Hungary Newsflash Week 35

Milk industry investments

For years, the Hungarian milk industry has been suffering due to one of the lowest purchase prices of raw milk, which is why in the past years, various infrastructural development projects have been started in order to transform the sector, reports the news portal Agrárszektor. According to Minister for Agriculture István Nagy, between 2014 and 2020, the industry has received €73.8 million in governmental and EU subsidies. Consequently, various capacity enhancement investments were launched in the past two years. Many of these investments went into the construction of small to middle-sized milk processing plants, but another example is last year’s launch of a new €42 million cheese production plant by domestic dairy company Alföldi Tej Kft. The production capacity of this new plant is 8 thousand metric tons per year.

These developments represent a structural shift in the entire industry. Raw milk is the lowest added value product of the sector, and the domestic processing of this commodity has been one of the lowest in the EU – While on average, member countries process 95% of their produce, this figure in Hungary is still under 80%. With the recent changes however, the purchase of raw milk by domestic processors has gone up by 64 thousand tons since the summer of 2019 (4% increase). If this trend continues, the Hungarian milk industry will turn toward the production of higher added-value dairy products in the coming years.

Land legislation reform continues

During the summer, parliament passed an act on the regulation of undivided shared land property, a legislation that might affect 170 thousand farmers in Hungary. Many producers today use undivided shared land property for cultivation – Land that they share with, for example, relatives through inheritance. While previously, every owner of a parcel of land had to agree to property division, with the new legislation, 50%+1 of the shares will be enough to initiate the division of property among owners.

Following the new legislation, in the case of owning undivided shared property with owners who are unreachable or presumed dead, upon the exhaustion of every legal attempt at reaching and contacting other owners, the owner who initiates land property division must deposit the purchasing price at court – After an allocated time window of fifteen years, if other owners still cannot be reached, then the property transfers entirely into the ownership of the possessing owner and the purchasing price will be transferred to the state treasury.

Land property division will by no means be compulsory for owners. The ministry is publishing a new, free administrative software tool to help owners who are looking to divide their land submit division declarations.

Stakeholders expect that the new act will enable a property size transformation in the sector and also that the price of land will now start to increase since “1/1” (sole ownership) parcels are worth much more than shares in undivided shared properties.

(See our overview of the previous legislative act in June that targeted farming coperative lands over here.)

Stricter consumer protection regulation

With a recent proposal to change the Consumer Protection Act, the government aims to patch up loopholes and make consumer protection regulations stricter. The amended act would enable authorities to perform on-the-spot checks not only in stores but also at “other links of the supply chain,” meaning large scale distributors, suppliers, storages, etc. Furthermore, officers will also be authorized to check technological processes, a measure included due to frequent reports of the falsified labeling of imported fruits as Hungarian produce. Moreover, with a “prosecutor’s warrant,” officers will be authorized to search sealed facilities or private residences as well. This procedure will be introduced because retailers often use private apartments as storages for online webshops.

The next victim of the changing climate

A recurring topic in our newsflashes this spring has been the reporting of various types of climate-induced damages – And for good reason too. The changing climate of the region is now causing long-term shifts in environmental conditions for agriculture. According to a recent report by the Research Institute of Agricultural Economics, raspberry production in Hungary has shrunk to a fraction of its volume over the past two decades. While in 2000, raspberry was cultivated over 1.5 thousand hectares in the country, today it only accounts for 160 hectares of horticultural land.

The trend has reached the point where the net export balance of raspberries has sunk into negative figures in 2019. The net import increased by 31% to 458 tons. Export increased too – It is orders of magnitude lower however, at 2.5 tons in 2019. The largest raspberry producer today in Europe remains Serbia, however, this year’s harvest in Hungary’s southern neighbor has been devastated by catastrophic hailstorms and flash floods. (More on that here)

Meanwhile, the devastating aftereffects of the spring weather extremities are now unfolding in the rest of the fruit sector. The sour cherry season started with a €0.79 per kilogram price in July, but despite the low volume of the harvest (50-55 thousand tons), the price only droppeds ince then due to low quality, sinking to as low as  €0.51/kg. The apricot harvest was almost destroyed in the spring – The 6-8 thousand-ton-yield is merely one quarter of the mean annual figure, one fifth of that in good years and the price is almost double the average (€4.21) despite the low quality.

Apple cultivation also saw a weak season, for the second time in a row. While this trend is true for all EU countries, Hungarian yields were even worse, at around 50-100 thousand tons less than last year’s already low 400 thousand tons. Storages are almost empty at this point, as the shopping spree during the quarantine further depleted them in the spring.

The wild boar invasion

Wild boar populations in Hungary have been causing trouble for agriculture for years. In the Balaton Uplands however, on the northern shore of Lake Balaton, the issue has recently become especially severe. Throughout August, many wild boar sightings have been recorded in this popular touristic area. Last weekend alone in Balatonszepezd, police and professional hunters had to corner and shoot down a drift of boars that caused destruction, attacked dogs and endangered citizens as well.

Wild boars are known to break into private residences – Summer houses, cabins and gardens – in search of food. In agriculture however, they are known particularly for the signature trail of mayhem  they leave behind in cultivated areas. A sounder of wild hogs can devastate fruit tree orchards. They are an especially destructive force of nature in the Badacsony area, one of the historic wine producing regions of Hungary. Boars can knock down rows of vines, destroy the harvest and ruin grapevine plants that take years to mature. Some of these valuable vines yield unique wine grape varieties that are only produced in this region like Zeus, Kéknyelű or Zenit. “They’re really everywhere,” tells us a local wine producer. “We reached a point where we have to protect the vineyards with electric fences just to fend them off.”

Producers and stakeholders often complain that boars are under-hunted and their overpopulation is not kept in check by current game management and hunting measures. Normally, wild boars fear humans but they can be dangerous or even lethal and their hunting requires permits from authorities.

Photo credit:

Cover: Apples by Jill Wellington via Pixabay
Milk by Couleur via Pixabay