Agricultural development and land concentration in a central European country: a case study of Hungary

Abstract

Land has been newly re-allotted in those Central European former socialist countries, the agriculture of which was previously dominated by production co-operatives and state farms. Land privatization was undoubtedly an urgent need but the manner of its fulfillment was essentially politically motivated, based more on the ideology of different peasant parties than on economic considerations. Generally, millions of people received small parcels, often in several pieces, and many of the heirs of the former owners had never worked in agriculture and did not even live in rural areas. Scattered land ownership was not suitable for modern farming, since it could not be well equipped, mechanised and cultivated. The average size of these farms lags far behind that of the EU countries where farms must also be highly subsidised in order to survive. The real situation is, however, not so bad. Land tenure is much more concentrated than ownership. Some of the big farms have survived either as renamed and restructured co-operatives or as different companies organized from the former co-operatives and state farms in most Central European Countries (CECs). In Hungary they cultivate 45 per cent of the land and keep a large part of the livestock. In the small-farm sector, a significant concentration has also occurred recently. According to our representative survey in 11 counties of Hungary in 1998, 60–70 per cent of the land of individual farms is cultivated by farms larger than 50 ha. They produce, together with the large corporate farms, the bulk of the marketed products. Farms under 10 ha are mostly part-time farms or holdings of retired and unemployed people. These farms have more of a social than an economic significance.