Self-sufficiency in agriculture and energy in Hungary?

Both Fidesz and Jobbik emphasize the possibility of greater self-sufficiency in agriculture and energy, but it seems that according to experts that proposition is not realistic. Both political programs give considerable space to praising Hungarian soil conditions, the country's good climate, low population density, and the presence of plentiful alternative energy sources. According to both programs the country doesn't make good use of its possibilities currently, and both promise an entirely different policy if in power. Jobbik's program goes into details; Fidesz's, most likely wisely, remains on the level of generalities.

The chapter of the Fidesz program that deals with these questions was written by György Matolcsy who in my opinion is not a good economist. Unfortunately it looks as if he will once again have a very important role to play in a possible new Orbán government. He was responsible for the "new course" the Orbán government embarked on that led to, admittedly with considerable help from the Medgyessy government, the economic disaster we have been witnessing ever since 2006 or even earlier. In any case, in Matolcsy's opinion "the good soil and the favorable climate are great treasures in a time of food explosion." Jobbik goes further. In their program the high quality soil is the token of self-sufficiency in food production. Both programs talk about the inferior quality of foreign produce which should be replaced by the superior home grown products.

As for the Hungarian soil. It is apparently better than in some of the neighboring countries. In addition there is plenty of it being used for farming. According to Gyula Módos, an economist specializing in agriculture, 56% of the country is used for agricultural production, a figure that is considered to be very high. Until 1989-1990 Hungary was indeed self-sufficient, but since then there has been more "specialization" in Hungarian agriculture. As a result there is more than enough grain that must find foreign buyers while the country must import pork. (Sounds like the law of comparative advantage to me.)

According to Módos, the quality of Hungarian produce by and large is good, yet more than the targeted 20% of total produce being sold in supermarkets comes from outside Hungary. The reason is price. It's hard to imagine, but imported produce even with the added cost of transportation is cheaper than natively grown produce. The price gap is due mostly to technological innovation, larger farms, and higher yields in the West. The smaller Hungarian family farms simply cannot compete with them. Given the free market principle of the European Union Módos and others can't see any change in that situation in the foreseeable future. According to Módos more than 50% of the outlets are in foreign hands and the foreign owner doesn't care where the produce comes from. I must disagree with the anti-foreign bias of our expert. It doesn't matter whether the owners are Hungarian or not; they are interested in buying at the best possible price. And the customers are interested in buying the products as inexpensively as possible. It has nothing to do with nationality.

Jobbik's "expert" blames the foreign supermarket owners for the high prices of Hungarian goods. It's beyond me on what basis he says that. He would negotiate with supermarket owners and would pretty well force them to buy Hungarian products. Given the razor-thin margins of supermarkets, the owners would have to pass the extra cost on to their customers. Moreover, Jobbik argues, Hungarian farmers should have a share of the commercial network. I guess they envisage foreign owners leaving the country and Hungarian customers happily paying much higher prices for native agricultural products.

As for energy self-sufficiency, this is a real pipedream. A few months ago Viktor Orbán ventured into this fantasy land. Those who know something about energy and the country's lack of it spent weeks refuting his vision for the future. However, that didn't make Fidesz more cautious; its program explicitly calls for a "fight against energy dependency." Iván Gács, associate professor at the Budapest Technical University, considers the idea "absolutely unrealistic." In the modern world, "energy independence is totally unimaginable." It is "a totally provincial idea." Energy consumption will only grow in the future. Dependence on oil, gas, and coal may stabilize or even decrease, but alternative energy will not replace these fuels in the foreseeable future.

Both Fidesz and Jobbik put a lot of emphasis on alternative energy in their programs. According to them Hungary has ample sources of alternative energy that will provide the country with energy independence. Jobbik is enamored with geothermal energy but there is a serious problem with that. Currently 95% of the houses are heated by natural gas. To switch these houses over to geothermal energy would cost a mint and some experts say that the payback in energy savings might take more than 20 years. Even for new construction the initial cost (at least in the U.S.) is prohibitive.

