The Hungarian Government concluded a Strategic Cooperation Agreement with the Bonafarm Group on Friday. Before signing the agreement, Péter Szijjártó called agriculture a strategic sector of the national economy.
The Parliamentary State Secretary of the Ministry of Foreign Affairs and Trade recalled on Friday in Parliament that agriculture contributed 4% to GDP in 2013 and its output played a major role in turn-around last year when Hungary’s economy finally embarked on a growth trajectory. Both employment and investments grew spectacularly within the sector.
To illustrate the Group’s role, Bonafarm Chief Executive Attila Csányi explained that during the past ten years the members of the Group had invested some HUF 61 billion (EUR 193 million), with a further HUF 50 billion in investment projects planned during the next seven-year period.
Péter Szijjártó noted that according to the latest data, published on Friday, the total volume of investments in Hungary increased more than 21% in the second quarter of this year, and the high growth rate also supports the positive expectations relating to growth this year. According to Mr. Szijjártó, the decisions on investments to be made confirm the soundness of the Government’s economic policy aiming at turning Hungary into Europe’s production centre and at attracting the largest possible service-providing and research and development capacities to Hungary.
Mr. Szijjártó pointed out that developments in exports have a major impact on the output of the national economy in which Hungary’s agricultural export perspectives are of particular importance. Hungary’s agricultural exports amounted to a record EUR 8 billion last year, accounting for some 10 % of total Hungarian exports, and about half of the positive foreign trade balance was the result of agricultural output.
The State Secretary continues to have positive expectations concerning Hungary’s agricultural export perspectives, since the changes taking place in the target markets affected by Hungary’s “opening to the east” and the transforming patterns of consumption in these countries offer good opportunities to market high quality Hungarian food products. He referred to the Chinese market as an excellent example, adding however, that success will also require technological development within the Hungarian food sector. The Government is also facilitating this process by providing funding; for example some HUF 200 billion (EUR 635 million) will be available for supporting investment projects within the food industry between 2014 and 2020, he emphasised.
Mr. Szijjártó noted that the Bonafarm Group plays a highly significant role in Hungary’s food industry job market, with more than 5600 employees at a total of 38 plants. The Group is working on research and development programmes with the universities of Kaposvár and Szeged, while their development projects within the animal husbandry sector cover the entire verticum of production and processing within the Group. Moreover, Bonafarm is particularly strong in those export markets that are of outstanding importance for the improved performance of Hungary’s agricultural exports, including Germany, Romania and Slovakia.
Mr. Csányi spoke, among other subjects, about the fact that Bonafarm is a group of companies that organises in-house production systems and divisions in a vertical structure, and these organising efforts are also extended to hundreds of farmers who do business with the Group on a daily basis.
“We consider the message that 70% of EU funding was drawn down by 10% of the country’s agricultural enterprises to be unsound communication”, he said, adding that it would be much closer to the truth to say that since funding intensity was in the 40–50 % range, only 10% of farmers were able or willing to undertake investment and development projects.