Hungarian government tackles farmers' historic mistrust of co-ops

The Hungarian department of agriculture has been using a range of measures to tackle the national “historic mistrust of co-ops” in the fruit and vegetable production sector.

On a recent trip to Hungary, the Irish Farmers Journal spoke to department officials and agri-food producers about the challenges facing agriculture and environment in the country.

To help streamline production and keep the sector more stable, the government has been pushing farmers towards producer organisations by only providing subsidies to co-ops.

Speaking to the head of department responsible for agricultural markets Márton Bittsánszky, he said they need to change people's perceptions of how useful co-operatives are.

“[Some farmers] think that they know everything. In producer organisations, there are managers, workers, people for advice, etc. But some farmers say they are owners and they know what to do.

“For working together, it is important that people see for the [vegetable] market, they need this type of production.”

Subsidies

As a way to push more growers back towards co-op production, the Hungarian government only provides subsidies to co-op organisations.

Although they continue to own the properties, the co-ops can then distribute technology and facilities to farmers to help improve their farms.

Bittsánszky said that farmers are not burdened by major infrastructure costs when setting up their farms.

“It’s difficult because to have a stable producer you have to invest a lot in knowledge and in storage. It costs a lot, so in the short term, it might mean [producers] get less for their products but they don’t have to pay for input materials.

“For example, a greenhouse is built on the premises of the producer, the co-operative owns the greenhouse, but the producer can use it.”

History

According to paprika pepper grower Imre Janó, historically co-operatives were compulsory and were run in an unfair “socialist way” for many years, which saw the farmers receive low prices and little leeway for change.

After the great recession in 2007, many co-ops went out of business, which left the vegetable sector in poverty for many years.

Janó said modern co-operatives provide more incentives and allow farmers to choose what they want to do.

“That form of co-operative was stricter and more rigid - people had to do things. This organisation is a lot looser; people volunteer instead.”

However, Bittsánszky said that some organisations still operate similarly to how they did in the past.

“There are different kinds of organisations. We have lots who have learned and have a good management, but we also have organisations that are working in the old manner and it’s difficult.”

Benefits

Producer organisations can also provide advice, marketing and packaging, which can cut down on the cost and workload for individual farmers.

In addition, co-ops can increase the bargaining power of farmers and help them to sell their produce abroad.

The South Plain Gardeners DélKerTÉSZ gives each a member of their co-operative an equal vote on changes to their production, no matter how big or small the producer is.

Co-op CEO Sándor Nagypéter said that their organisation is run to provide more jobs and improve farming.

“If you have an organisation like ours, it’s like a construction with several pillars, it gives you stability. It’s very difficult to maintain, but it is stable.

“We want to keep young people here, to hire local people, to increase employment. We want to give back what we get from the community.”