Municipal taxes on farmland to be abolished in Hungary

National Assembly abolishes municipal land taxes

In a recent act passed by the National Assembly, municipal taxes on farmland have been banned, official sources told the news agency MTI.

This followed an act by the council of the city of Hódmezővásárhely in Csongrád-Csanád County, in which the city introduced a new land tax to enter into force in January, 2023. The municipal act imposed a tax of about €27 per hectare on farmlands for farmers with holdings exceeding 4 ha. The news portal hvg.hu reported in the end of 2022 that the city expected an income of €213.3 thousand from the tax which the council stated that it would spend on residential utility bill subsidies and support for pensioners.

Telex.hu reported in May that Minister István Nagy had announced that he had received a petition with 120 thousand signatures from farmers’ alliances which demanded the abolishment of the municipal land tax. According to Agrárszektor.hu, on May 19, Minister for Agriculture István Nagy, alongside István Jakab, Deputy Speaker of the National Assembly (Fidesz MEP) and at the same time president of one of the largest farmers’ alliances, Balázs Győrffy, president of the National Chamber of Agriculture (NAK), and Zsolt Nyitrai, chief advisor to Prime Minister Orbán have jointly submitted an amendment proposal to the Act on local taxes to cut off the possibility for levying municipal taxes on farmland. The National Assembly has recently passed the amendment.

According to Telex.hu, the amendment “targets Péter Márki-Zay, but will affect fifty other towns”. Mr. Márki-Zay, an independent politician and mayor of Hódmezővásárhely, was the Prime Minister candidate of the joint opposition campaign of the 2022 general elections. The portal reported that for smaller villages, local taxes on land might make up for 60-70% of the municipality’s annual income, and the portal cited a report which states that there are 55 settlements in Hungary which have a dedicated tax on farmland. Telex.hu also reported in May that the local farmland tax would have been a considerable source of income for Hódmezővásárhely, since in land area, the city is third-largest in size in Hungary after Budapest and Debrecen, with 42 thousand hectares of farmland.

The Agrárszektor.hu report mentions that Minister Nagy has commented that with the amendment they “listened to the request of the farmer community and took the necessary steps.” NAK President Győrffy commented that “Hungarian farmers should be supported and aided and not extorted, since they continuously provide good quality food for the populace.”

Dairy, honey and egg production face economic difficulties

The latest market analysis by the Research Institute for Agriculture Economics (AKI) shows that the export value of the dairy, egg and honey product group has decreased substantially in the past year.

According to the report, the export value of dairy products, eggs, and honey decreased by 10.5%, while the import value increased by over 25% compared to 2022. The trade balance of the product group saw a decrease of trade surplus from €54.8 million to €1 million between 2022 and 2023.

The share of import products in these categories in Hungarian groceries can currently reach up to 80%. Meanwhile, in the domestic sectors, the bulk of the export in the category is made up of milk (34%, €57.6 million total worth), followed by cheese and cottage cheese/curd (33.8%, €57.4 million). With a lower volume comes honey (11%, €18.4 million), and eggs (10%, €16.2 million).

Aquaculture prospects improve this year

Agrárszektor.hu has interviewed Ferenc Lévai, head of the Hungarian Aquaculture and Fisheries Alliance (MA-HAL) about the economic situation of the aquaculture sector this year. The expert said that while in 2022 high feed prices, a dry and drought-prone weather, damages caused by predation by birds, and the lack of support available to industry participants almost brought the sector to its knees, this year the situation is much more promising.

Winter and early spring rains have greatly improved soil moisture generally, and the cereal crops are in a better shape, which means that feed will be cheaper, and the lakes in the Transdanubian region are also filled with water. The situation for livestock raising and feeding is significantly better than this time last year, said Ferenc Lévai.

The news portal also mentions that the government’s Hungarian Aquaculture Operative Program will provide a crisis support measure for domestic fish farmers, with a total budget of €8.2 million. Mr. Lévai added that these funds are available because the sector was unable to fully utilize the available EU sources so far, so remaining funds will be pooled into the crisis support instrument.

Cherry production devastated by spring frosts

Based on June figures, Hungary’s harvest yield of cherry might be 40% to 50% lower this year due to cold snaps and frosts in the spring. The National Chamber of Agriculture (NAK) is asking the government to “revive breeding, variety trials and the orchard registry system” to aid farmers in dealing with climate damages, reports HVG.hu.

Last year, the 2022 European drought caused massive damages throughout Hungary’s entire agriculture industry, however, year after year, climate-related disasters also include frosts experienced during cold snaps in the spring.

Hungarian live cattle export slightly increased in Q1, imports rise substantially

Agrárszektor.hu reports based on the latest figures from the Research Institute for Agriculture Economics (AKI) and the Central Statistical Office (KSH) that although the aggregate live cattle export of the 27 member states of the EU collectively decreased in Q1 (by 6%, to 223 thousand tons), Hungary’s export slightly increased in Q1, 2023, y-o-y, by 1.5%. The main export target markets were Austria, Turkey and Croatia.

However, the live cattle import of the country increased by 53%. More than half of the import comes from Denmark, Slovakia and Austria.

The export of beef decreased, by 11%, its net value however, increased by 7%. The volume of the import of beef similarly decreased, by 18%, its value also increased however, by 6%.

The producer price of young bulls per hot carcass weight was €2.12 per kilogram in May according to AKI, which is a y-o-y 13% decrease. The price of slaughter heifer increased by 1.6%, but the price of slaughter cow decreased by 17% in the period.

Good cereal harvest expected

June 29, the Day of St. Peter and St. Paul, which is traditionally the first day of the wheat harvest in Hungary, has passed. The harvest is only starting now however, since the cool and rainy spring delayed the development of wheat. Farmers are now calculating expected harvest figures and HelloVidék.hu reports that this year, cereal yields are expected to be “particularly good.”

Farmers are also expecting good prices on the international market. Unfortunately, the price of barley remains low. Both wheat and barley are expected to see a supply-driven market due to high carryover stocks and favorable yield expectations.

Wheat yields might reach 6 tons per hectare, which is, really, great for Hungary. György Raskó, leading agriculture economist told Agrárszektor.hu that harvest yields for barley are within 6 and 7 tons per hectare. Hungary’s barley yield in 2023 is expected to be between 1.3-1.5 million tons, with 800 thousand tons left on top of the domestic consumption for exports. From wheat, the country will probably produce enough to have a 3.5 million-ton surplus for export.

Hell Energy announces first energy drink created by artificial intelligence

The Hungarian energy drink and beverage producer Hell Energy has created a new energy drink line through artificial intelligence, reports Trademagazin.hu. According to the news portal, the company used the AI to scour the internet which has large quantities of information on energy drinks, including “contents, sales figures, health research findings, recommendations, consumer feedback,” in order to create the new A.I. line based on this big data approach.

The article also states that the AI created the new energy drink recipe with added vitamins, amino acids and herbs while keeping in line with EFSA regulations and daily intake recommendations. The new product line, aptly named “A.I.” comes in three flavors. The company also used artificial intelligence in the securing of the recipe and even in the design of the drink’s can.

The new A.I. line will be produced in Szikszó, Borsod-Abaúj-Zemplén County, East Hungary, aside from Hungary  it will also be available in 60 other countries.