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Agriculture and development – a global analysis | CEED

Agriculture and development – a global analysis

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  • user warning: Table './web69_db1/cache_filter' is marked as crashed and should be repaired query: UPDATE cache_filter SET data = '<p>Borbála Sarbu-Simonyi</p>\n<p><b>AGRICULTURE AND DEVELOPMENT</b></p>\n<p>Agriculture and development – a global analysis</p>\n<p>On the dawn of the 21st century, about half of the Earth’s six billion inhabitants are living in poverty, on 2 dollars a day. Deep poverty is accompanied by chronic hunger as well as famines incurring in the wake of wars and natural catastrophes. </p>\n<p>Heads of governments and states gathered at the 1996 World Food Summit in Rome and decided to eradicate hunger from Earth. However, the means mobilised for this end were not sufficient neither in number, nor in efficiency, and at the 2001 summit the international community had to conclude that they failed achieving the devised targets. Although the proportion of those suffering of hunger has been reduced, the growing number of hu in /var/www/web69/web/includes/database.mysql.inc on line 172.
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Borbála Sarbu-Simonyi


Agriculture and development – a global analysis

On the dawn of the 21st century, about half of the Earth’s six billion inhabitants are living in poverty, on 2 dollars a day. Deep poverty is accompanied by chronic hunger as well as famines incurring in the wake of wars and natural catastrophes.