As for renewable energy it is not very efficient and most likely could satisfy only a small portion of the country's needs. The Hungarian climate is not conducive to the use of solar energy. Jobbik talks about biomass, hydro, wind, and geothermal energy sources, but their expert admits that out of all these only the use of hydro energy is economical. And the Hungarian public is dead set against hydro energy.

Fidesz considers Hungary's relative richness in thermal waters a great source of tourism. In fact, they think that Hungary could be the center of medicinal tourism in Europe. That could be one of the economic activities in which Hungary has a comparative advantage. However, there is a problem here (and I'm not taking sides on the curative value of thermal spas). One must be very careful not to overuse the supply. One can take out only as much as is being naturally replenished. There are several spas that at the moment are endangered: Hévíz and Hajdúszoboszló, for example. According to current research Hungary has pretty well reached the maximum capacity of thermal water resources. As one expert said: "One can't expect great surprises."

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Pete H.
Guest

I was led to your blog about a week ago and since then I have had the pleasure of reading about 30 or so of your posts.
Thanks for your interesting and informative window into Hungary!

Paul
Guest

and what of the mszp’s energy policy? do they even have one? or is the mszp just too holy to criticise?
pete, i agree there is some interesting information on this blog. but never forget that you only get half the story here – the left half! criticism of the disastrous hungarian socialist/liberalist government is difficult to find here.

whoever
Guest

…and one should add that the “left” side in Hungary amounts to the “right” pretty much everywhere else. I can’t believe Eva is criticising biomass technology here… it might be expensive, but it works in Sweden.

GDF
Guest

Eva: “Jobbik is enamored with geothermal energy but there is a serious problem with that. Currently 95% of the houses are heated by natural gas. To switch these houses over to geothermal energy would cost a mint and some experts say that the payback in energy savings might take more than 20 years. Even for new construction the initial cost (at least in the U.S.) is prohibitive.”
There is another problem with geothermal energy: apparently it causes earthquakes. You can read more about this at http://topics.nytimes.com/top/news/business/energy-environment/geothermal-power/index.html?inline=nyt-classifier

Eva S. Balogh
Guest

whoever: “I can’t believe Eva is criticising biomass technology here… it might be expensive, but it works in Sweden.”
You’re mistaken. I have no opinion because I don’t know enough about it. Those Hungarian experts criticized it who were asked to give an opinion.

Eva S. Balogh
Guest

Pete H.: “I was led to your blog about a week ago and since then I have had the pleasure of reading about 30 or so of your posts. Thanks for your interesting and informative window into Hungary!”
Thank you. I hope you will stick with us.

Pete H.
Guest
Paul, Well if you can point me to an English language (my Hungarian reading skills are only at about the 5th grade level) source for criticism of the socialist/liberalist government that isn’t filled with jew this and jew that, and homo loving this and homo loving that, I’d be glad to check it out. So far I have been unable to find anything I would call level-headed and well sourced analysis on the MSZP from someone with a conservative perspective. At this point in Hungary’s history, analysis of the soon to be governing Fidesz and the threats posed by the Jobbik is much more relevant anyway. Concerning renewable energy resources in Hungary. According to published maps Hungary has low to moderate solar energy potential (as poor as Alaska and as good as northern New England). Wind power potential is on the very low end of the scale for Europe. I think Hungary could generate a moderate amount of its energy from renewables and increased efficiency, but I believe Hungary will be a net importer for the foreseeable future. In addition, you can’t become agriculturally self-sufficient if you are also going to rely on your agricultural land to provide a meaningful… Read more »
Odin's lost eye
Guest
Energy generation is one of my ‘armchair hobbies. As you rightly said in the article and what Fidesz want to do is impossible using the conventional (as used elsewhere) method. The use of ‘wind farms’ (wind generators) and ‘pumped storage’ systems, these store surplus energy from the ‘wind farms’ (and any other sources). They then release stored energy in time of need and are not possible in Hungary. If you want to see one or two go to Google Earth and have a look at Dinorwig Llanberis or the Tanygrisiau units. They are not possible because Hungary has no real mountains. The Danes have an idea for a weight and bladders system. There is another way of storing electricity which has not been used because it is not needed elsewhere. My idea uses known technology, which will work and will need little in the way of development. The excess –to requirements- can be stored for years (or sold) as one chooses. Hydro electric is thought to be difficult to use because of ice formation in the winter and the need to dam rivers. There are again two other ways one of which is seasonal and the other is an all… Read more »
Guest

“Self-sufficiency in foods” – well anyone remember the fantastic Hungarian film “A Tanu” ?
That “first Hungarian orange” was a masterpiece!
There was a similar thing in Nazi Germany “Good Germans only eat German bananas”.
Of course we have globalisation also in foods – in summer we only eat Hungarian paprika, but in winter ?

