Agricultural subsidies and the Fidesz oligarchs

The news about Fidesz oligarchs speculating on agricultural land simply doesn’t want to go away. The fascination is understandable. Both newspapermen and readers like dirt, and there is plenty of it in this story.

On center stage is József Ángyán, an agricultural expert and professor at Gödöllő Agricultural Academy, whom some consider a hero and others a madman. Ángyán is no politician even though he has been sitting in parliament ever since 2006. He got there through Viktor Orbán’s benevolence. Or, to be more precise, because his services were needed to implement the Fidesz strategy. His radical ideas about the future of Hungarian agriculture were useful at the time when he and some others, like István Jakab and Gyula Budai, managed to turn small farmers against the socialist-liberal government. He was useful when the pro-Fidesz farmers blockaded roads and drove their tractors to Budapest. Ángyán’s services were rewarded with a high government appointment. In 2010 he became undersecretary of agriculture. Orbán chose Sándor Fazekas, mayor of Karcag and an old Fidesz politico with no background in agriculture, to be the minister.

After reading a lengthy interview with József Ángyán, it seems that Ángyán believed that the ministerial post was going to be his. So he had to be sorely disappointed. However, he was assured by Viktor Orbán during his Felcsút “interview” that the agricultural policy of the Orbán government would be modelled on the Ángyán plan.

What was the Ángyán plan? Instead of large-scale agriculture he envisaged small, 40 to 50 hectare farms cultivated by individual families. Ángyán claims that this is the European model that is most appropriate for Hungary. Small farmers obviously found this idea very attractive and most of them were looking forward to a political change. They were enthusiastic supporters of Fidesz.

By contrast, many experts object in the name of efficiency to an agricultural model based on small holdings. They claim that Ángyán’s plan would have created a Hungary that would resemble an outdoor museum, something like Williamsburg in the United States, in which the designers recreated a world that no longer exists. Time is being artificially stopped.

Outdoor museum

Outdoor museum, Göcsej

Agricultural experts thus welcomed József Ángyán’s resignation about a month ago. At last, they said, Hungarian agriculture will move away from small, inefficient family farms of a few hectares and turn to the formation of large, profitable farms where expensive machinery can be efficiently utilized. It is also likely that Viktor Orbán himself wasn’t exactly heartbroken because one suspects that his embracing Ángyán’s plan five or six years ago served only political purposes: to gain the support of the countryside. It is likely that he himself knew that large farms of thousands of hectares are much better suited to the kind of agriculture practiced in Hungary.

So far so good. But in Orbán’s Hungary the good always has a dark side.

If large tracts of land are distributed for long-term lease at a low cost, the beneficiaries could be people who are committed Fidesz supporters and/or friends. This is exactly what happened while Ángyán, the idealist, watched the process in horror. Some people in the village of Felcsút, where Viktor Orbán grew up and to which he recently returned as a part-time resident, benefited enormously. I already wrote about the Felcsút scandal once. Here I would like to address the business side of the government largesse handed out to friends and supporters.

Obtaining large tracts of land via a low-cost, twenty-year lease translates into a huge profit potential. First of all, the food supply is shrinking and Hungary’s climate and soil are favorable to agricultural production. European Union subsidies also help considerably. Earlier Hungarian farmers got only a fraction of the subsidies handed out to western farmers, but by now they are pretty much on par with the sums a French or German farmer gets. That is, 300 euros or 100,000 forints per hectare. The annual cost of the lease per hectare is only 25,000 forints. So if a farmer manages to get 100 hectares, his yearly income from the subsidies alone will be 7.5 million forints even if he leaves the land fallow. If he has 1,000 hectares–as, for example, Lőrinc Mészáros, Viktor Orbán’s friend in Felcsút managed to get–he will receive the tidy sum of 75 million forints a year. On top of that comes the actual profit from the crops.

But, says Ángyán, it is possible to illegally pass on the land for cultivation to others who then pay rent for the use of the land. A hectare can be leased for about 25,000 forints. Thus, claims the former undersecretary of agriculture, without buying any equipment or investing any money in the land the lessee could easily realize about 100 million forints a year from 1,000 hectares.

According to Origo just in the county of Fejér where Felcsút is situated 90% of all the available land for long-term leases went to eight concerns while the other 10% to twenty-one other applicants. The lucky eight can now cultivate almost 5,000 hectares. Although on paper the maximum size of a plot was to be 1,200 hectares, one group, the Csákvári Mezőgazdasági Zrt., received 1,830 hectares, i.e. 37% of all available land in the county. Who is behind this business? György Antalffy and his family received 658 hectares. The current manager of the company received 192 hectares and one of the employees got 264 hectares. Thus, strictly speaking, the per-family limit was observed. In reality, these people formed a consortium to lease this farmland. Most of the people involved in the transaction live in Budapest and have practically no connection to agriculture. Obviously, these people are not small family farmers but business people making a killing.