Heads of governments and states gathered at the 1996 World Food Summit in Rome and decided to eradicate hunger from Earth. However, the means mobilised for this end were not sufficient neither in number, nor in efficiency, and at the 2001 summit the international community had to conclude that they failed achieving the devised targets. Although the proportion of those suffering of hunger has been reduced, the growing number of human population means that in absolute terms there is an increasing number of hungry people.
The 2007-2008 food price crises brought the rise in the number of hungry people and also brought panic and riots. In view of this, we have to acknowledge that it is not sufficient to deal with the symptoms of acute hunger but we have to get to the root causes of the problem.
First of all, it is an important starting point to see that three quarters of the hungry are rural inhabitants, most of them being small farmers or agricultural workers. The rest of them are urban poor who have been pushed out of the countryside of developing countries, a group that was especially hard hit by the food price spikes of recent years.
It is also important to note when approaching this problem that this high number of constantly and hopelessly hungry people is not a historical heritage, but the result of a (by historical terms) fast and recent process which brought the impoverishment of hundreds of millions of peasants. What underlies this is the scientific and technological revolution that happened in agriculture in the 20th century. The result of that was that the difference in productivity between the least and most developed agricultural systems in the world grew from a 1:10 ratio between the two World Wars to 1: 2000 by the end of the 20th century.
The main characteristics of this revolution were a high degree of mechanization, the selection of high productivity strains, increasing use of artificial fertilisers, herbicides and pesticides, and the use of concentrated feed for animals.
At the beginning of this period the agriculture of developed countries received much more subsidies than today, which made it possible for producers to finance the costs of development and so maximise development and progress. However, since productivity rose at an exceptional rate, 90% of the agricultural population of these countries became redundant and the ‘surplus’ workforce was taken up by the growing industrial and service sectors. Since productivity in agriculture grew much faster than in other sectors, real agricultural prices fell by 50% or even by 75% in case of some produces in the second half of the 20th century.
A very concise contemporary criticism of the process was given by Ernst F. Schumacher in his basic ’Small is Beautiful’: ’The main danger to soil - so not only to agriculture but the whole of civilisation – comes from the fact that the city dwelling human decided that they will apply the principles of industry to agriculture’ . Since agriculture inherently works with living matter, the industrial logic which aims at including non-living matter to satisfy the requirements of standardisation and predictability is alien to it. The basic principles of the two spheres are fundamentally different and human civilisation needs a balance between the two. Making narrowly defined economic efficiency an aim in itself signals the upsetting of the values of modern society, which holds serious dangers for the future of humanity. But if we acknowledge that complex living systems like soil and the creatures that grow on it have a meta-economic value, we can change the approach to the economic activity connected to them as well. We have to allow ourselves the ’luxury’ of using soil and landscape according to the principles of beauty, health and endurance .
This process that worried Schumacher progressed under different circumstances but with similar results in the Western and the Eastern bloc. Western European countries accomplished the industrialisation of the agricultural sector according to the plans of Sicco Mansholt, creator of the EU’s Common Agricultural Policy .
Apart from some isolated exceptions, developing countries did not partake of this process. Their partial integration happened during the ’green revolution’ of the sixties, which, similarly to the western model, was characterised by large-scale mechanisation, increase in the use of chemicals and artificial fertilisers and, in some cases, irrigation as well as selection of highly productive rice, maize, wheat and soy strains. These developments enjoyed considerable political support in the particular countries in the form of, for example, price subsidies and favourable state credits. Most of the small producers, together with their families around 1 billion people, were intact of these processes and to our days still work manually, without artificial fertilisers or chemicals and hybrid plant breeds with stagnating productivity levels which are behind that of the developed world. The technological gap is well characterised by the fact that the 1,3 billion farmers of the world all together (3 billion people with their families, half the human population) only possess of 28 million tractors. This means that only 2% of farmers own any machinery. Grave inequalities exist in access to farmland as well, especially in former colonies where independence was not followed by land reform. In such countries, several thousand hectares holdings, and the poverty of millions of landless workers and smallholders exist side by side.
High productivity countries export their agricultural surplus at depressed prices to the world market. This affects 10-12% of world production, the rest is sold locally. The world market is thus the market of surplus and the price is always set by the cheapest producer, meaning New Zealand, Brazilian, Ukrainian exporters who produce on large areas, disposing of much capital, good equipment and cheap labour force. At this price, North-American and European farmers would not be able to make a profit, so these wealthy societies, due to various consumer, strategic and social concerns, subsidise their domestic agricultural production. However, in some developing countries, in South-East Asia for example, the increased productivity resulting from the green revolution is coupled by such low wages that rice is being exported while the population is starving because they cannot afford to buy it.
The continuous decreasing tendency of agricultural prices in developing countries causes small farmers’ income to fall below the viability threshold so they get poorer and poorer, starve to death or flee to urban slums. This is why the development idea that aims at increasing productivity in developing countries in the spirit of the green revolution through expensive technologies is mistaken: these would only increase the marginalisation of poor farmers, similarly to the policy approach that takes cheap food to developing countries’ slums.
The advancements in the agricultural markets in the second half of the last century, the creation of heavily concentrated, distorted markets brought the evolution of internationally operating multinational companies. These economic actors, converting their increasing economic power into political weight achieved that by the eighties the multilateral free trade negotiations were extended to include agricultural products. Why is free trade so important for these huge international corporations? Their interest is to maximise the potential benefits provided by their international presence. The revolutionary development of communication, information technology, transport and logistical organisation in recent decades enabled the few big corporations to access these increasingly capital-dependent new technologies, to organise their production and distribution systems on a global scale, towards lowest costs and highest profits.