Eva S. Balogh
Guest

wolfi: “Of course we have globalisation also in foods – in summer we only eat Hungarian paprika, but in winter”
I remember only too well the winter fare in Hungary in the 1950s. Horror!

Eva S. Balogh
Guest

One more thing about Tanu and the Hungarian orange.
Here is a quote from a forum:
From Hungarian film “The Witness”
re. the absurdities of the socialist system, there is a famous line in this film, when the Hungarian orange (in reality a lemon?) is presented to the Party representative:
“a magyar narancs – kicsit zöld, kicsi savanyú, de a miénk”
“the Hungarian orange – a little bit green, a little bit sour, but it’s ours”
Let me add that Fidesz’s orange logo goes back to A Tanu. On the first day of parliament in 1990, their members brought oranges to the whole House.

Guest

Thanks, Eva! (I hope I may call you by your first name)
I just told my Hungarian wife – even she didn’t know that story about Fidesz and the oranges.

GDF
Guest

I find it interesting that nobody here mentions nuclear energy. I don’t know whether Hungary has Uranium or not in its ground, but I assume it is much more economical to buy it than oil or natural gas.
I know that there are concerns about the safety of nuclear power plants; my opinion is that today’s plants, properly operated and maintained are safe. They cause no air pollution and no carbon emissions.
A few nuclear power plants would probably make Hungary substantially energy independent (especially based on the fact, that even cars seem to become electrically driven).

Eva S. Balogh
Guest

wolfi: “Thanks, Eva! (I hope I may call you by your first name.”
Sure thing! Everybody calls me Eva. Always did. My students too.

Eva S. Balogh
Guest

GDF: “I find it interesting that nobody here mentions nuclear energy. I don’t know whether Hungary has Uranium or not in its ground,”
There was uranium near Pécs but it is closed now. I don’t know why it is closed. Perhaps they exhausted the supply.
As for nuclear energy, as far as I know this government is planning to expand Paks. Moreover, if I remember correctly when Orbán went to St. Petersburg he allegedly promised Putin that the Russians could do the work there. This blank check to the Russians wasn’t received well by the other side.

Mark
Guest
“Energy consumption will only grow in the future. Dependence on oil, gas, and coal may stabilize or even decrease, but alternative energy will not replace these fuels in the foreseeable future.” I don’t think it would be a bad thing to have a debate on real energy needs, but a kind of partisan slanging match over energy dependence/independence is not really going to get us very far. In the past forty-eight hours, not FIDESZ or Jobbik have been pointing to the unsustainability of current energy policies, but an authority no less than the World Bank. They are warning that economic growth, once it resumes is at risk from an “energy crunch” because of a growth in demand a few new sources of supply. Furthermore, whether or not one believes “peak oil” is imminent, once global growth resumes, supply of fossil fuel – including all that gas – is unlikely to meet that demand, making both oil and all that gas for heating Hungarian homes very expensive. And that is without even mentioning the issue of climate change. The World Bank is suggesting high taxation of carbon to introduce clean technologies, expand the use of renewables and introduce an energy efficiency… Read more »
Mark
Guest
Pete H.
Guest

GDF, Hungary’s desire to be energy independent is a part of her desire to be economically independent. European nuclear reactors have a start-up cost of between 3 to 4 billion euros.
I am guessing Hungary does not have that kind of capital at hand.

Odin's lost eye
Guest

Re the Uranium mine near Pecs. The Russians ripped most of it off to feed their Atomic Bomb project. It was one of the things which helped to stoke up the October rising in 1956.

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