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Farm leader: Crisis looms as Hungarian productivity is low

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Low producer yields and livestock kept at high losses are at the root of problems facing Hungarian agriculture, according to the head of the country’s leading agrarian federation, interviewed in daily Magyar Nemzet Tuesday.

A crisis is threatening Hungarian agriculture as the productivity of domestic farmers remains below that of their foreign competitors, warned Gábor Horváth, general secretary of the National Federation of Agricultural Cooperatives and Producers (MOSZ), the agrarian federation primarily grouping the country’s larger producers. Crop yields fall far short of potential, he said, while livestock breeders suffer the effects of maintaining animals for excessive periods due to low market prices.

“It can be stated for certain that this year’s agriculture will not bring the results we managed to achieve in the years following accession to the EU,” Horváth told Magyar Nemzet. He observed that producers receive extraordinarily meager assistance from agricultural policymakers, who have failed to convert promises into reality.

At the same time, Horváth criticized the introduction of a policy obliging farmers to keep livestock, which he said agricultural authorities had “sneakily” linked to the granting of subsidies, fearing a fall in livestock populations. Domestic farmers working with outdated technology and high production costs, he argued, would do better to “get off the hamster wheel of animal husbandry” – and would have done so were it not that subsidy conditions compelled them to maintain a loss-making activity.

Low agricultural procurement prices are causing problems for producers across Europe, but in Hungary the obligation to keep animals results in even lower prices, opined the MOSZ general secretary. Due to the obligation, he observed, meat processors need not fear farmers giving up livestock breeding, and subsequently have had no trouble knocking down procurement prices.

Horváth also foresaw a problematic future for domestic crop production, noting that “we have to move beyond the widespread analysis of the situation that, despite variable quality, the grain crop in 2016 is acceptable because prices are cheap.” He added that the competitive position of domestic grain producers is further weakened by the EU having essentially opened up its markets to Ukrainian agricultural products, putting considerable pressure on Hungarian grain production.

The extent to which Hungarian producers are exposed to grain price fluctuations is apparent in the fact that more than half of domestic arable land is given over to grain, noted Magyar Nemzet. At the same time, yields per hectare of leading EU grain producers are routinely 40-50% higher than what Hungarian producers can achieve.

Horváth emphasized that grain producers must realize that the situation is more problematic than that facing animal husbandry. Consequently, he added, the question again arises of how Hungarian cropland can be exploited in the most profitable way.

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