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The Hungarian land market after EU Accession

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  • Biro, Szabolcs

Abstract

Besides its natural potential, Hungarian agriculture's major current advantage is low land prices and rental fees. Economic theory suggests that as Hungarian economic performance approaches the EU average, production costs will also become equal. Increasing land prices, generated by higher rentals fees, will mean landowners continually remove more agricultural income and Hungary’s competitive advantage will dwindle. Moreover, subsequent capital withdrawal will lead to weaker agricultural investments. The aim of land policy is to assist the land use of those farmers who make a living from agricultural production. To increase competitiveness one needs income security and policy efficiency meshing land ownership with land use for those farms wishing to acquire more land This is particularly true for full-time farmers and for farms that can become commercially viable. Presently the land market is unstable. This instability, coupled with rigid legislative controls on a rising desire for land acquisition, could lead to escalating land prices. A sudden surge in prices would hurt hands-on farmers, and strengthen the bargaining power of those landowners who are not actually engaged in farming.

Suggested Citation

  • Biro, Szabolcs, 2008. "The Hungarian land market after EU Accession," Studies in Agricultural Economics, Research Institute for Agricultural Economics, issue 107, March.
  • Handle: RePEc:ags:stagec:46662
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    File URL: http://purl.umn.edu/46662
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    References listed on IDEAS

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    1. Pavel Ciaian & Johan F.M. Swinnen, 2006. "Land Market Imperfections and Agricultural Policy Impacts in the New EU Member States: A Partial Equilibrium Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(4), pages 799-815.
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