Hungary: Agroeconomic and climate troubles on the horizon while tensions rise around FMD measures

Foot-and-mouth disease: Debates and protests around carcass disposal

Telex.hu reported this week that the termination of the animals at Dunakiliti and Darnózseli, in Győr-Moson-Sopron county, has commenced, while the disinfection of the first two cattle farms in Kisbajcs (the site of the first outbreak) and Levél are underway.

On Tuesday, April 8, another development unfolded in the case of the termination of cattle from the site of the latest infection. The carcasses of the culled animals were scheduled to be buried near the town of Jánossomorja, in Győr-Moson-Sopron County.

However, Telex.hu writes that the leadership of the small town was not consulted. The mayor of Jánossomorja "accidentally learned about the official authorities' plans on Sunday." On Monday, April 7, locals protested in Jánossomorja. Telex.hu reports that he protesting locals declared that "they would not vote for Minister Nagy again if the cattle come to Jánossomorja."

Jánossomorja is part of Győr-Moson-Sopron County’s 5^th Electoral District, which is Mr. Nagy’s constituency.

On Tuesday, Minister Nagy announced that the carcasses would not be transported for burial in Jánossomorja after all, but would be redirected to Bábolna instead, in Komárom-Esztergom county, where the carcasses from the first outbreak in Kisbajcs were also buried.

The portal writes that the decision has now put Bábolna in a difficult situation, as the town’s municipality and residents also only learned from the press that the cattle carcasses would be transported to the town's area.

"It is important to emphasize that we have not yet received official information from the relevant authorities," the town's municipality announced on Facebook on Tuesday, April 8. Council members highlighted that this is the second time that a decision  to bury  carcasses from the outbreak in the town has been made without consulting the locals. The City Council issued a resolution stating "that to their knowledge, the Bábolna animal carcass disposal site is full, and no more animals that have died due to foot-and-mouth disease can be transported there." The resolution also states that the carcasses pose risks to livestock farms, groundwater, the local arboretum, and even the area's reputation. They also considered it unreasonable to transport the slaughtered animals 80 kilometers. Foot-and-mouth disease spreads through the air.

On Wednesday, April 9, locals in Bábolna protested the transport of carcasses into the town, 444.hu writes, with the demonstration organized as a road blockage, however, trucks transporting the carcasses used a different route. Some transport trucks were egged, riot police was scrambled to protect the convoy.

On April 10, at a governmental press conference, Gergely Gulyás, Minister in charge of the Prime Minister’s Office, stated to a journalist’s question about the possibility of t the foot-and-mouth disease being artificial that “based on laboratory information, they spoke about this, but currently, there is only verbal communication regarding it”, so detailed information has been promised for a later time. He also added that the government has launched an investigation to determine whether “the virus appeared naturally, or by artificial means, in the country.”

Climate: A potentially more severe drought than that of 2022 threatens agriculture

Recent reports highlight that Hungary's agriculture faces the threat of an even more severe drought than the one experienced in 2022, Agrárágazat.hu wrote this week.

A dry winter and similarly dry March are posing serious issues. Hungary’s river catchment areas experienced low precipitation, although the rains of recent weeks have somewhat alleviated the water shortage. This in itself will not save cereals however, Agrárágazat.hu writes.

The meteorological service reports that in December, precipitation amounted only to half of the usual quantity, two-thirds in January, and again only half in February. This trend suggests that the severity of the coming drought in 2025 could even surpass the historic European drought of 2022, especially if the spring months do not bring the necessary rainfall.

Hungarian innovation in plowing

A new plowing technology developed by researchers at Budapest University of Technology and Economics (BME) “makes soil tillage more efficient than ever before,” the university told the MTI news agency at the end of last week.

The innovation was developed by researchers at the university’s Faculty of Mechanical Engineering. With the new technology, the required pull force can be reduced by at least 5%, significantly lowering fuel consumption, and without requiring significant investment, the university reports.

Recognizing the importance of the invention, the experts have filed a patent application. However, development continues because the success of its implementation depends on understanding soil properties. Data gathering for the continued development could be best conducted through automation, the press release reads, and the employment of artificial intelligence would accelerate the processing of the data. In the next development phase, the researchers are involving BME's Industry 4.0 Technology Center and the Precision Agriculture Research Group.

Food industry at competitive disadvantage

Hungary's food industry is at a competitive disadvantage compared to the EU average, further exacerbated by government burdens such as EPR fees, writes Agrárszektor.hu.

The portal interviewed Attila Vörös, the managing director of the Responsible Food Manufacturers Association (FÉSZ). The interview revealed that a fierce price competition is taking place in the food market, as the decline in sales and changes in consumer habits present challenges to domestic producers. These trends also lead to increased demand for cheaper products.

Hungary's food industry is at a competitive disadvantage, with productivity falling behind the EU average, further worsened by government burdens, such as EPR fees.

"The decline in sales that began in 2023, as well as changes in consumer baskets, have had a negative impact on domestic manufacturers. Consumption, after reaching a low point in 2023, is growing very slowly, or hardly at all. Consumers are seeking cheaper products: strong discounting processes are taking place, and for certain products, packaging and even quality are falling victim to the shrinking of purchasing power," Mr. Vörös told the portal.

The expert added that, in the current situation, inefficient production, domestic aggravating factors, and the low level of disposable income in society clearly intensify import pressure. Domestic manufacturers are losing market share to cheaper, mass-produced import food products.

Production efficiency indicators show that the industry is falling behind, Mr. Vörös added, and this is worsened by high fiscal obligations. Domestic production is expensive, which makes its position both at home and on the export market perilous.

Agriculture and food industry: International trade in numbers

Agrárszektor.hu also reported on the annual and monthly changes in the international trade of food and agriculture products.

In Q1-Q2, 2024, Hungary's agricultural and food industry product exports reached €7.02 billion, while imports amounted to €4.84 billion. As a result, the balance of agricultural foreign trade increased to €2.18 billion, which exceeded the first half of 2023 by nearly €0.7 billion.

Exports of agricultural and food industry products increased by 5.8%, while imports decreased by 6.1%. The export price index decreased by 15.2%, and the import price index increased by 14%, resulting in a 26% deterioration in the terms of trade compared to the same period of the previous year.

Generally, both the country’s export and import decreased based on Hungary’s aggregate macroeconomic figures. Exports decreased by 5.6%, while imports dropped by 10.9%. Agricultural and food industry products accounted for 9.6% of total national exports and 7.4% of total imports. The largest growth was observed in grain exports, which nearly doubled y-o-y.

Agro-ecology program subsidies continue

OTPAgrár.hu writes that, following the previous payment schedule of approximately €91 million, nearly €72 million will be transferred to eligible farmers in the Agro-ecological Program (AÖP) during the second week of April. The Hungarian State Treasury has already disbursed around €161 million based on the 2024 AÖP applications, with the number of partial payment recipients exceeding 56 thousand.