Hungary: Poppy, the essential and versatile

Consumption is not increasing, the issue is with real wages, analysis finds

A new analysis by the research company GKI Gazdaságkutató has highlighted that, based on multiannual data, nearly half of Hungary’s workers have not seen an increase in their real wages over the past four years, which explains why consumption has not increased significantly.

The analysis states that one of the most common questions in recent months is why Hungarian consumption is not growing faster despite “the extremely high real wage levels”. According to the Minister of Economy, people are cautious and the savings rate is high, writes GKI.

However, according to their analysis, the fundamental condition for a consumption boom is an increase in real wages, which on average 44% of full-time employees did not receive over the past four years, between 2020 and 2023.

Over the past four years, a significant portion of employees have actually seen a decrease in their real wages. In 2020, out of the 3 million full-time employees in the country, 33% experienced a decrease in their real earnings, meaning their nominal wage increase did not keep up with inflation, writes GKI.

In 2021, this figure was 45%, in 2022 it was 40%, and in 2023 it was 57%, meaning that more than half of the full-time earners of the country saw a decrease in their monthly real earnings last year. This is one of the reasons for the decline in consumption last year, the analysis adds.

In 2023, the average wage for full-time employees in Hungary was HUF 571 thousand (€1,388.67). This figure is €121.55 higher than the average income calculated for all workers, including part-timers and self-employed individuals.

Barley underperformed this year

In Hungary, the price of feed barley has increased by 40% in a year and by more than 20% in just a few weeks, writes Agrárágazat.hu. In neighboring Ukraine, prices are also rising sharply. In the third week of November, this price was €177-€179 per ton. The main reason for the high price is this year’s low harvest yield, the country’s total barley harvest of 1.45 million tons was lower than the last three years’ yield, the last time the barley harvest was this low was in 2021. The cultivation area was also smaller compared to previous years, from an area between 310-398 thousand ha, it shrank to just 256 thousand ha. Hungary’s barley export also fell this year, while in 2023 the country exported 725 thousand tons of barley, this figure was 680 thousand tons this year.

Organic farming: good prospects in coming years with room for improvement

Agrárszektor.hu recently reported on the state of organic farming, and its subsidy opportunities in Hungary. According to the portal, the grant programs starting next year could help domestic organic farming gain momentum. Under the national CAP plan, there is an opportunity to support the organic transition: the new five-year program will start in January 2025. The National Action Plan for Organic Farming aims to increase the proportion of organic areas to 500 thousand hectares, 10% of the total farmland area, by the end of 2027.

In Hungary, 320 thousand hectares of land is used for organic farming, which is 6.4% of the total agricultural area, compared to the EU average of 10%. Additionally, the proportion of areas used for mowing and as pastures (55%) is higher than the EU average. In organic farming, arable land accounts for 37%, and plantations for 6.5%. The Seed Association Organization and Product Council (VSZT) commented that suitable crop varieties should be available for farmers engaged in organic farming.

Typical crops on organic arable farmlands in Hungary are cereals and corn (38%), green fodder crops (36%), out of which alfalfa is the most dominant. Additionally, sunflowers, peas, fennel, onions, potatoes, soybeans, and millet are also grown to a greater extent on these lands.

Meanwhile, organic crop variety tests have been ongoing in Hungary for years with good results. The Research Institute of Organic Agriculture (ÖMKi) coordinates these small-plot cereal experiments, and in 2024, the fourth winter wheat and the third spelt variety tests were concluded.

By 2030, the EU aims to for ecological cultivation to cover 25% of its agricultural land, said Dr. Dóra Drexler, the managing director of ÖMKi, to Agrárszektor.hu. The expert explained that organic farming significantly reduces the chemical input burden on the environment. Biodiversity is higher due to crop rotation, organic plant protection, and organic nutrient replenishment, and also because organic farmers use mechanical weed control and do not use herbicides, Dr. Drexler told the portal.

Hungarian organic farming is characterized by export production, but more than 80% of the grain is sold for export in an unprocessed state. A significant portion of grazing animals also graze on organically certified land, but the animals themselves are not organically certified. These are very important areas for development to ensure that added value remains in the country, said Dr. Dóra Drexler to the portal.

Invasive raccoons and coypu wreaking havoc in Hungary

Agrárszektor.hu reports that two invasive mammals, raccoons and coypu are causing more and more trouble in Hungary.

Two culling campaigns took place in the past month, but the problem persists as both invasive species are spreading rapidly across the country. This poses significant challenges for wildlife and game management professionals, as the growing populations of these animals can cause numerous difficult-to-manage problems, writes the paper. Both species are particularly fond of raiding corn crops, Agrárszektor.hu adds, and they can spread diseases. Their bites can be very dangerous, and they are also very adept at thriving in urban environments.

Coypu, or nutria, which is native to South America, used to be bred as livestock for its meat and fur in Hungary. Experts believe that some coypu escaped from nutria farms, but in other places, breeders set them loose on purpose after the market for their products collapsed. In the past 15 years, the species has become endemic in Hungary, the portal reports.

Raccoons can be hunted year-round in Hungary. Dr. Krisztián Katona, an associate professor at the Institute of Wildlife Management and Nature Conservation at the Hungarian University of Agriculture and Life Sciences (MATE) told the portal that they cannot definitively state yet whether the culling has significantly reduced the population or not. Raccoons can spread rapidly, as young specimens can move 20 to 30 kms in search of new habitats. Sooner or later their hotspots will start to merge, the expert says. In Germany, only a few pairs were released in the 1930s, but in recent years, more than 200 thousand specimens have been culled.

Poppy production on the rise

According to the National Chamber of Agriculture (NAK), today the poppy seed cultivation area surpasses 12 thousand hectares in Hungary. The primary reason for this is the extremely versatile use of poppy as a raw material in the food and pharmaceutical industries, as well as in floristry.

NAK’s release also mentions that the crop’s cultivation in the EU is strictly regulated. It can be grown for personal use on areas smaller than 500 m² using varieties with low alkaloid content (below 0.06%). Cultivation on larger areas or planting high-alkaloid varieties for pharmaceutical use requires a permit.

Since Hungary’s EU accession, the poppy cultivation area has doubled, with an increase of 3 thousand ha in the cultivation area happening in the past 10 years.

In the holiday season, poppy plays a central role as it is one of the main ingredients in holiday sweets and desserts. Poppy sweet rolls are popular desserts throughout Central Europe and parts of Eastern Europe, from Germany through Hungary to Ukraine and Lithuania, with a dozen Central European cultures having their own variations and their own names for this winter treat.

In Hungary, the other popular filling for sweet rolls is walnuts, but there are variations on the recipe, for example, poppy seed with sour cherries (also a popular filling for strudel), chestnut with plums, poppy seed with apples, walnuts, chocolate-hazelnut, and other, more niche gourmet variants.