Hungarian land-grabbing: family farmers vs. politically backed oligarchs
Often thought of as a problem in developing nations, land-grabbing is a reality in contemporary Hungary. The problem of private hoarding of land began after the fall of Communism in 1990, but the current government is making the situation worse. Through a corrupt relationship between power and agri-business, more and more land is falling into the possession of a powerful few, with devastating consequences for society and the environment.
Foreign investors acquired at least 35 million hectares of land in 66 countries over the past few years according to GRAIN, a non-profit organisation based in Barcelona. So far, the phenomenon referred to as land-grabbing could be observed mostly in African and South American countries. The term usually refers to the acquisition of land by non-local actors who exploit it with the aim of generating agricultural profit without regard to the interests of the local community (in particular small farmers) or the environment. In this article I will focus on a variety of land-grabbing that is currently occurring in Central and Eastern European and has been largely overlooked by Western European media and pressure groups.
While Western Europe often protects family farms and strongly limits the maximum cultivable land size, the position of small producers struggling to make ends meet is becoming desperately vulnerable in the countries that used to belong to the socialist Eastern Block, where democratic institutions and political culture are developing all too slowly and citizens often stand powerless in the face of aggressive capital interests. In what follows I focus on one crucial aspect of the transformation in the agricultural sphere in the post-socialist period: the struggle for the control of cultivable land.
There are important similarities in the way giant estates (frequently exceeding several thousand hectares) were created in Hungary, Romania, Slovakia and Serbia. What is particular to Hungary is that the process I describe as land-grabbing is not driven by foreign investors, since the purchase of land by non-Hungarian citizens has been prohibited by a moratorium that does not expire until 2014. The phenomenon that has given rise to increasing social tensions in the Hungarian countryside is rather being driven by “national oligarchs” who have forged close ties with the country’s political elite over the last two decades. This narrow group has exploited these ties to acquire a significant part of the land fit for profitable exploitation as well as the European agricultural subsidies that accompany it.
“The land belongs to those who work it” – at least according to a political slogan that appeared throughout the course of 20th century Hungarian history. It is based on this idea that the agricultural population was granted land ownership several times over the last century. Despite this over the past 500 years Hungarian farm structure has always been characterised by an opposition between ‘dwarf’ and ‘giant’ estates. After the regime change of 1990 the large socialist cooperatives that had dominated the sector were dismantled, with the exception of a few. State-owned farms were broken up and offered for purchase or long-term land lease at a discount price. This procedure favoured actors who had access to capital. These were typically not those who were actually working the land but bankers and managers, who lived in the cities and used the land as an investment. The process therefore contributed to a decrease in the number of economic actors operating in the agricultural sector. More-and-more villages were deserted, the country’s food self-sufficiency was damaged, and the farming population is ageing because fewer and fewer people go into agriculture (given the shortage of capital and uncertain conditions in the food-market). The result of this process is what we call land concentration which in Hungary translates into the strengthening of duality (that is polarisation between ‘dwarfs’ and ‘giants’) in the agricultural sector – as revealed by the fact that the average size of so-called “large estates” in Hungary is one of the largest in Europe: about 3,200 hectares.
The latest corrupt chapter
This complex set of problems could have been at least partly mitigated through the leasing of land that remained in the possession of the state. Faithful to its election promises, the government elected in 2010 published a tender for land lease with the professed aim of strengthening family farms. The scheme would have entitled small-scale producers and family farms to lease land for 20 years at relatively low prices. Cheap long-term land lease could have slowed the abandonment of villages, regenerated local communities, while also curbing the expansion of large-scale monoculture-based agriculture. These goals, however, were not met in the end. The series of scandals that erupted right after the announcement of the results of the first round of tenders showed that, contrary to the government’s promises, its land lease project actually furthered the interests of certain Hungarian agro-businessmen: those who entertained good relations with the governing party received significant swaths of land for 20 years. The new land lease legislation is full of loopholes. Tender applications are kept secret, no justification is given for their rejection, big city dwellers are often preferred to local inhabitants and one can easily bypass land size limits provided they apply for an umpteenth piece of land in the name of a sibling or a spouse. Furthermore, candidates with applications that are much weaker from a professional point of view may nevertheless easily win because 40% of the scoring is awarded on the basis of subjective criteria. Practice has shown that legislation loopholes were quickly taken advantage of and land-grabbing is occurring at an accelerating pace.