This approach, called global optimisation, is facilitated substantially by liberalisation of international trade policies. A survey in the multinational retail sector showed that only 10% of the products purchased by these companies comes from the international markets, they buy the rest locally. They would like to raise this ratio to a third, which would mean a better exploitation of their opportunities.
The alter-globalist movement, similarly to the above thoughts of Schumacher, expects international decision makers, companies and institutions to pursue agricultural development which prioritises the interests of people and nature. In this framework the international development practice of the World Bank family is subject to continuous criticism. Along this line of thought, food sovereignty challenges the neoliberal development model from perspective of the people’s and local communities.
The concept of food sovereignty has become the central idea of international agricultural movements in the past decade. It was initiated by the international movement of small farmers, Via Campesina, but by now it has been adopted by several organisations and movements fighting neoliberal tendencies in agriculture.
The birth of the concept can be linked to social movements’ protest against the agricultural negotiations of the World Trade Organisation (WTO). The international establishment of institutions favouring free trade - including the WTO, the IMF and the World Bank - believe, according to the development paradigm known as the Washington consensus, that the most important instrument in the fight against poverty is economic growth which should be pursued by the liberalisation of trade. Those in favour of food sovereignty believe that this connection does not exist. They believe that the fight against poverty needs regulation which focuses on the needs of the local population and on environmental sustainability instead of liberalisation. As to food policies, they argue that an overwhelming proportion of the food produced in the world is produced by small farmers and it gets to consumers through local or national markets. Still, there is a widening process in which trade, hygienic and legal regulations of agriculture focus on international trade, marginalises small producers and destroy local food systems. Policy space in at the local level is crucial in order to achieve agricultural development in the best interest of the local community.
It has become obvious that developing countries cannot follow the same development path automatically as the wealthy societies of the North did. Nothing guarantees in their case that the labour freed from agricultural work will get well-paid jobs in the city based on free trade development, or that the growth of GDP will create jobs.
Food sovereignty does not refuse trade but points out the reality that free trade does not favour small producers. Instead of total liberalisation it advocates a regulated and careful opening of markets aimed at the development of local trade.
After a decade of neglect, the agricultural sector has found itself in the centre of attention of international development institutions again in the past years. Recurring famines have made it clear even to decision makers that the development of agriculture is key in fighting poverty and hunger. The experience of the green revolution of the sixties in the affected countries point out how much damage is caused by development that is carried out without involving the local community as equal partners and acknowledging the role of traditional knowledge.
Dr. Vandana Shiva responds to this process pointing out how the destruction of traditional agriculture is (in both developed and developing countries) related to the colonialist and patriarchal character of western thinking. The passivity attributed to women and nature ’denies the active character of life’. Development in the western sense ’sees all work that does not produce profit and capital as futile.’ The oppression of women, developing countries and nature is the result of the same male logic, according to Shiva.
The criticism of the green revolution articulated in developing countries and international social movements has not had substantive reception in the strategic thinking of international institutions. The only exception to that is the influential report of the IAASTD published in 2008. It is a result of an extensive process of research and consultation, involving UN organisations (FAO, UNDP, UNESCO, UNEP, WHO, World Bank) as well as governments, economic actors and NGOs. The focus of the survey was the following question: What role does agricultural knowledge, technology and science play in the ecologically and socially sustainable development of agriculture and where should emphasis be put for a secure future?
The central statement of the report is the inseparability of the different functions and roles of agriculture, that is, the multifunctional agricultural model; the increasing of productivity carried out by prioritising ecological and social concerns. To avoid the shortcomings of the green revolution, the report puts a great emphasis on agricultural development done by including local communities as equal partners and focusing on their particular needs. Firstly, this means the rehabilitation of traditional agricultural knowledge. Secondly, the need for the used and created knowledge and technology to stay in the property and under control of the local community.
Growth in efficiency in modern agriculture lead to a long-term decrease in consumer prices. But ‘there is no free lunch’: due to these developments, the rural landscape in Europe as we know and love it is disappearing. The agricultural and rural development policies of the past 50 years promoted the increasing use of external inputs in order to increase productivity. Although for most of the time Hungary was part of the Eastern Bloc, this process turned out to be very similar in Hungary.
Accordingly, in the past decades, the increasing use of pesticides, herbicides, feeds and tractors in agriculture is apparent. The average yearly use of artificial fertilisers per hectare in Hungary has risen from 2,2 kg at the end of the thirties to 244,7 kg by the eighties while the use of organic manure has fallen.
Natural habitats and their living fauna are also suffering damages, the elimination of hedges and forest strips led to the extinction of many species. But the genetic diversity of domesticated animals is also on the fall. Around 750 different breeds of domesticated animals have disappeared since the beginning of the 20th century in Europe and the remaining 770 are also threatened with the chance of extinction by 2010. About the situation in Hungary, we can also state that the local fruit and cereal varieties of the Carpathian Basin have a weak chance of remaining here for future generations . According to the FAO, 75% of the agricultural heritage of the Earth has been lost in the past century. The thinning of its genetic base makes agriculture vulnerable to pests and diseases and lessens the choice of consumers, thus creating a welfare loss.
Soil erosion is an increasing problem as well. The land used for autumn cereal production has tripled since 1960, mainly to the detriment of grasslands, grazing fields and spring cereals. Cereal production has had to stop on 30% of the world’s arable lands suitable for cereal because of erosion in the past 40 years. Soil erosion causes damage for the farmers and other groups of the population as well: the farmer suffers from the loss of productivity of the soil, the price they have to pay for fertilisers and other products because of this, while the rest of the population suffer from floods, traffic accidents and water pollution due to erosion.

