An influx of funds in Hungarian agriculture

– What do you think about the rapidly rising food prices? Are there factors that are likely to increase grocery prices further in Hungary?

Balázs Győrffy
president
NAK

– Signs indicate that we haven’t come to the end of the food inflation yet. The costs of farmers and processing companies have increased, and they can only sell to retailers at higher prices than before. As the production of several food types requires lots if energy, further food price increases will occur because of the soaring energy prices.

– What can stop the food inflation and when? What can be the way out from the current situation caused by the Ukraine-Russia conflict? Can we profit from the present situation later in any way?

– In this extraordinary situation, problems can only be solved at a European level. Quick decisions and new funds are needed not only in Hungary, but in other EU member states as well. The only way out from the current crisis is peace, which would entail energy and raw material prices returning to the normal level. It can be felt that the food industry’s strategic importance grew because of the pandemic and now the war, which generates greater attention and faster development for the sector.

– What does it mean for Hungarian agriculture that we haven’t been able to reach an agreement with the EU about the recovery fund? How does the country’s economy react to this and what steps should the government take?

– I think there is no reason to worry, on the one hand because Hungarian diplomats are negotiating well, and on the other hand because agriculture isn’t really affected by the talks between the government and the EU institutions: the money used in Hungarian agriculture comes from different sources. In November the EU gave a green light to the conditions of funding from the Common Agricultural Policy (CAP) between 2023 and 2027. Hungary’s agri-food sector will receive more than HUF 5,300bn. From this the government is going spend about HUF 1,500bn on investment projects in the agri-food sector, to increase its competitiveness. (x)