Hungary Newsflash, Week 25, 2022

Climate change might end peach and apricot farming in Hungary

In an interview with Agrárszektor.hu, Ferenc Apáti, president of FruitVeB (Hungary’s alliance of fruit and vegetable producing farmers) has said that the cultivation of peaches and apricots is in a dire situation in the country.

Mr. Apáti has stated that currently 80 thousand hectares of land is used in fruit orchards and plantations, however, the production area of apples and peaches has been declining. The production area of walnuts and elderberry has been increasing however. According to Mr. Apáti, the reason for this is that these crops are much less labor and capital intensive, and present much fewer inherent risks in cultivation.

The production area of crops that are labor intensive and/or less resistant to climate damage has been seriously declining. These include apricots, peaches, cherries and strawberries. Crops that are particularly labor intensive and vulnerable to climate change are now disappearing. Examples include brambles, blackcurrants, raspberries and gooseberries.

“[The farming of] peaches and apricots will be in question next. In 2020 and in 2021, spring cold snaps caused devastating losses, at many farms, the climate destroyed the entire harvest. If this continues this year and next year, a large number of farmers will cease cultivation because a total loss of production for three to four years is impossible to survive,” Mr. Apáti told Agrárszektor.

Mr. Apáti believes that certain other fruits, particularly, apples, pears, sour cherries, walnuts and plums, can be cultivated competitively in Hungary, but in many cases the issue is not the type of crop, but lacking capacities in production. For example, only 25-35% of fruit orchards are irrigated. Non-irrigated orchards are already at risk and farmers do not find it feasible to invest in costly climate protection infrastructure to protect them.

New subsidy program approved

The news portal Agrárszektor reports that the European Commission has approved economic subsidy programs in Hungary worth in total €1.14 billion. The subsidy program is meant to aid companies in multiple industries in connection with the impact of Russia’s invasion of Ukraine.

The subsidy program is open to companies affected by the war in all industries except for the financial sector. In the case of companies in the agriculture, fishing and aquaculture industries, the maximum subsidy for individual companies is €35 thousand. The deadline for applications for the subsidy is December 31, 2022.

Hungary’s pea production shows changing figures

Hungary is one of the top exporters of peas in the EU’s common market, however, the cultivation of this successful legume is declining, reports the daily Magyar Nemzet.

The country annually exports 34 thousand tons of canned peas. The portal Telex.hu reports based on the latest figures by the Central Statistical Office (KSH) that exports actually increased this year, by 14%. The exports of frozen peas also increased, by 11%, to 11.7 thousand tons.

The cultivation of peas came out of a low point in 2015, and in the following two years, the production area went from 16 thousand hectares to 23 thousand. However, this figure started decreasing again and the current size of pea plantations in Hungary is 18 thousand ha.

One reason for this decline is the shocking increase in the price of wheat and maize, both of which are now more profitable to cultivate than peas. The other reason, however, is climate change, and the risks it poses to the farming of peas in Hungary.

€3 million governmental support to a canning company for capacity enhancement

The canning and vegetable processing company Kecskeméti Konzerv Kft. has received a governmental support of €3.037 million for a capacity enhancement development, worth in total €8.35 million.

At the official launching ceremony of the project, Minister for Finance Mihály Varga has stated that “in the past twelve years, Hungary’s food output has increased by 30%,” and that despite the war-related crisis in Europe, the government “does not expect food supply shortages in Hungary.”

The Minister for Finance also added that (the government’s) goal is to increase the share of Hungarian products in the country’s food supply, to “at least 80%”.

According to Mr. Varga, investments in the agriculture industry increased by 19.7%, and in the food industry by 9.4% in the first quarter of the year.

Vegetable farms need to raise prices by 30% to 40% to stay afloat this year

Sándor Nagypéter, CEO of the horticulture conglomerate DélKerTÉSZ has stated in a recent press release that although the weather is more favorable this year than in 2021, rising input costs (fertilizer, fuel, gas, electricity) as well as rising interest rates, will negatively impact the production of fresh horticultural goods.

Mr. Nagypéter added that due to these increased costs, farms in the horticulture sector “would not survive without a 30 to 40% rise in producer prices”.

The CEO also added that these cost increases already traveled down the supply chain to consumer prices: “In the case of fresh produce, deals have to be negotiated with supermarket chains every week, as opposed to food industry products, which have a contractually set prices for months ahead.”

The news portal HVG.hu writes that DélKerTÉSZ, a farming conglomerate with nearly five hundred members, is battling climate change with technological solutions and geothermal water used in greenhouses. According to Mr. Nagypéter, climate dangers make vegetable forcing more and more relevant.

The CEO also added that prices on the global market are also rising. “Pepper from Egypt, Jordan or Morocco has become much more expensive since the price of maritime shipping increased sevenfold, and the price of overland shipping is also three to four times higher.” Mr. Nagypéter thinks that this might actually be beneficial for Hungarian products on the regional market.