Discord

Hungarian farmers with produce that is in high demand abroad had a very good year in 2007. Products were exported at higher prices than could have been achieved in Hungary, whereas domestic food processing enterprises were struggling to stay in business. High grain prices came as a relief for farmers worried by spring frosts and summer drought, but the same was a disaster for others involved in animal husbandry. Higher costs for farmers translated to higher consumer prices for food. Regarding statistics, 2007 was not a bad year for Hungarian agriculture. According to optimistic forecasts, the production of domestic agriculture is going to grow by 30 per cent in the next decade. The question however is, whether this production will be exported in unprocessed form or be processed in Hungary. Domestic food processing enterprises have to cope with high agricultural prices and the overwhelming power of retail chains which allows them to keep suppliers’ prices low. According to some predictions, the rise of consumer prices will soon stop. Last year was an unusually happy period for milk producers, because retail chains were forced to pay higher prices. Some people expect another wave of price rises in the dairy business in May, as this is the month when existing stocks of fodder will have to be replaced. It is widely believed in the dairy sector, that annual contracts are a thing of the past and contracts should be signed only for quarterly periods, with price guarantees. Suppliers’ prices in the food industry rose by 11.5 per cent on average last year, which is far more than the rise in consumer prices. The representatives of the food processing industry believe that collaboration and solidarity between agricultural producers and the food processing industry is needed and politicians should do something to promote such united action.