Evaluation of Factors in Hungarian Agricultural Income

BIRÓ, Szabolcs (biro.szabolcs@aki.naik.hu)

Szabolcs Biro works in Research Institute of Agricultural Economics in Hungary.  He is Head of Department of Agricultural and Fisheries Policy Analysis. Also department lecturer in Agricultural University of Debrecen. Main research fields are CAP strategy analysis and impact assessments. Other research fields are agricultural innovation, modernization and investment and land tenure. 

Research Overview 

The main goal of the present paper is to investigate the impact of agricultural income on production structures in Hungary. For this purpose, we assess the impact of direct income subsidies on farm structure. Among the main determining factors of agricultural income, differences in efficiency of labour is examined by sector and size category. According to the results significant part of agricultural income is provided by direct income subsidies. Large farms do not show efficiency gains originated from concentration alone. Without income support, the number of unprofitable large farms would increase significantly. Further evidence of the importance of the role of direct support in agricultural income – as opposed to economies of scale – is that farmers adjust their production size to support. Since the introduction of capping in 2014, both the number and area of farms over 1,200 hectares affected by the measure have decreased by 40 percent, respectively.

  (Keyword: agricultural income, direct subsidies, capping)