Capital expenditures in agriculture continued to increase last year. This is attributable to support schemes within the Rural Development Program, more profitable agricultural production, and favourable credit conditions. All this improves the competitiveness and profitability of the sector, and mitigates the issues caused by the scarcity of labour.

According to the latest figures published by the Central Statistical Office, capital expenditures in agriculture expanded further, by 8.3% at unchanged prices last year, following a significant 10.8% increase in 2017. Farmers spent HUF 347.7 billion (EUR 1.1bn) on development projects in 2018, HUF 43.6 billion (EUR 138 million) more (at current prices) than in 2017. The share of agriculture from capital expenditures within the national economy was 4.1%. The sector-level profitability of agriculture improved by 3% last year.

The support schemes included in the Rural Development Program made a considerable contribution to the increased CAPEX. Specifically, farmers received HUF 12.5 billion for the modernisation of animal farms, HUF 15.3 billion for horticultural development, HUF 11.0 billion for value-added agricultural products, and HUF 3.7 billion for wine production.

In addition to the above, the following factors also contributed to the increase in capital expenditures: income-supplementing agricultural subsidies, a stable financial background guaranteed by a sound risk management system, the growing profitability of agricultural production, and low loan interest rates.

The Ministry of Agriculture expects the dynamic growth in agricultural capital expenditures to continue in 2019. This is supported by the increasing disbursement of rural development funding, and the subsidised credit program planned by the Ministry. These promote the continued increase in competitiveness, which is one of the prime objectives of the Ministry of Agriculture.

(Press Office of the Agriculture Ministry)