MBH: Irrigation development subsidies could increase income by 80-100 billion forints per year

The expert partly explained the drought as the reason why the volume of arable crop production, which accounted for more than half of Hungarian agriculture’s output of almost 4 thousand billion forints last year, decreased by 16 percent compared to the previous year. In Hungary, 210 thousand hectares of the 5 million hectares of agricultural land can be irrigated, but producers only irrigate 100-130 thousand hectares of this. The importance of irrigation is also proven by the fact that the fluctuation of the domestic yield average is significant even in European comparison, approaching 20 percent – he emphasized. Dávid Hollósi expects significant improvements from an efficient financing system and support policy, which he believes would be needed primarily in the Southern Great Plain. He added, however, that irrigation should not be wasted, water should be utilized consciously and with precise management, because the survival of producers may depend on it. From the applicant’s side – he added – financial awareness will increase in the coming period, and agricultural entrepreneurs will have to look carefully at the financing options. Market loans will probably be permanently expensive, because the low interest rate environment of the 2010s will not return in the foreseeable future, so interest subsidies may be the most advantageous solution. In addition to the almost 1,500 billion forints of investment support available from the rural development framework, almost the same amount of own funds can be received, of which 700-800 billion forints can be investment loans, the MBH can participate in every third agricultural investment tender – said the expert. Szabolcs Szigeti, Deputy State Secretary responsible for the implementation of the common agricultural policy at the Ministry of Agriculture (MA), announced that in the current financing cycle, 32 calls for tenders were published from the rural development framework of the common agricultural policy by mid-February, worth a total of 1,260 billion forints.

According to experience, the tenders are popular, and the application periods sometimes end with four to five times more applications

He added: based on the applicant’s demands, he sees that there is a need for development in agriculture, and Hungarian producers are thinking long-term. In the spring months, applications will be submitted, among others, for the development of short supply chains, the activities of young farmers, irrigation communities, as well as for afforestation and tree planting, and for land use change.

The Deputy Secretary of State announced that more than 65 billion forints will be allocated for irrigation development investments

Applications for projects worth up to 200 million forints can now be submitted, and applications for projects over 200 million forints will open on March 4. Based on the interest of applicants, Szabolcs Szigeti expects that the irrigation development applications will also be successful. The irrigation development consortium agreement, which was established under the leadership of MBH with the group’s business development company, MBH Forrás Zrt., as well as the Dentons consultant and the agricultural market expert Fönk-Expert Kft., was signed at the event. The association helps applicants with everything from professional preparation to legal support and application management, as well as in the preparation of loan applications, financing and follow-up of applications – said Balázs Garamvölgyi, CEO of MBH Forrás Zrt. Andor Nagy, member of the board of directors of Dentons Europe Consulting, believes that the consortium is not only a unique initiative in Hungary, but can also be an example to be followed in other countries in the region. Imre Horváth, CEO of Fönk-Expert Kft. emphasized that irrigation development should be given priority, and to this end, the consortium provides producers with sustainable and cost-effective irrigation technologies.

MTI