You may have noticed that I rarely touch upon topics relating to agriculture. First, because I don’t know much about it and second, because I have bad memories of poverty-stricken southern Baranya County villages from my childhood. When my grandfather died and my father inherited a sizable farm, he decided to prepare his only child to be a future landowner. At the age of twelve I was required to learn how to grow various grains and vegetables. One week corn, the next week rye. It was loads of fun. In later years as high school students we were forced to spend at least two weeks during the summer hoeing cotton plants. Back breaking work for city girls. All in all, agriculture and I didn’t mix well.
Yet here is this new agricultural law before parliament which at first glance has the same effect on me as my early encounter with the Hungarian countryside: outrage. As I started to learn something about this new law, my free spirit revolted: what do you mean that I couldn’t buy land if I were crazy enough to want to do so? How can it be that even if I met the stringent requirements for land purchase the state could still interfere in a private transaction between the seller and the buyer? The state can decide whether it wants me to buy the land or not. Depending on whether the powers-that-be like me or not. How can that be legal? What kind of nonsense is this?
Yes, it is nonsense but it will be law soon. There is a lot of talk about preventing foreigners from acquiring Hungarian agricultural land, but the fact is that in the long run preventing it is almost impossible. At the time of Hungary’s accession to the European Union Hungary received “derogation” of the union law that allows the purchase of agricultural lands across borders. That derogation would have expired in 2010 but the Bajnai government asked for an extension. The final touches on the negotiations fell to the Orbán government. Hungary received another four years of respite from foreign land purchases that will expire in May 2014.
The new law on agriculture restricts the size of land holdings and sets stringent requirements as to who can purchase land in the first place. Let’s start with the latter. The law uses a somewhat old-fashioned word for “farmer.” In the old days “paraszt” (peasant) was widely used, but ” paraszt” also has the connotation of an ill-mannered boor and therefore there is a tendency to avoid it. Instead, especially before 1945, the word used in more genteel company was ” földműves,” cultivator of the land. But lately one most often hears about “gazda ~ gazdák (farmer, smallholder) so I was surprised to hear that I would have to be a ” földműves” in order to own land. And not just any old “földműves” but someone with a secondary education in agriculture (középfokú szakképesítés). No wonder that Béla Turi-Kovács, Fidesz MP and a lawyer who owns 50 hectares of agricultural land, suggested that perhaps “elementary education” in agriculture would suffice, adding that maybe already in elementary school children could start learning something about growing corn. My father was ahead of his time!
The only exception to this “földműves” rule is land acquired by inheritance. However, there are some diehards in Fidesz who don’t like this exception. According to them, only those people should own land who will cultivate it. As usual, the Orbán government favors the churches in this law: although churches cannot purchase land, they can inherit it or receive it as a gift. Like in the Middle Ages. The happy “földműves” who manages to get some land must live within a twenty-kilometer radius from his landholding. The only exception is for farms specializing in animal husbandry. I guess we can call that exception the Lex Csányi, named after the billionaire CEO of OTP whose company, Bóly Zrt., owns 20,000 hectares and a large cattle farm.
Now we can move on to the size of the landholdings. An “őstermelő” can own a maximum of 50 hectares. An őstermelő seems to be someone who has no employees and who grows most of his crop for his own use or for selling it locally at farmer’s markets. Then there is the individual entrepreneur (egyéni vállalkozó) who can own up to 300 hectares. Third, there is the family holding (családi gazdaság) that can have between 50 and 500 hectares but with close relatives can go up to 1,200 hectares. I would call that law Lex Mészáros after the mayor of Felcsút and the director of Orbán’s favorite Puskás Football Academy. The extended Mészáros family has about 1,200 hectares.
There is another category and that is the “agricultural company,” which can lease land. The size of the holdings depends on the number of people employed by the company. With ten employees the firm can lease only 300 hectares and for 1,200 hectares one needs 100 employees. Interesting! A family of five or six people can own 1,200 hectares but if the land is not held by an individual but by an agricultural company then this firm needs 100 employees to cultivate the same amount of land.
György Raskó, an MDF member of parliament in the 1990s and an expert on agriculture who has a fairly large farm, considers this new law a disaster. To him it is clear that the government wants to break up the existing well functioning large farms and give the land to its own clientele. Most of these larger farms lease the land for 20-25 years, after which the state can simply take the land back from them. Those who received land in this way in the last few years are relatively secure, but there are many whose lease is up in the near future. According to Raskó that may mean about 150,000 hectares per year. Altogether larger farms currently own about 1.5 million hectares. These people put a considerable amount of money into modern equipment and therefore, although they might receive some compensation, their financial loss will be considerable. Raskó claims that the change in the current law will mean a loss of one billion euros to the Hungarian agricultural sector.
An editorial in Népszabadság claims that the new law creates a chaotic situation because the law tries to satisfy two contradictory demands. On the one hand, there is a group of hungry Fidesz supporters who want their share of the national wealth and, on the other, there are Orbán’s old friends, Sándor Csányi of OTP with his cattle farm and Zsolt Nyerges with thousands and thousands of acres, who don’t want to lose their investments. So, what does one do in a case like that? In order to satisfy the first group without injuring the second the government will most likely ruin those large landowners who are not considered to be friends of the regime. So, claims the author of the article, the government will ruin well run and profitable large farms and give them away to small farmers without the necessary capital or expertise. That’s where we stand now.