The farmers don’t sell the crop, so they wait for even better prices

By: STA Date: 2022. 09. 06. 09:30

Although it has been somewhat forgotten in recent years, due to the current economic situation, the institutional system of public warehousing may revive in Hungary.

The legacy of old times is the institution of public storage (Photo: Pixabay)

The high crop prices favor the farmers, but many people are waiting to sell the goods, however, warehousing requires self-effort and investment, at the same time, the banks are now much more withdrawn in relation to agriculture – said Zsuzsanna Réther, CEO of Korona Közraktár Zrt., to the Agrárszektor. He emphasized that it is a financial product that operates on the basis of a mortgage, the public warehouse ticket, which the farmer receives for a maximum of 1 year as a security, provides cover for borrowing from credit institutions, so in the current high interest rate environment, this can be a favorable form of financing for producers and banks .

Crop storage elsewhere

The transaction in which Agrolink Zrt. purchased Korona Közraktár Zrt. was completed in May 2022. Although the institution of public storage has disappeared from the field of vision in the last 10 years, the system itself has a very serious and long history. It was originally founded – mainly for producers – so that they would not have to sell the produced goods (agricultural crops) immediately, but could store them. The whole process takes place in such a way that the company takes the goods stored in the warehouses into a public warehouse, issues a public warehouse ticket for them, and this ticket, as a security, provides collateral for the producers to take out loans from credit institutions – Zsuzsanna Réther informed the newspaper. He added that this is actually a lombard-type financing, so in this case the collateral is a movable property, a stock in a public warehouse.

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