New CAP reform – a new opportunity for the Hungarian agriculture?

Törőné Dunay, Anna

Keywords: CAP, reform, payment system, agricultural enterprises, agricultural strategy

In the evaluation of the agricultural sector, either at the macroeconomic or microeco-nomic level, it is very important to take into consideration the measures and the whole system of the Common Agricultural Policy (CAP). The CAP has undergone significant changes dur-ing the period of Hungary’s accession to the European Union (EU) and since. These changes altered the conditions for the entire agricultural sector and its stakeholders; their ability to ad-just capability will determine the success of them and the whole sector.
My research confirmed that a large share of Hungarian agricultural enterprises has insuf-ficient information about the EU’s agricultural rules and regulations; their knowledge is con-nected mostly to the administrative obligations. Those, mainly large, farms which have more knowledge on the possible measures financed by the CAP, or which have higher levels of in-formation, are in an advantageous situation.
According to the proposal of the EC in October 2011, the new CAP reform will bring several changes. Stakeholders in the agricultural sector must be given all the relevant informa-tion about these changes. Policy makers should amend the present agricultural strategy ac-cording to the new preferences, while the farmers and agricultural enterprises should adjust their planning methods to these new rules.
The proposed reform of the CAP may provide a new opportunity to the domestic agri-cultural sector for its convergence process, because the introduction of the new payment schemes will lead to new conditions and new measures in all EU member states. In my Sum-mary opinion, the duality of small-sized farms and large farms should be more emphasised in the Hungarian agricultural policy. Smaller farms are less competitive, but their contribution to the European public goods (i.e. preservation of landscape and environment, rural communi-ties, cultural heritage etc.) is significant. Financial support is extremely important for their survival, but this support should only be given to active farmers. The main function of large farms will remain the same: providing the population with quality food and competitive agri-cultural production.
However, the convergence process may be successful only if all of the stakeholders in the agricultural sector obtain enough knowledge and information about the main objectives and regulations of the reform, and if the institutional background is working effectively.

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