Hungary Newsflash Week 44

Nieuwsbericht | 30-10-2020 | 13:30

New subsidies, environmental protection, foreign investment and the effect of COVID-19 on the flower trade - The week in Hungarian agriculture

Close-up of purple chrysantemum flowers — As All Saints' Day/Day of the Dead is approaching, the annual holiday flower trade season is about to start. Out of the flowers with large blossoms sold in this season, around 70% is usually chrysanthemum. This year, as with is the case with many other sectors in the economy, the chrysanthemum trade and the horticulture sector as a whole, was affected by the pandemic.

Drought announcement: The whole country was water-stressed in 2020

According to the relevant damage compensation regulations in Hungary, drought damage compensation can only apply in the case of agricultural production if the competent minister officially announces the status of the water-stressed state of a region until October 31 of the respective year. In line with this regulation, Minister for Agriculture István Nagy declared the entire territory of Hungary water-stressed for the year 2020, which means that every producer, regardless of their region, will be eligible for drought damage compensation for this year.

While the global pandemic was a challenge in 2020, due to the changing climate, weather extremities also caused substantive disruptions in Hungarian agriculture. You can read more about this here and here.

New subsidies: Rural agronomist aid and wine technology investment

On Tuesday, the government announced the expansion of a grant scheme for the National Chamber of Agriculture (NAK). The €21.2 million grant package which NAK was awarded for information services for rural farmers on accessing EU funds has now been extended until 2023 and its budget has been boosted by an additional €27.1 million. NAK maintains a rural producer information network composed of 220 rural agronomist offices aimed to provide farmers with information on EU subsidies.

Meanwhile, a new subsidy for viticulture, funded from the European Agricultural Guarantee Fund has been announced on Wednesday. The subsidy will be available for producers investing in wine production machinery and technological infrastructure. For more on Hungarian wine production, see our recent article over here.

Fruit tree nurseries in a tight spot

For the third year in a row, Hungarian fruit tree nurseries have been facing serious market difficulties this season, reports the news portal Magyar Mezőgazdaság in their interview with Zsolt Palesits, president of the national foundation of fruit tree nurseries. According to Mr. Palesits, the spring frosts proved to be so devastating this year that especially in the Danube-Tisza Interfluve region in South-Central Hungary, the fruit crop harvest has practically been destroyed in bloom. Even apple and plum yields were severely damaged even though they are the latest blooming in the season. In turn, the shock reached nurseries with a drastic drop in demand for fruit tree saplings. Mr. Palesits also commented that unlike many other sectors, nurseries did not receive special subsidies from the government in order to cope with their difficulties and that machinery grants could only allow growers in the sector to procure tractors, not specialized nursery equipment. Growers have to juggle production, marketing, sales and take risks because fruit growers routinely do not order grafting in advance, which causes financial uncertainty to nursery entrepreneurs.

A young tree in a nursery — Because of weather extremities, the fruit sector is struggling - And tree nurseries are also hurting, as they have now faced the third year of hardship in a row.

Flowers and the pandemic

With All Saints’ Day (Day of the Dead) approaching on November 1, the high season of the horticultural flower sector is about to start. Every year, the Day of the Dead is celebrated by placing candles, wreaths and flowers at the graves of passed away family members and friends, which means that a huge portion of the annual flower trade is concentrated around the October-November period.

In the case of the popular flower chrysanthemum, which makes up for 70% of the large-blossomed flower trade, 60% of the sales take place in October. Because of uncertainty around the pandemic, this year, flower growers only planted around 17 million chrysanthemums instead of the regular 20 million. On average, the domestic populace buys 12-13 million flowers from the large-flowered breeds (Palisade, Creamis, etc.) and 1.5-2 million of the smaller ones.

This year, the flower scene shows a mixed picture. In Budapest and the west of the country, chrysanthemum prices are higher but in the south and east, especially around Szeged, (a region strong in chrysanthemum growing), prices are much lower.

Chrysanthemum growing, due to the seasonality of the market, operates on a tight schedule. This year, an added difficulty was the increase of input costs (propagation and chemicals). Due to this and the general effects on the economy, horticulture generally faced a season full of uncertainties.

Nine Hungarian companies to invest €75 million in Serbia

Yesterday, Serbian Finance Minister Sinisa Mali met with Hungarian Minister of Foreign Affairs Peter Szijjártó, who commented that Hungary had supported nine local companies with €25 million in their investments in Serbia. The Ministry announced that the companies will invest in logistics centers, the pharmaceutical industry, fruit processing, and the metal processing industry, mostly in central and southern Serbia.

Mali highlighted that the nine companies’ arrival in Serbia was great news and a good signal from the Hungarian government, especially during the coronavirus pandemic. He added that they would hold a joint meeting with representatives of all the companies so that they could start operating in Serbia as soon as possible. The ministers also discussed the two countries’ cooperation in large infrastructure projects, with a special focus on the modernization of the Subotica-Szeged rail line.

New environmental program to be proposed in parliament

The new, 5^th national environmental strategy will be introduced in parliament in January, reports the news portal Agrárszektor. The new policy will include various new or updated elements. On the front of air pollution, an open meteorological data policy and a new air pollution program have been approved in 2020, which will be augmented with a new monitoring program on the changes of air pollution and its effect on ecosystems. Noise pollution will also be addressed, based on updated nation-wide noise pollution maps and with revisions to the relevant regulations.

Various new nature protection plans are in the works, and Minister for Agriculture István Nagy highlighted that the new national biodiversity and gene conservation center, founded in 2019, is now fully operational. This institution is part of a four-year gene conservation plan. Furthermore, various EU-funded projects will launch before May 2021 as a part of the domestic implementation of the EU’s Biodiversity Strategy 2020.

Minister Nagy commented that for the Hungarian presidency of the Committee of Ministers of the Council of Europe between May and November 2021, the case of the environment will be a priority, putting on the environmental agenda topics like landscape protection, the protection of habitats, the fundamental right to a healthy environment, and sustainable development. According to the minister, the task of creating a new strategy for the protection of biological diversity in the period of 2020-2030 would be paramount.

Photo credit:
"Chrysantemum" by _Alicja_ via Pixabay
"Nature tree nursery" by Khaled H. Shihab via Pixabay