Hungary: Tax-changes for dairy sector, political support for GMO-free soya

Last Tuesday, the Hungarian Ministry of Finance put forward its new tax-proposal to Parliament. The changes include a cut for UHT and ESL milks, which could have potential effects on the European internal market. The government has also expressed support for making Hungary a protein feed independent country.


The tax-proposal reduces the tax rate of UHT (Ultra High Treated Technology) and ESL (Extra Shelf Life) milk to 5%. This move is suggested to put Hungarian milk products in a stronger position than imported milk. According to State Secretary Sándor Farkas, the lower tax-rate could also be the final solution to solving the ongoing crisis in the milk market.

The crisis that followed the cessation of EU milk quotas in 2015 has put a large strain on Hungarian producers and has led to the domination of imported products in stores. It is unknown, whether the move will damage Dutch producers, but it is an interesting development that could have an impact beyond the Hungarian dairy market.

Portein Feed

In other news, at a recent forum of the Hungarian Cattle Breeders, State Secretary Sándor Farkas stated that Hungarian crop production is not yet capable of producing sufficient amounts of protein feed. This means that the country has to import soya, while the market does not yet recognize the value of animals bred with GMO-free fodder.

He also stated that soya-production is an important opportunity for Hungarian producers, but its profitability is still standing on weak feet. In the dry months, in Hungary’s Great Plains it’s difficult to achieve yields bigger than 3-3,2 tons per hectare.

According to the State Secretary, becoming protein feed independent will require a continuation of subsidies, and continuous efforts by producers to keep or improve current yield rates – an area where Dutch innovation could come in handy.

The position aligns with the greater efforts of Donau Soja Association that Hungary is a supporter of. The association ‘aims to support the sustainable development of Europe’s farming and food businesses by improving the production and use of protein for European consumers’.

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Peter Bori - Junior Policy Advisor Agriculture