LESSONS LEARNED FROM THE IMPACTS OF THE GLOBAL FINANCIAL AND ECONOMIC CRISIS ON THE AGRO-FOOD SECTOR OF HUNGARY

Norbert Potori, Róbert Garay and József Popp

LESSONS LEARNED FROM THE IMPACTS OF THE GLOBAL FINANCIAL AND ECONOMIC CRISIS ON THE AGRO-FOOD SECTOR OF HUNGARY

Research Institute of Agricultural Economics, Budapest, Hungary

The research aimed to assess the impacts of the global financial and economic crisis on the agro-food sector of Hungary, and to propose policy measures in order to lessen its undesirable effects. Interviews were conducted with stakeholders in two major supply chains, wheat and pigmeat. Although agriculture and the processing industries in Hungary had been in a long recession due to the general macroeconomic, legal and social environment, the crisis impacted the agro-food sector to a lesser extent than some other sec-tors of the national economy in the 2008/09 crop year. However, most stakeholders were expecting the situation to worsen in 2009/10. Our recommendations for policy measures to mitigate the impacts of the crisis included, inter alia, the distinguishing be-tween agro-economic priorities and social policy issues; the targeting of investment subsidies at the professional enterprises; the ex-panding of credit guarantee funds and the supporting of credit insurance; the encouraging of use of risk management tools available on the market; the encouraging of horizontal and vertical integration along the agro-food supply chains, as well as consolidation, ra-tionalisation and specialisation within the processing industries; the supporting of innovation and marketing; the increasing of R+D spending; the developing of logistics; and the improving of the transparency of policy making and communication*.
Key words: Hungary, agro-food sector, financial and economic crisis
JEL classification: Q13

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