Five candles

Following the disappearance of borders five years ago, the flood of imported food came as a shock to the local food industry. Today, imported products account for nearly 30 percent of food products on the shelves. Accession to the EU has created a new situation for the Hungarian food industry where it had to compete with companies which already had several decades of experience in the EU market and had been shaping the rules of competition for decades. In the first two years, the opening up of the market resulted in a substantial deterioration in the balance of foreign trade of agricultural products. The weakness of the swine and poultry sectors quickly became apparent, while the fruit and vegetable sectors also failed to produce the quick success expected from them. A shift in agricultural production took place towards plant products. The dominance of foreign chains in retail and the concentration taking place in the processing sector had an adverse effect on local farmers, especially with harsh conditions dictated by retailers which were impossible to comply with for many of them. The proportion of cheap imported food grew rapidly. Gradually, Hungarian agriculture has begun to adapt to the new conditions. The value of food export in 2008 was more than double of that recorded in 2000, reaching EUR 5.7 billion. While pre-tax profits generated by agriculture totalled HUF 35.4 billion in 2004, this amount was HUF 76 billion in 2008. Subsidies available for rural development in the 2007-2013 period total EUR 5.3 billion. Development projects are needed to utilise our agricultural potential. Protection of farmers’ interests is another key issue in a market where the retail and processing sectors are dominated by multinational enterprises.