An evergreen item on Hungarian conference agendas is a lament about how far Hungary lags behind Western competitors in terms of productivity. Whether it is about manufacturing or construction, the verdict is the same: poorly organized workflows, low work ethic and inefficient use of resources keep performance low.
Agriculture professionals have nothing to be cheerful about, either. The latest Eurostat figures showcase that while labor productivity increased in 13 EU countries year-on-year in 2024, with Latvia topping the chart (at an impressive +47%), Hungary was second worst with a decline of more than 15%.
At first glance, a lack of funds can’t explain the gloomy reality of the sector. This year, calls for proposals worth HUF 790 bln should be published for agricultural and rural development. Krisztián Molnár, an agricultural engineer at Poliext Kft., stresses to the Budapest Business Journal that while ever more government funds and monetary instruments are available, their use is oftentimes not purposeful.
“A farmer might purchase a precision farming machine but lacks the knowledge and infrastructure to operate it properly,” he says. “This highlights the importance of thinking in systems, ensuring that knowledge transfer and professional consultancy accompany technology investments.”
Poliext does just that: it offers a range of services from planning to production and deployment, not to mention interactive workshops to equip farmers with the knowledge to operate such systems. The high initial investment costs deter many from transitioning to digital solutions. However, as Molnár explains, they should instead look at the full impact of such developments.
“In traditional irrigation, water losses can reach 30-40%, and the energy costs of operating these systems are often twice as high as those of smart, precision irrigation systems,” he notes. “Farmers hesitate to adopt new solutions, failing to consider the significant differences in operational costs and plant health benefits.”
One of the key factors that impact the probability of applying precision farming methods is farm size. But this is a century-old trend: new technologies are first adopted by large estates. These enterprises have the resources to test what is truly beneficial and what remains relevant only to a niche segment.
As the expert adds, they are willing to take risks despite uncertainties, and their experiences later inform smaller farms looking to implement precision solutions. In the case of farms of more than 1,200 hectares, nearly all apply at least one element of new technology in Hungary, but apparently not efficiently enough. Interestingly, adoption can come down very much to age as well.
“Wherever the younger generation has taken over or is actively involved, integrating modern, digital solutions into everyday farming operations is far easier,” Molnár highlights. “In cases where the generational transition is slow or absent, farms typically use digital solutions only for administrative purposes, missing out on the productivity gains digitalization can bring.”
Infrastructure limitations, particularly in rural areas, also present obstacles. Inadequate digital infrastructure can hinder the implementation of data-driven precision farming techniques. However, initiatives by the Hungarian Agricultural Economics Institute and the European Innovation Partnership (EIP) aim to bridge this gap by fostering collaboration between farmers, researchers, and agribusinesses.
The potential is enormous. Currently, just 8% of Hungarian farms use precision farming solutions actively. That figure is 25% in the EU, and when it comes to corn or grain production in the United States, the ratio is more than 50%. The global precision agriculture market is also set to surge by some 10% a year through to 2033 to hit USD 21 billion.
Molnár further emphasizes that “sensor-based data collection and production management are no longer futuristic concepts.” In controlled environments such as greenhouses and plastic tunnels, sensors have been used for years to manage irrigation, nutrition, and plant protection.
Open-field farming and livestock management are now catching up, employing sensors for tasks such as frost protection and atmospheric drought mitigation. Without these tools, precise and efficient intervention would be impossible, and incorrect usage could “cause more harm than the weather conditions themselves.”
Data collected by sensors serves as the perfect basis for AI, which is, at the moment, more of an advanced data management tool that requires human oversight rather than something making autonomous decisions, the expert explains. However, it has already significantly eased the workload of experts and will continue to do so.
“With the increasing volume of production data, individual farmers can no longer process all the information independently. In the future, AI will be an invaluable decision-support tool, working alongside human expertise to optimize agricultural operations,” says Molnár.
Government incentives and EU-backed digitalization policies will likely accelerate Hungary’s widespread adoption of precision farming. It is high time to make it happen as these innovations will not only address the sector’s long overdue inefficiency but also enhance sustainability, reduce environmental impact, and contribute to long-term food security.
Precision nutrient management is another critical area where technology is making a difference. Due to inefficient application, traditional fertilization methods often result in up to 50% nutrient loss. “In conventional methods, fertilizers are broadly applied by tractors, leading to significant waste. Precision solutions allow for gradual nutrient release, ensuring plants absorb them effectively while reducing environmental pollution. These methods also deliver nutrients directly to plant roots, minimizing competition from weeds and maximizing efficiency,” says Krisztián Molnár of Poliext Kft.
This article was first published in the Budapest Business Journal print issue of March 21, 2025.
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