EU Accession And Sustainability In Hungary: Challenges For Farm And Rural Businesses

Agricultural production remains important as a main source of income and the way of life in rural areas in Hungary.
Under preparation for EU accession, Hungary has been working on restructuring its agricultural policies to promote rural development as well as greater market orientation.

The earlier social and economic transition has resulted in fundamental changes in the ownership, production and
organisational structure of Hungarian agriculture. In the past decade, the production and sales of agricultural
commodities have considerably decreased. The domestic demand on agricultural products has shrunk. As a result,
financial conditions of farms have worsened. In order to improve the conditions of small and medium sized farms, the
government introduced new subsidy measures and made other arrangements for supporting family farming in 2002.

In May 2004, Hungarian agriculture is expected to become part of the extending single market under the control of
Common Agricultural Policy (CAP) of the EU. Although the detailed picture on the new CAP is not yet known, the
increased emphasis on rural development and sustainability is clear for Hungarian agriculture. Opportunities of EU preaccession aid, SAPARD, for financing advanced environment friendly rural development projects are now available for Hungarian farms. Integrated approaches to farm management have been also in the process of introduction.

This paper examines the performance of the best-practised private farms with the orientations toward sustainable
agriculture and agro-tourism in the North-eastern part of Hungary. The characteristics common to these farms and the
challenges that we foresee under the new CAP are identified. We believe that this paper will contribute to the better
understanding of farming activities in Central Europe.