The Orbán government is not even trying to hide its supporters’ insatiable appetite for enrichment. Members of the government and supporters of the party feel entitled to the benefits that being in power offers. After all, they stood by Fidesz through eight lean years. It is now time to take advantage of the situation. Wholesale corruption reigns in Hungary. We know what’s going on in agriculture and we’re starting to have a fair idea of what’s going on in industrial concerns owned by friends of Viktor Orbán.

Although certain people are getting very rich, in part thanks to the EU’s convergence program, the country’s economic growth has stalled. While the government lauds divergence over convergence, it is nonetheless eager for the handouts. How much flows to the coffers of Fidesz in one way or another is unquantifiable but I would guess not insignificant. To the victor (and to Viktor) belong the spoils.

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petofi
Guest

I can only guess that the EU’s sudden agreement to allow IMF negotiations are in part to lay open, like an oyster, the government machinations such as the land distribution crime.
I can’t imagine that the EU will condone, and support with transfer payments, such actions of Orban and the Fidesz government.

anecdote
Guest

“…Hungary’s climate and soil are favorable to agricultural production.”
There was once a Danish king of England called Knut (Canute). As legend has it, he tried to demonstrate his omnipotence by sitting on his throne by the sea and commanding the tide to roll back.
Perhaps a modern version of this could be OV sitting on a “hokedli” or stool in the middle of the Great Hungarian Plain and ordering climate change to go into reverse.

LwiiH
Guest

And the local news talks about land held illegally by foreigners. A tactic to deflect attention by inflaming the xenophobic masses??????

Guest

The xenophobic masses vote for Jobbik. The opportunistic masses vote for Fidesz. How many masses are there?

Törpefejű
Guest

Generally speaking, the outline of this story is yet another confirmation of the Orban modus operandi. In other words: get the rural voters to support Fidesz at the start, luring them into seeing the party as the protector of the small farm. Then, shamelessly betray them in favour of a second, even more sweeping “collectivisation” of Hungarian agriculture into corporate kholkozes run by Fidesz-linked oligarchs – let’s call them, for a change, Fidkozes… That the former farmers getting turfed off their land and proletarianised into a new serf class will see Jobbik as their only defenders – and vote accordingly – seems a small detail.
Just another step in the dangerous game that VO is playing with the “unrespectable” Right. Or maybe he’s even one step further ahead – with the ordinary Hungarian seeing only a return of People of the Puszta conditions from Fidesz and Jobbik “telling it like it is”, perhaps his hope is that the liberal intelligensia (what he hasn’t managed to brain-drain away) will be forced into a tactical support for him, and help him suspend democracy against the Fascism of the downtrodden.
Ugly whatever spin you put on it.

GW
Guest

In effect, Hungary is returning to a country in which the land-holding gentry live in the city and sub-let their land to small tenant farmers. This probably is not unexpected, given Fidesz’s nostalgia for olden days, but the fact that this has now been created via a kleptocratic twist shows more than ever the determination of the government to divide the country into an elite group of connected haves and a mass of have-nots. What a cynical way to start the 21st century.

The Hungarian Comedian
Guest
The Hungarian Comedian

Tragic.
I’m pretty sure that if several small farmers would work together and lease equipment together, they could achieve the same efficiency as the ruthless corporations.
What amazes me is that they don’t even bother to cover up the corruption. It’s almost like they are taunting people, because they think they can get away with it.
Almost makes you wonder if the upper tier of the Hungrian government is a bunch of retarded bullies that are incompetent and are in fact mentally challenged, and this is the only way they can achieve, by breaking the rules and recruiting people for their loyalty not their professional competence?
Soon enough; If you dare to speak up they will request your address, send the TEK after you, and sentence you in Tunde Hando, Joszef Sajer, and Orban Viktor court.
Democracy my @ss. This is a mix of communism and fascism that they are trying to hide under the name of progress, but all it will become is a central european mental institution because people wont be able to deal with what is happening, or run for the borders because the don’t want to become a Fidesz colony.

Odin's Lost Eye
Guest

@GW and Hungarian Comedian. You do not see the half of it.
Yes the great landowners sub let their land but there are other clauses in the letting agreement.
One would be “you must sell your products to XYZ .” “You must buy your requirements from ABC” and so on. XYZ pay you below rock bottom prices for your products (only they do not pay as they say that they have not paidsd etc.). ABC is sold to a Non Hungarian outfit and goes bankrupt owing god knows how much including AFA and other taxes.
XYZ was owned by a company called ‘Ace Jack Queen’ and so on But they were all owned by the Landowner.
The farmer who now has no money at all gets dunned for debt his stock is seized and he is thrown off the land now penniless and homeless. A new Klutz takes over. This cycle repeats its self every 3 years
Well the landowner only has two ‘Rollers’ and Two Bentlies and he needs another Ferrari.

GW
Guest

Odin’s Lost Eye,
In other words, it’s the worst of Serfdom and Sharecropping. Fidesz’s romance with pre-WWI Europe continues.

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[…] of government land; the leases were given to friends and relatives of Fidesz politicians. You can read more about Ángyán in a post entitled “Agricultural subsidies and the Fidesz […]

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