The main objective of the paper published in the latest issue of Studies in Agricultural Economics (see: Hegedüs Zsuzsanna - Kiss Judit.: The impact of ten years of European Union membership on Hungarian agricultural trade. In: Studies in Agricultural Economics Vol. 116, 2014. p. 87-94.) was to analyze the impact of European Union (EU) membership on Hungarian agricultural trade with the EU-27 in the period 2003-2013 based on the latest statistical data. This paper is among the first to cover the whole ten years period since EU accession and to analyze Hungary’s trade not only with the EU-15 but with all 27 Member States.
Hungary, together with nine other countries, joined the European Union (EU) in May 2004. Owing to its importance of agriculture in the economies of the newly acceded Member States and the fact that agriculture and rural development is still the biggest item of expenditure in the EU budget, agriculture was one of the most hotly debated and negotiated parts of the accession process. As a country with huge agro-potential and a high degree of export orientation, Hungary was looking forward to EU accession, especially in the field of trade in agricultural products.
Hungary’s exports to the EU-27 almost doubled between 2003 and 2013, however, the share of the EU-27 decreased in Hungary’s overall exports from 84.1 per cent to 75.7 per cent; that is, Hungary failed to fully utilize the market opportunities provided by EU accession and enlargement. Hungary’s trade balance with the EU-27 increased substantially, reaching around EUR 10 billion in 2010 and 2011, thus improving the country’s current account balance and balance of payments situation.
Hungarian agricultural trade with the EU-27 also did increase very dynamically. A more than three-fold growth in the value of exports implies that Hungary produced enough agricultural goods for exports and made use of the enlarging market opportunities. In contrast to the global trends, the share of agriculture in Hungarian GDP started to increase noticeably following the onset of the global economic and financial crisis: in 2010 3.5 per cent, in 2011 3.9 per cent, and in 2012 and in 2013 4.0 per cent of Hungarian GDP was generated by agriculture. Following a post EU accession deterioration, the balance of Hungary’s agricultural trade with the EU had improved to a record of EUR 2.7 billion by 2012.
In 2003 47 per cent of Hungary’s agricultural exports to the EU-15 consisted of raw materials, and this share increased to 56 per cent by 2010 after having reached 60 per cent in 2007. This might be explained by the decline of the food processing industry after EU accession. However, a good sign is that in 2012 and in 2013 the share of processed goods (animal products, vegetable oils, food products, drinks and tobacco) began to increase while that of the raw materials and crop products decreased. The leading role of meat in Hungarian exports has been taken over by cereals. The import structure has always been dominated by processed goods: agricultural raw materials accounted for 33 per cent of imports in 1999 and 27 per cent in 2010. The main agricultural export partners of Hungary are Germany, Romania, Austria, Italy and the Slovak Republic, covering almost 60% of Hungary's EU market for agricultural goods.
The share of the EU in Hungarian agricultural imports was already rather high (more than 83%) at the time of EU accession, but this had even increased by 2013, the EU having become the dominant supplier of agricultural products to Hungary with its 91.6 per cent share.
The sources of supply are rather concentrated: in 2013, 69 per cent of Hungarian agricultural imports from the EU-27 arrived from six countries (with a 20 per cent share of Germany).
The paper concluded that the agricultural orientation of Hungarian foreign trade and the export orientation of the agricultural sector have strengthened during these ten years. Hungarian agricultural trade with the EU-27 grew very dynamically, with expansion of exports being accompanied by increasing import penetration. Hungary’s agricultural trade balance improved significantly and grew without interruption: by 2012 it had reached a record of EUR 2.7 billion. Almost 40% of Hungarian agricultural trade with EU countries is conducted with the new member states, that is with the old CEFTA-countries.
Zsuzsanna Hegedüs - Judit Kiss