The European Commission has approved Hungary’s Rural Development Programme for the period between 2014-2020. According to Miklós Zsolt Kis, State Secretary for Agricultural and Rural Development at the Prime Minister’s Office, the Government has had a series of difficult consultations and talks, but has succeeded in protecting the interests of Hungarian farmers and the Hungarian provinces against Brussels on the most important issues.
The greatest achievement of the Rural Development Programme is that, instead of large farms, it focuses on the development of small and medium-sized businesses and family farms. As a result, the Hungarian Government has taken an historic step in agricultural-social policy as these businesses will benefit from 80 per cent of the funding to be made available during the new cycle, thereby breaking with the concentration of grants in favour of large farms.
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From among the important Hungarian results of the consultations, the State Secretary further highlighted that the European Commission permitted the subsidisation of new watering projects aimed at increasing the extent of watered areas, against stringent conditions. Brussels accepted the enforcement of the Government’s estate policy criteria also in the case of the Agricultural and Environmental Programme, i.e. similar to area-based grants, the grants of large operations will be reduced depending on their size. The Government has further succeeded in achieving that, compared with the rest of the EU Member States, agricultural, food industry and forestry projects should be allocated a higher percentage, some 40 per cent of the funds of the Rural Development Programme. As a result, the Rural Development Programme may significantly contribute to increasing the competitiveness of agriculture, the food industry and the wood industry, and to creating new jobs.
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The total funding of the Rural Development Programme, including the national co-funding and the area-based grants reallocated from large agricultural operations, amounts to some HUF 1,300 billion. The most important objective of the Rural Development Programme is to preserve jobs and to create new ones in the countryside. The programme therefore focuses on the development of micro-businesses, small and medium-sized enterprises and family farms with a major employment potential, in particular, in labour-intensive sectors, with special regard to animal husbandry, horticulture, and food processing.
Some HUF 75 billion will be available for the modernisation of existing animal husbandry farms and the establishment of new ones as well as for the procurement of machinery necessary for animal husbandry, while HUF 72 billion will be made available for the establishment of plantations, hot house gardening, and the technological modernisation of existing farms.
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A significant portion of the available funds will serve energy efficiency and the use of renewable energy sources. This will not only improve the competitiveness of the sectors concerned but will also permit the reduction of their greenhouse gas emissions and their dependence on fossil energy which is mostly imported.
By virtue of the development of the food industry, we do not only generate new jobs, primarily in the countryside, but may also create a safe market for the absorption of agricultural ingredients, which contributes to the income security of farmers. Increasing the percentage of higher added-value products to 80 per cent within agricultural and food industry exports by 2020 is another important goal.
Due to the increasingly hotter summers and the ever less predictable distribution of precipitation, the risk of drought has increased significantly in Hungary. Therefore, the extension of watered areas is a fundamental demand on the part of local farmers. The programme contributes to climate change adaptation, and consequently to the enhancement of the security of production as well. At the same time, there will also be scope for the installation of effective frost prevention systems in horticulture.
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The Government continues to support the establishment and reinforcement of the businesses of young farmers with sizeable grants, amounting to some HUF 79.5 billion, thereby supporting a change of generations in agriculture.
The agricultural-environmental and ecological farming grants programme will be re-launched as of 1 January 2016. The programme has undergone major changes, and has become more targeted and more effective from an environmental point of view.
Rural municipalities may choose from a number of development and project grants; they will have a chance, inter alia, to refurbish roads outside residential areas, to build local producers’ markets, and to modernise buildings for improved energy efficiency.
Some 5 per cent of the total funding will be available for the purposes of the LEADER programme during the next period, thereby ensuring the nation-wide coverage of the LEADER programme.
(Prime Minister's Office)
