Tilting at Windmills: Why Agriculture is Such a Hot Topic in Hungary

While plagued by a somewhat tumultuous past, Hungary has been blessed with excellent-quality soil. The two together mean that the question of property rights on arable land has always been a sensitive one. Sometimes too sensitive. Two world wars, a short-lived Nazi regime and over 40 years of communist rule caused many social convulsions, including the nationalization of privately-owned land. Following the changes in 1989, much of this land was re-privatized.

When the question of ownership of arable land comes up, certain groups become quite vocal about property rights. Among the loudest, though not necessarily the most knowledgeable about agriculture, are those that insist that foreigners should be forbidden from owning farm land. They appeal to emotions about Hungarian territory and fear losing control of Hungarian land. That’s touching a nerve, of course. Losing land to others remains a subconscious fear of many Hungarians since the peace treaty of Trianon, which resulted in the nation losing two thirds of its territory to neighboring countries. The topic becomes easy fodder for any radical right-wing group that plays to national sentiments. And those in government have to deal with these national sentiments somehow.
 
So it is not just for economic reasons that there has been a moratorium since 1994 on the purchase by foreigners of Hungarian arable land (a moratorium that was extended even after Hungary joined the European Union in 2004). This moratorium tried to keep foreigners out of the market as long as the price of good Hungarian soil remained so cheap relative to other EU countries - and to try to calm the nerves of the nationalists. The problem is that - partly due to the strict regulations - the Hungarian agriculture is still not as competitive as it could be, and the difference between the price of land in Hungary compared to western European countries remains significant.
 
Nevertheless, the moratorium will finally come to an end in May 2014, and citizens of other member states of the EU will be able to buy Hungarian land. The current conservative government tried to navigate a delicate course, complying with legal obligations in the EU treaties while appeasing the sensitive souls of the “guardians” of the land.
 
Once the moratorium ends next year, citizens of the (now 28) EU member states will have the same rights to buy Hungarian land as do Hungarian citizens. Citizens from states outside the EU will still not be able to buy land. Those who want to buy land will have to meet the definition of a "ploughman", according to the new law, one who has qualifications in agriculture and who has been working in this sector in Hungary for at least three years. Those who meet the criteria will have to use the land for the next few years in the agricultural sector. There will also be restrictions on the amount of land that can be purchased. And, finally, a local council of farmers and the local state office for agriculture will have to agree on the purchase. Ultimately what this means is that only those will be eligible to buy Hungarian land from 2014 who have actually been living in Hungary and working in the agricultural sector and plan to do so in the future. The radical right-wingers shouting treason and claiming that the holy land of the Hungarians is still in danger don’t seem aware of these details.
 
The other big issue is the situation regarding larger pieces of land. There is a growing sentiment against the "landowner oligarchs" in the Hungarian public, especially from the members of the radical left- and right-wing movements. If only it didn’t sound so much like Communist propaganda! With the new law there will also be restrictions towards large property. However, under certain conditions, it will be possible to buy larger pieces of land in some sectors of agriculture - where larger amounts of land are necessary to run a certain business. The government has stated that it would like to reduce the proportion of large property holdings from the current 50 percent to around 20 percent of all land property in Hungary. The government would prefer to get there not by imposing strict rules by through long-term natural changes in development of the agricultural sector.
 
Finally, there is another problem to be solved: there is a phenomenon in Hungarian agriculture called "pocket contracting" by which Austrian farmers over the last 20 years have been renting – illegally – cheap but very good farm land from Hungarian landowners, especially in the western parts of Hungary. Now, the government wants to remedy this situation, perhaps bringing an end to the era of these illegal "contracts". The Orbán Government seems to have no end of international controversies and disagreements, and this issue with Austria could be another one on the horizon.

While the moratorium will come to an end in 2014, the new Hungarian regulation on arable land will be one of the strictest in the European Union. But the same tough, conditions will apply to citizens of Hungary as well as of other EU countries who are in the market for land in Hungary.
 
Hungary’s radical right-wing party Jobbik tried to cause a spectacular scandal in parliament, when its activists occupied the podium and interrupted the session, claiming the passage of the law amounted to an act of high treason. But that is simply not true. The radicals once again tilt at windmills. This episode provides further confirmation that Jobbik and the governing Fidesz will never form a coalition.