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Schriftenreihe des Europa Institutes Budapest, Band 20:61–69.


Sustainable Development of the Agrarian Economy


The five most important conditions determining the future of humanity are: health, drinking water, agriculture, air and biodiversity that are closely related to agrarian activities. The future importance of agrarian economy is also well indicated by the fact that the social problems of undernourished and famished hundreds of millions cannot be solved without food production, or that agriculture and sylviculture function extensively in space, closely intertwined with the natural environment. It is a complex area reproducing itself and the problems should be handled on global, regional and local levels, thinking and acting systematically. On global level however, meaningful progress can only be achieved if the local level of implementation, local governments and enterprises are made interested.


Indicative changes

The practical realisation of sustainable agrarian development is strengthened by two components:

– 1. Recently the Declaration of the Environmental Councils of the EU was published which deals with the future role of agrarian economy in several aspects and that too faithfully to reality. At last it is clearly stated that, in keeping with the objectives, food production is the most important task besides the preservation of natural resources, in the interest of supplying food to the population of the EU and of the world. This is important also because the superficial view has spread during the past decade that the production of agricultural raw materials and processed products has become unimportant besides several other agrarian functions.

– 2. The significance of the agrarian branches was formerly indicated by their percentage share in the GDP, by the export and import balance, or by the percentage of those employed in agriculture. By now these indicators show small proportions in a national economy, yet the strategic role of agriculture has not been lost, more over it has become more complex, and has taken a definite multifunctional character.

The productive and servicing activities of domestic agriculture and sylviculture, its existence, together with the organically linked countryside and regions cannot be substituted for by any other branch of the national economy, or by imports. It plays a role of strategic importance in food production and in the utilisation of the natural environment and biodiversity, in its protection and even in its enrichment, in the protection of the values of landscape, in the preservation of traditions, in village tourism, in holiday-making and recreation, in the development of the rural conditions of life and settlement, in the living standard of rural people, in the improvement of the social situation of pensioners, of the unemployed and families with many children, in winning over the voters and retaining them in the localities, and also in moderating inflation.

All this corresponds to the efforts of sustainable agriculture, but at times it requires new investments, with additional cost, and may be accompanied by smaller incomes, and it is a question how far the society would appreciate it through the price of agricultural products, or in other allocations and subsidies.


An interpretation of sustainable agricultural development

The sustainable development of agriculture is such a conscious economic development that it is in harmony with the regeneration of natural resources so very important in agriculture, and takes the assimilation capacity of the burdened environment (with manure, chemicals, etc.) into account (Figure 1). Each element of the definition is measurable, can be expressed numerically and may be tested in practice at every level (global, regional, local) and area of sustainability (social, economic, natural).

One may speak about economic development, or a given agrarian enterprise is financially sustainable only if–besides meeting the basic requirements of sustainability concerning natural resources and burdening the environment–it is liquid, in other words if it is continuously solvent and creates surplus, that is income, profit by the end of the production cycle, on the basis of which further developments can be realised and the entrepreneur’s individual needs can also be satisfied. In addition to the returns of agricultural, sylvicultural and other activities compensations, incomes, fees and payments received for the performance of public utility functions play an increasing role besides the returns. They are often called subsidies, though in reality this is not the case.

Economic development absolutely does not mean a drive for quantitative results, but first of all orientation towards quality. It can be safely said that the development of domestic agriculture is qualitatively unlimited. Development stresses deliberate, farsighted action as contrasted to growth that is a factual one and usually the quantitative growth of an economy is associated with it. It should be stressed that all this can be realised only if incomes are bigger than investments and costs.


Natural environment and agrarian development

Under regular conditions agricultural activities by themselves look after their renewable resources, whereas other branches simply use them, often wastefully. Only that would get out of the organic circular process of soil–plant–fodder- transformation by animals–manure and organic wastes and side products–soil whatever is burned (wood, straw, corn-stalk), in other words, resources are reproduced that are being again utilised by agriculture depending on precipitation and the conditions of heat.

