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Mar 01, 2021 - Zoltán Kovács

Where does the EU money go? To small- and middle-sized farming businesses!

A recent report from the European Greens has a rather loose relationship with the truth when it comes to Hungary’s agricultural support regime. Here are some facts.

 

In a report published last week on agricultural subsidies in Hungary by the European Greens Group in the European Parliament, entitled “Where does the EU money go?”, the ill-informed author, a certain Leonárd Máriás, who is better known in Hungary as a regular contributor to staunchly anti-Orbán news sites like Mérce and – Soros-funded – Átlátszó.hu, makes a series of factually incorrect and biased statements.

The report, which takes aim at the agricultural subsidies regimes of Central and Eastern European countries, can be best described as a tsunami of lies with complete disregard for the facts, and seems to be gunning for the European agricultural model as a whole. At the present stage of negotiations regarding the Common Agricultural Policy, the report clearly targets agriculture and farmers, similar to previous attacks waged by the European green parties. 

The author of the chapter on Hungary ignores the hard fact that Hungarian farmers know very well how to access agricultural grants. In fact, every year almost 170,000 Hungarian farmers have access to direct EU grants in the magnitude of hundreds of billions of forints. Since 2015, as many as 216,000 applications were awarded grants as part of the Rural Development Program.

A significant percentage of the EU grants disbursed in Hungary are normative, which means that the size of the grant depends on the number of hectares of agricultural land or the size of the livestock portfolio, as well as on whether farmers comply with a series of regulations. If the size of the area or livestock herd conforms to the rules relating to the awarding of grants, farmers receive the subsidies they’re entitled to. There is no room for individual criteria, subjective likes or dislikes, or deliberation on any other grounds.

The authors also conceal the fact that, from among the 27 EU Member States, Hungary adopted one of the strictest regimes, establishing a rule that large farms of more than 1,200 hectares are not eligible for standard area-based subsidies. In the case of the Rural Development Program’s agricultural investment grants, Hungary allocated 80 percent of funds to small and medium-sized family businesses, while large businesses could only apply for a maximum of 20 percent of the total package. What’s more, in the agricultural and environmental management program, we introduced a degressive regime that favors small farms.

As a vital element in the operation and transparency of the system, Hungary has one of the most stringent and sophisticated monitoring systems in relation to the disbursement of agricultural subsidies, which is not only subject to strict accreditation but is also regularly reviewed by the European Commission and the European Court of Auditors. Therefore, anyone who attacks the Hungarian agrarian grants regime is in fact going after the very foundations of the European system of agricultural subsidies that currently favors farmers.

The following facts – which clearly refute the claims made by the European Greens – testify to the main priority of Hungary’s farm policy, namely the strengthening of small and medium-sized farming businesses.

Fact #1

Since 2010, the structure of farm land ownership has undergone a significant change; parallel with a fall in the use of land by large farming businesses, the area of land cultivated by viable small and medium-sized businesses has increased. While in 2010, individual farmers cultivated 2.5 million hectares of land, in 2019 they cultivated more than 3.2 million hectares, accounting for 61 percent of Hungary’s agricultural land. Between 2010 and 2018, in harmony with the government’s agricultural policy, the total area of farming businesses that are cultivating more than 1,000 hectares decreased by almost a third, while the territory of businesses cultivating between 20 and 200 hectares decreased by 12 percent. At the same time, farmers working land between 200 and 500 hectares cultivated 28 percent more agricultural land than in 2010.

Fact #2

Between 2010 and 2015, Hungary offered up 250,000 hectares of land for lease. Since 2010, the number of farmers renting state-owned land has risen from 600 to above 7,000 – in contrast to the practice of previous governments characterized by a low rate of land use by a handful of farmers, a practice that clearly favored large holders. Today, almost 85 percent of state-owned land is cultivated by natural persons, small-scale producers, individual agricultural entrepreneurs, family farmers and young agricultural producers.

Fact #3

Within the framework of the “Land for Farmers” Program conducted in 2015-2016, 30 percent of registered Hungarian farmers, almost 30,000 people, acquired landed property. It’s a fact that those bidding in the auctions purchased 2 properties on average, while 60 percent of bidders purchased less than 50 hectares, and 50 percent less than 20 hectares. Only 9 percent of bidders purchased areas of more than 100 hectares. It goes without saying that primarily local farmers were eligible to acquire landed property. Based on the pre-emptive system, non-local bidders were only allowed to acquire land if local residents did not submit bids.

In 2020, in two stages, state-owned plots of less than 3 hectares and areas between 3 and 10 hectares were offered for sale in open tenders, in harmony with the measures designed to phase out undivided shared land ownership.