Hungary: 21st-century problems in the agroeconomy and in the environment

Price increases, laid deep

Which came first, the chicken or the egg? Science tells us eggs came first, by a good 340 million years. This really doesn’t matter though since both are expensive (except for price controlled chicken breast and rump) in the currently ongoing economic crisis that has seen Hungary’s inflation reach 20.1% in September while food inflation already skyrocketed to 34% in March.

Eggs have become particularly expensive this year. Their price range of €0.24-0.34 per piece are two and half times higher than average prices last year. This means that eggs are on the way of having one of the most rapid price increases out of all food products in the country.

According to Agrárszektor.hu, stakeholders list a number of input cost increases as the reason for the price raise. These are mainly our regular culprits: Energy costs, feed costs, and the summer drought.

Inflation and energy prices have had a marked effect on the agroeconomy

The latest AgrárTrend Index report by the MKB Bank and Takarékbank banking companies has stated that the increasing energy prices, inflation and decreasing consumption have shaped the prospects of the companies of Hungary’s agriculture and food industries between July and September 2022.

The composite index measures the performance of the agriculture economy of the country on a 48-point scale. The value for Q3, 2022 is 29.6 points. The last time this value dipped under 30 points was Q2, 2020, during the first wave of the coronavirus pandemic. Q3 also marks a decrease of 0.4 points from Q2, 2022, and a 1.8 point decrease for the entire year.

In the sectors with the largest output within the agriculture industry – Arable crop farming (wheat, corn), oily seeds, field vegetables – demand is still high, and this high demand is catalyzed by the decreased supply: These sectors saw a 25% yield decrease due to the drought.

In the animal husbandry sectors, production drops have so far been relatively minimal, however, inflation leads to a higher level of decrease in the demand for meat and animal products. For this reason, the authors of the study state that for these sectors, efficiency increasing developments are very important. One such example is the dairy industry, which is especially energy-intensive.

In horticulture, vegetable forcing has seen a slightly higher decrease in demand. However, glasshouses using geothermic heating have a competitive advantage and might see new windows of opportunity for export to foreign markets.

One overall trend is the increase in input costs. 70% of Hungary’s agricultural production is based on the usage of oil derivatives.

Sustainability and the long shadow of the metropolis

A new study conducted by a group of researchers at the Corvinus University of Budapest has found that the Hungarian capitol is overburdened ecologically, although this trend is slightly weakening.

From an ecological perspective, Budapest and its surrounding metropolitan area are staggeringly unsustainable: the ecological footprint of a resident in the city is 2.5 global hectares for household consumption, while the ecological footprint of a resident of an agglomeration is almost 3 gha. Taking into account the ecological capital, the city is at 30 times its biocapacity.

The study was published in the Sustainable Cities and Society magazine. The researchers looked at data from the period between 2003 and 2018 and found that while the ecological deficit of Hungary has been decreasing since the beginning of the 2000s decade, the ecological resources of the city of Budapest have been decreasing. The main reasons for this are the decrease of environmental quality, the shrinking of biologically active areas due to urbanization and urban development. In total, the Budapest Metropolitan Area increased its share in Hungary’s ecological footprint from 28.3% in 2003 to 31.5% in 2018.

In general, while the ecological footprint of the larger Budapest area increased, the footprint of the capitol itself moderately decreased in the 2003-2018 period. The rest of the country saw an increase in its ecological reserves, from 13% to 24% according to the study. One main reason for this is the population decrease in the rural parts of the country (Outside of Budapest, the country’s population was 7.4 million in 2003 and 6.8 million in 2018). The other reason is the increased efficiency of agriculture.

Budapest itself, with a population of 1.7 million, is currently the ninth-largest city of the European Union.

The authors of the study suggest that since Hungary has a very urban, aging population, ecological footprint policies should rely on programs primarily focused on the urban areas of cities.

Hook, line and sinker: Environmentally friendly fishing. Sounds like it’s a catch. 

The Hungarian University of Agriculture and Life Sciences (MATE) and two companies, Ergofish Kft. And Czikkhalas Kft. are developing ecologically friendly fishing equipment, stated the consortium to the news agency MTI.

TradeMagazin.hu reports that, first of all, one of the priorities is to replace lead sinkers in angle fishing, a piece of equipment that is toxic to the environment, however, between 6 to 8 thousand tons of it is still used in the EU every year. The new sinker, as well as artificial corn for bait will be more environmentally friendly and made from materials that can naturally decompose in the environment.

As a part of the project, the members of the consortium are also developing farming technologies for two indigenous fish species, the European chub and the Crucian carp, which started in monocultural ponds, however, they will test the methods in polycultural fishing lakes as well in both extensive and semi-intensive fish farming environments.

The project was also subsidized for €1.7 million by  Hungary’s Economic Development and Innovation Operative Program and will end in February, 2023.

Z. Sz.