This was the cultivation applied by the farms of Hungary in the 1950s, in keeping with the technical and technological level of the times. Later on, in the age of the elimination of domestic food shortage, a drive for quantities, and of ‘industry-like agriculture’ it had disintegrated and changes began after 1990. The use of fertilizers, pesticides and herbicides was reduced though mostly because of the shortage of funds. Unfortunately due to the one-sided dominance of cereals and corn, crop rotation was lagging behind the desirable level, similarly to the use of manure as the stock of animals also shrunk. The recycling of side products and wastes was not sufficient either.

In 2001 agriculture and sylviculture was active on precisely 82% of the area of the country, intertwined with the natural environment. Thus it is a first-class partner of environmental protection, not mentioning biodiversity. The interrelationships and mutual effects between the protection of nature and environment, and cultivation can be best characterised by the system of the pyramid of land use by Erz, presented in Figure 2.

In the country there are ten national parks of a total area of 485 thousand hectares, the protected districts cover 310 thousand hectares, the areas of protected nature are of 26 thousand hectares, areas of local significance are altogether of 37 thousand hectares and are in some relationship to settlements and the cultivating enterprises active in those regions. Therefore agriculture and sylviculture play an indispensable role acting as a buffer, reducing external effects on the environment in the rigorously protected areas.

At the same time agriculture and sylviculture are such green areas that provide indispensable conditions to human life by producing oxygen and absorbing carbon dioxide. In Hungary green surfaces are critically few, particularly in cities and in the agglomerations.

The smaller or bigger gardens and plantations surrounding houses, the orchards, etc. do not only beautify the image of a village but also improve the quality of life and the possibilities of a pleasant life by their many-sided role. In a better off agricultural environment they also look prettier.

Biodiversity and the colourfulness of the biosphere occupy an extraordinary place in the role of agriculture played in the sustainability of the natural environment. The areas of agriculture and sylviculture, occupying an overwhelming area of the country are also the venue of the preservation, protection, reproduction of flora and fauna, and also of its enlargement by improvement and by gene reserves. With the termination of the burning of stubbles, by the plantation of forest belts protecting fields, by promoting the development of groves and shrubbery new habitats are established that favour the survival of flora and fauna.


The cultivation system of sustainable development

In cultivation systems the structure and dimension of activities can be adjusted to the ecological conditions of the habitat, to the utilisation of natural resources and to their regeneration, to burdening the environment and to the assimilation capacity of the environment, so that the profit achievable in the enterprise may allow for continuous development as well. Altogether they represent such a new quality in cultivation, in production, in the acquisition of techniques, in technologies that make sustainable agrarian development possible. Thus sustainability is not a kind of dream and desire but it can be shaped into a tangible reality. Particularly if society honours the public benefit services and sacrifices agriculture and sylviculture make.

Why does one speak about a system? Because all factors of cultivation operate in coordination and in interrelationship and jointly they have a greater effect than working in isolation. Thus the system is a complex one and is developing dynamically with scientific progress and innovation.

Production structure is adjusted to the conditions of the habitat (soil, precipitation, number of sunny hours, surface), to species, areas and to demand. The management of an enterprise is oriented towards quality, the environment and sustainability, it adequately enlarges knowledge by advisory services and extension training.

Learning from a series of years of draught, from anomalies of the climate, a soil cultivation adjusted to dry conditions is expedient within the system, and also the application of rotation of crops and integrated plant protection. Animal husbandry, breeding is conducted in concordance with the requirements of modern animal health protection, that keeps food safety also in mind. The production relations, of plant production, animal husbandry and services supplementing one another that enhance productivity are also considered, only to mention the most important factors. In a market competition selecting on the basis of efficiency only those can survive who can cultivate with profit, drawing from various resources (production, services, compensation by the state). It is going to be even more complicated in the framework of the EU, in the face of units and farmers enjoying the advantages of organic development.

