Hungary Newsflash Week 21

COVID-19 recovery measures, new subsidies, surging e-commerce in the food sector, a vegan innovation, new Protected Geographical Indication and vertical farming R&D - The week in Hungarian agriculture

Dear readers,

The Netherlands Enterprise Agency (RVO) announced a webinar titled “Circular & Sustainable construction in Hungary and Slovakia, which will take place at 10:00 AM (CEST/UTC+1) on Wednesday, June 9. At the webinar, you can find out more about the countries’ green building markets and get information about the local business environment.

For more information and registration, click here.

Beeld: ©Joanna Nix-Walkup
On May 24, a new subsidy program started, supporting horticultural herb farming and the plantation of fruit orchards as well as modernization, irrigation infrastructure development and climate damage mitigating tech instalment.

Weekly briefing

  • COVID-19 recovery: The National Chamber of Agriculture (NAK) successfully lobbied for the wider inclusion of agro industrial companies in the governmental interest-free pandemic recovery loan program. The program was created to aid the industries which were most affected by the crisis. As a result of NAK’s lobbying, enterprises in the wider agro-food industrial scene have been added to the scheme. These include the suppliers of tourism and catering, wholesale food retailers and forestry companies. Companies whose annual profit does not exceed €285 thousand, and who had an at least 30% drop in income in 2020 can apply for the program. The scheme has a financial envelope of €285 million.
  • Agro subsidies: Starting May 24, a new horticultural subsidy program was opened to applicants under the title “plantation establishment and herb production.” The total financial envelope is €42 million. Under this grant program, farmers can apply for the subsidization of a number of activities, including the planting of fruit orchards, herb plantations, irrigation infrastructure development and technologies intended for the mitigation of climate-induced damages. The application period ends on August 23.
  • E-commerce & Food industry: The leading Hungarian food delivery company, NetPincér, conducted a new survey on consumer shopping and food delivery habits. According to their results, 7 out of 10 Hungarians still prefer shopping in supermarkets, while online grocery shopping is #3 on the preference lists, however, 9 out of 10 consumers (in Budapest at least) have already tried online grocery shopping. An average order is worth €12 but some consumers place orders worth as high as €450 in one online shopping session. The highest traffic in online groceries is in the evenings and throughout the weekend, and the most popular products are pastries in the morning, cola/sodas & bananas during the day and beer in the evening.
  • Milling industry: Due to the pandemic and customers rationalizing their consumption of baked products, there was a drop in demand that travelled up the supply chains, leading to a 15-20% drop in the production of flour in the Hungarian milling industry. Stakeholders report that this discouraged multiple companies from going through with their scheduled price increases, making their operation barely profitable in the past period.
  • Vegan food: Pápai Hús is now the first Hungarian meat industry producer that introduces vegan products into the market. Pápai’s vegan product options are now in the beta phase of testing and will be fine-tuned based on consumer feedback and finalized within the year.
Food products on shelves in a grocery store.
Beeld: ©Flickr
In the coming seven year period, new grants will focus on the food industry in Hungary. In total, €21.5 million will be available rural development, agriculture and the food industry from EU and national funds under the Common Agricultural Policy (CAP) until 2027.

New grants – Food industry is front and center

The coronavirus outbreak has significantly enhanced the role of the food industry in Hungary, and although the sector has proved to be reliable in the crisis situation, it has received considerable attention. This is illustrated by the fact that a total of €21.5 million will be available rural development, agriculture and the food industry from EU and national funds under the Common Agricultural Policy (CAP) until 2027.

The food industry will be in focus in the next period, as it is one of the largest processing sectors in Hungary, so operators will be able to apply for grants out of a significantly larger budget, around €2.15 billion more than compared to the previous EU cycle. New grants will be launched this year, first for businesses planning and small-scale food processing developments and then for large-scale food sector projects.

Hungarian self-employed aid approved by Commission

The Commission has approved a €63.2 million change to a Hungarian scheme which support the entrepreneurs, officials confirmed on May 17. The modification involves a new measure to support self-employed people, with no employees, with a direct grant equal to the Hungarian minimum monthly wage of approximately €610 for the period of May to July 2021.

During this time, the beneficiaries are required to keep their businesses active. On the basis of the actual income of self-employed people under normal circumstances, the aid will not exceed 80% of their monthly income & it can only be granted until Dec 31, 2021.

Hungarian rice Protected Geographical Indication approved

The Commission communicated that it had approved the inclusion of the Hungarian rice Nagykun Rizs in the register of Protected Geographical Indications (PGIs). Nagykun Rizs is produced in Kisújszállás in the Nagykunság region, in Jász-Nagykun-Szolnok County in Eastern Hungary.

A regional type of rice, Nagykun Rizs is produced from varieties adapted to the soil and climate of the Hungarian Great Plain, grown in rice fields irrigated by water from canals fed by the Hortobágy-Berettyó river. Rice producers in the area have developed great expertise in cultivation, including preparing the land, providing nutrients, choosing varieties and the timely application of the right flooding techniques. Nagykun Rizs contains a high concentration of nutritionally important microelements.

New vertical farm in Budapest

At the Budapest headquarters of the company Tungsram, a new vertical farm has been recently inaugurated. Partially financed by the Ministry of Innovation and Technology (ITM), Tungsram’s new vertical farm has a production area of 150 m2, and the facility exclusively utilizes LED lighting. The complex is primarily geared towards research and development, which makes it a unique tech hub in Central Europe. It has two testing growth chambers, where researchers can conduct studies – the outcome of which can be immediately utilized in the commercial-sized main production farm.

“The cost of the development was €1.65 million, 43.7% of which was funded by ITM. Both the concept and the development of the farm are 100% Hungarian,” said State Secretary of ITM László György at the farm’s opening ceremony.

You can read more about this here.