterised by a demand-driven market in the upcoming years and the issues of food supply and food safety will cause food economy to regain its strategic status.

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