In Western Europe research into precision plant production has been in progress for years and it was started two years ago in Hungary, within the framework of the National Research and Development Programme, coordinated by the Research Institute for Soil Science and Agricultural Chemistry of the Hungarian Academy of Sciences. In the framework of this research great attention is paid to factors related to sustainability. It can be stated that precision cultivation in a broader sense opens up a new way for the realisation of sustainability. In fact this kind of cultivation means the performance of activities adjusted to the local conditions and needs inside the plot of land. An organic part of it is investment the extent of which is precisely regulated, and as such it favours the protection of natural resources right from the outset.


Possibilities of change

Smaller or major changes of the structure of production and activities and the modifications of its proportions carry in themselves the possibilities of sustainability that would, at the same time strengthen the local role and significance of agriculture.

– 1. The use of land, a modification of the branches of cultivation (plough land, garden, vineyard, orchard, grass, forest, fishpond, reeds), particularly on slopes or areas of weaker production capacity has been an older, mostly unrealised effort in Hungary which cannot be postponed any longer at the gates of the EU. The enlargement of gardening areas, particularly by the reduction of plough land, turfing, afforestation and planting of trees in general are desirable due to economic interests as well as for the protection of nature and of the environment.

– 2. In the plough lands the moderation of the excessive weight of cereals and corn may serve sustainable development. The growth of the area of cereals (wheat, barley, rye, oat, triticale) is explained by the lack of capital, by a simpler production and harvesting. The two jointly hinder rational crop rotation, which is a resource free of charge, sparing the environment, regenerating the soil and which can be counterbalanced only by a significant use of chemicals, otherwise would result in a fall of average yields. In addition to the production of industrial and cash crops, protein-containing and fibrous-juicy fodder plants the production of vegetables on plough land and the planting of orchards may help in reducing the excessive weight of cereals. In addition no quotas are set for vegetables in the EU, currently Hungary is already a ‘major power’ in some fruits (sour cherry, apricot, rolling raspberry).

– 3. The production of wood on plough lands is not utilised, though it is a relatively rapid possibility of adjusting to the market conditions, which would also mitigate difficulties in employment, it is of educational effect and shapes the landscape. Its spread can be solved out of self-interest, with possible assistance to begin it, or with the help of bridging credit. For this purpose, despite the opinion of some environmentalists, it is acacia that would suit drier areas, and poplar for more humid ones. Wood production on plough lands increases green areas while it reduces energy imports and costs and improves the situation of demand in the longer run. In an increasingly sharp agricultural competition weaker quality plough lands, and even meadows and pastures, and also slopes can be profitably utilised by the plantation of forests. In the EU wood production on plough lands would be welcomed by all means because it limits agricultural production and improves the conditions of the environment.
Today heating with wood is cheaper than gas by about 40% according to calculations, in addition it spares the environment because practically no sulphur is emitted to the air, which would, among others, destroy even green surfaces in the form of acid rain.

– 4. So far acacia has proved to be promising for the establishment of the so-called energy forests. Actually acacia is the hard wood of the highest yield, it burns well while humid, its heating quality is the highest of the fast growing trees (14.7 MJ/kilo), its cutting maturity is a third or a fourth of oak and beech, it utilises solar energy well, it sprouts and takes root well, it is melliferous, meaning that its yield of honey may reach as much as 50 kilos per hectare. It has few illnesses and insect pests. An acacia energy forest can be felled after 4-5 years, the wood is utilised in small power stations of mixed fuel and that too with 70 to 80% efficiency. In addition the energy forest reduces soil erosion, increases the nitrogen content of soils, enriches their organic and humidity content. (According to calculations 100 thousand hectares of energy forest annually produce the value of 300 thousand tons of fuel oil.)