Agriculture and development in Hungarian history

The issue of development concerning Hungarian agriculture has always been characterised by efforts to approximate Western patterns. Another important basic factor is that due to its advantageous conditions, Hungarian agriculture has long been integrated in the international trade of agrarian products, and the latifundium producing for export was already present in the framework of feudalism. But at the same time the masses of landless poor and minifundists were also present and this duality became dominant in the political dynamics of the country.
This controversy of the land ownership issue led to serious social tensions so that it has remained a dominant problem in Hungarian politics for hundreds of years. Recurring land reforms also reflect the efforts aiming to tackle this question each time there was a political change.
Attempts of land reform in the XIX. century were curbed by the latifundist aristocracy. The agrarian socialist movements of the turn of the century gave a warning signal that the excess labour which is stuck and impoverished in the countryside due to insufficient industrialisation provides dangerous grounds for revolutionary ideas. The acknowledgement of this led to the ‘Nagyatádi’-land reform (named after the agricultural minister responsible for its introduction) after the defeat of the Hungarian Commune in 1920. However, as it was the product of a conservative system, it did not change the unhealthy land ownership structure considerably.
The movement of “rural writers”, a group of intellectuals between the two world wars aiming to analyse the social problems related to the Great Depression, considered immediate and radical land reform a must on a social basis. Defenders of the latifundium forewarned the prospect of declining productivity: according to their reasoning, upsetting the production structure would have endangered supply security for export and domestic food consumption.
László Németh, a prominent of the rural writers still often quoted with reference his concept of Garden-Hungary, questioned the optimism of enlightenment about development. He acknowledged that the material side of life has improved but at the same time values have not, moreover, we are talking about a loss of values . In his work, the Middle Age is a recurring ideal where there was a unified view of the world, everyone knew their place which gave meaning and calling to their lives. The alienated individualism of capitalism destroyed this, thus the crisis of the 20th century is a religious-cultural crisis at the same time as the crisis of industrially mechanised capitalism.
The alternative of quality-centered agricultural production and a lifestyle evolving around it can provide an escape from this crisis, based on Hungary’s favourable natural conditions , as well as a land reform that would create agrarian settlements and cooperatives.
The idea of settlements were the central theme of the reformist movements of the time. Németh discusses the issue in many of his writings. He argues for the view that small holdings are more productive than latifundia, but he also agrees with Gyula Szekfű that this is not the main argument for settlements: ’the aim of economy is not to produce more, but to provide more people with shelter and food’ , so, he states, preceding Schumacher’s ideas, that the aim of settlements is to provide a livelihood for as many farmers as possible.
The new page that has been turned after World War II, gave ground to hope that a class of economically viable middle-sized family holdings, a sort of “farming-bourgeoisie” could be created.
This initiative was strangled by the communist turn in politics after 1948: a few years after the land reform carried out in the brief democratic interlude after WWII, the two waves of forced collectivisiation abolished the Hungarian peasantry as a historical group on one hand, and the chance of the apparition of an agricultural middle class on the other. The reason for this was that the collectivisation did not only eliminate the latifundium, but the layer of mid-sized farmers as well (owning around 100 hectares). People were discouraged from independent farming by the persecution of so the called “kulak”s , the obligatory produce submission, heavy tax burdens and other harassing measures. Reshaping land ownership was the main political instrument used for restructuring the social-economic system. Post-war reconstruction of the industry was financed by resources taken away from agriculture. Contrary to the proclaimed “worker-peasant alliance”, the situation of the rural population worsened progressively.
Due to the hasty organisation and brutal measures characterising the first wave of collectivisation, the country’s agricultural output decreased considerably and food supply problems and the sudden change in the political climate in the Eastern Bloc with the death of Stalin in 1953 put an end to this campaign.
After fall of the revolution in 1956, in the spirit of consolidating the communist regime, the new and final wave of collectivisation was executed between 1958-62, this time with a pragmatic approach. (Softer coercion, offering leading positions to opinion leading farmers, supportive economic and credit policies, increasing the importance of expertise in leadership). Another key element was the acknowledgement of the need for small scale family production. The division of labour slowly evolved between collectively owned large scale extensive cereal production and more labour intensive and precision needy ’domestic’ sectors: horticulture and animal farming.
Thus, Hungary was the only member of the communist bloc (with the exception of China), whose collectivised agrarian system was able to eliminate food shortage and also produce for export in the sixties and seventies. This is where the expressions ’Hungarian Model’ and ’agricultural miracle’ come from. A third of the foreign currency income of the country came from agriculture in these times and productivity was on the level of France and Canada.
The market-orientation of domestic farms gradually increased during the era, with the marketed share of their overall production reaching 70% by the eighties as opposed to only 30% initially. This increase in market-orientation of production was coupled by a concentration of production.
The green revolution has happened in Hungary too. The ’bread cereal question’, namely the country’s capacity for ensuring its own food supply had always been on the agenda, and was basically solved by importing the results of the green revolution, which resulted that the country became self sufficient in bread cereal by the mid-sixties. In practice, this it mean increasing use and production of artificial fertilisers and new production technologies. Obviously, the green revolution was not an official programme, because of the widespread notion that it is a campaign of big foundations like the Rockefeller Fund in order to spread the model of market economy and create markets for multinational agribusiness abroad.
We have to note, however, that the harmful ecological effects of the green revolution took effect in Hungary too. Concerning its effect on profitability, it is worth considering the graph on net and gross productivity growth, which shows that the cost of increased use of inputs significantly decreases the profit of the gain in productivity.(Graph 1.)