Frustration and anger have by now replaced the positive expectations that were widespread among farmers after the change of government. It is no coincidence: many farmers feel that the ruling party (Fidesz) betrayed them. Campaign promises pledged that land priority would be given to local farming families and small and medium-sized farms in hope that this would create more jobs in small communities. The pledge was largely legitimised through the personality of professor and union activist József Ángyán who was nominated secretary of state responsible for agriculture. Confronted with the outcome of the first round of tenders and the immediate eruption of scandals he decided to resign in protest and speak out against the push of the “national oligarchs”.
This uncommon display of integrity and commitment also made an impact in the communities which had been disadvantaged by the agro-business lobby. This was the case in Kajászó, a Transdanubian village that has since become a symbol of the abuses related to the public land lease tenders. Local applicant family farmers received not a single inch of land from the pastures and arable fields surrounding their village. Instead, to the amazement of the local community, a single candidate from another village won all 428 acres of public land without having any farming experience at all. Community members turned to the relevant institutions to seek remedy, but their complaints – echoed by journalists and my own speeches in the Parliament – were simply ignored. In response, Kajászó’s farmers decided to organise themselves with the objective of ensuring local control of land and securing the rights of farmers in the new land law that is still in preparation. Their tactics were inspired by José Bové’s visit to Kajászó that was carried out as a joint project of the European and Hungarian Greens. In a symbolic land-seizing gesture the farmers ploughed a stretch of the land that has been leased – in their judgment, illegitimately – to the winner of the tender and symbolically placed the land under the authority of the local farmers’ council. Besides this, they encouraged other farmers in the country to establish local farmers’ councils of their own. In order to efficiently represent their interests they founded the grassroots Association of Farmers’ Councils, with the main objective of enabling small-scale producers to stand up for their own interests in an organised manner. The new farmers’ organisation intends to ensure that the government develops a new tender structure for public land lease with the participation of farmers so that “local producers” will really mean residents of the local community as opposed to people living as far as 20 kilometres away (possibly in another village or town). These demands were echoed in the amendments I proposed to the land law.
As a result of the land-grabbing I described above a significant part of agricultural land in Hungary is now concentrated in the hands of a small number of individuals and interest groups. The astonishingly high concentration characterising both access to land and agricultural subsidies has been publicised by the site www.farmsubsidy.org. A quick browse reveals that the three largest agricultural interest groups received an astonishing 10 billion HUF (app. €35 million) in subsidies in 2011. The website also shows that one of these (Boly Ltd., belonging to OTP Bank President and CEO Sándor Csányi) received the second largest direct agricultural subsidy in the EU since 2008: an amount of €15,549,278.
Large land proprietors employ only one-sixth of agricultural workers. While they extract approximately 500 billion HUF (€1,75 billion) annually from the agricultural sector, they only minimally engage in value-added commodity production and leave behind an excessive ecological footprint. Moreover, the half a dozen large landowners who (as the land lease tenders clearly show) control the country’s agriculture can more easily evade taxation, as revealed by the case of Mr. Csányi, who according to media reports channels significant portions of this income into Singapore, a well-known tax haven. It is because of these reasons that I see the current trends and structures as unsustainable from an environmental, economic and social point of view.
A growing resistance
At present it is difficult to respond with optimism to the question regarding the chances of an ecologically and socially sustainable agriculture in Hungary. Along with 141 environmental and conservation NGOs, farmers associations with pro-government affiliations have signed a position paper that urges, among other demands, acceptance of the amendments of PM (Dialogue for Hungary) and making the land law, presently favouring large estates, more sustainable. Though the debate on the new law is still under way the prospects are rather dim. The present proposal could only be safeguarded from the influence of oligarchs if the majority of the proposed amendments will be adopted – the chances of which are limited in light of parliamentary mathematics and the governing parties’ well-documented reticence to change their stance in response to grassroots concerns. Nonetheless, the Hungarian government has got itself into a situation where it will have to fight on two fronts. While small-scale producers will continue to push for the protection of their livelihoods, large land owners will criticise the government on the grounds that the land law under construction could ruin large estates (and that this will also hurt the government because agricultural exports will decline). While this collision of interests was unavoidable from the start the government could have avoided the current tensions (and retained its credibility) if it had used its two-thirds majority to draw up an implementable strategy rather than silently boycotting the reforms proposed by József Ángyán.
The fact that the farmers started to organise and that cracks are beginning to appear in the formerly monolithic block of the right-wing ruling parties are encouraging signs. As delegates of PM – Dialogue for Hungary, our job is to stand up for the interests of the family farmers and ecological principles. The battle can only be won if the support of the public is secured – for this, however, we need even those whose income is not dependent on agriculture to understand what the stakes are: the security of the food supply, the sustainability of the countryside, and thus the future of the whole country.