– 5. Turfing and animal husbandry based on it may satisfy various demands: it spares the environment, it corresponds to the requirements of ‘humane’ animal husbandry, it suits the objectives of safe food, creating the basis to quality animal products, and it is also lucrative. It may be considered at the perimeter of such villages where the meadows and pastures of a lower location were ploughed and the slopes of hills were tilled.

– 6. Services for producers are almost totally missing from Hungarian agriculture. As a consequence of the transformed ownership relations accompanying the change of the political system and the new landowners struggling against the difficulties of starting off required mechanised work as a service right from the beginning, together with advisory services supplementing skills, activities of acquisition and sale, etc. Unfortunately all these services are missing to the present. Those local governments may get into a favourable situation where the establishment of servicing enterprises, possibly extending over several villages, is assisted.

– 7. The repeated renewal of the traditions of regional production that had been based on the local conditions of nature and habitat and on the accumulated knowledge, and their adjustment to the present requirements is one of the reserves of sustainable development. The production of hungarica, such as ground paprika, onions, horseradish, meat products, or the ‘invention’ of new ones (like the honeyed walnut of Milota, honeyed dried plums of Szatmár) is a moneymaking opportunity for villages. (And sustainable just because of its nature that is based on habitats and on a production that preserves the landscape.) It is important that the village or the enterprise may be able to supply its products continuously, that quality should be guaranteed; labelling and the certificate of origin should indicate its speciality.

– 8. Local traditions linked to the habitat and the region may serve sustainability by being sources enhancing income through various events that introduce the locality and promote sales; in addition they forge the community of the given village. The restoration and preservation of the value of landscape may play a role in it, and it is primarily linked to village tourism, but it also has a business aspect.


Pressing practical issues

An early replacement of power and other machines of work and its subsidy are very important in the interest of sustainability because the new machines are energy-saving, lighter, they exercise less pressure on the soil, their emission and noise are less, they do not pollute the environment by dripping oil and require less servicing. (Thus a cultivator may save as much as 40% of cost.)

Cultivation economizing with water, by itself constituting a whole, a subsystem, is closely related to machines and tilling the soil, includes a technology retaining precipitation, covering of soil, species, hybrids, crop rotation, the role of animal husbandry counterbalancing drought, irrigation, some elements of melioration, the processing of basic materials, and forming self-help organisations.

In sustainable cultivation production that is adjusted to the habitat also means that it is not the yields, the size of price income and cost, but it is the proportion of input (cost) and output (price income) that is in the focus of decisions. The aim is to accomplish the largest possible difference between the two!

Organic, bio and ecological cultivation and integrated cultivation also can be fitted well into the system of sustainable production. However, in the case of bio products it is first of all the local market that has to be taken into account as domestic demand has been growing slowly. Exporting is a relatively good opportunity if it is controlled by the producers.

The food-producing function of agriculture cannot be neglected either in the present or in the future. It is one, if not the only source of livelihood for agricultural enterprises, particularly in small villages and in regions with such settlements. The utilisation of smaller areas that would supplement income and reduce cost is significant particularly for pensioners, big families and the unemployed. Further on, the enterprises are also taxpayers, improving the living conditions and the infrastructure of the inhabitants of the settlement by their contribution and presence.


The aim of the National Agrarian Environmental Programme is to spread the production methods that spare the environment, protect nature and preserve the landscape. Its basic principle is sustainability and quality. All this is intended to be realised by subsidies that may be granted to applicants in the following topics: programmes for the protection of agrarian environment, of integrated cultivation, ecological cultivation, utilisation of turf, aquatic habitat, sensitive natural areas, programmes of training, advising and of demonstrative farms. Shifting to a system of sustainable cultivation can be facilitated by these subsidies. Subsidies that are available as part of SAPARD, that is the programme of the EU for catching up, can be utilised only in co-financing, but they offer such opportunities that coincide with the sustainable development of settlements and agrarian enterprises.