Graph. 1. Evolution of gross and net agricultural production and input cost of Hungarian agriculture, 1949=100%. Source: Fecske 1987, quoted by Ángyán (ed.) 2003, p. 47.)

Resulting from the collectivisation was the result that big masses abandoned their rural lifestyle and streamed to cities to work in the rapidly developing socialist industry, so that rural unemployment only became an issue again after the mechanisation of collective farms. The cooperative sector tried to handle this problem by developing sideline activities in the industrial and service sectors. Similarly to Chinese rural industrialisation, sidelines of cooperatives became the most dynamic sector of rural economy and by the early eighties they provided half of cooperatives’ income.
Advantageous foreign economic factors also helped the Hungarian Model thrive: in the seventies, Arab countries profiting from the oil price boom boosted demand for food on the world market and demand was also growing on the enclosed market of Eastern Bloc. However, the boom ended by the eighties, Hungarian products were losing competiveness and the agricultural sector was faced by challenges that the socialist structure could not handle.
Summarising the above we can conclude that the era of collectivised agriculture created a peculiar path of modernisation in Hungary, industrial management of labour, mechanisation, use of the results of the green revolution, the increase of gross agricultural production in the collectivised sector at the same time as dramatically reducing the agrarian population (’de-peasantation’ of the country). Although the small family farm survived, a layer of medium sized farms with market-proof knowledge and capital could not evolve. The key to the success of domestic farming sector was the uncalculated nature of family labour. The resulting self-exploiting lifestyle has largely contributed to the ongoing health crisis of the Hungarian countryside.

Present situation in Hungary

The land reform after the country’s political transition has been subject to criticism from many sides. This political momentum has been widely regarded as the latest historical chance for a Western style farmer-bourgeoisie to evolve, on the base of existing market-oriented domestic farms.
However, the fact that agricultural privatisation was subordinated to historical redemption led to the comeback of the structure dominated by micro-holdings from one side and industrial farms from the other. The process of reprivatisation fragmented the property of cooperatives, and around 1.3 million individuals received an average of 4,4 hectares, who were mostly totally detached from the countryside and did not have either capital or any intentions to return to agriculture. This process dismantled Hungary’s internationally competitive, up-to-date equipped large farms. This only resulted in creating totally non-transparent relations around privatisation and paved the way for land grabs by the elites.
A great number of jobs were lost in the agricultural sector and as a result of the existing micro-holdings a group of “forced farmers” evolved whose only survival option was agriculture. Thus the Hungarian class of small farmers is not a result of organic development but that of a fast and radical social change. Most of them are not oriented by the market, cannot and do not want to be suppliers of the multinational retail sector.
When the countries of the Eastern bloc were faced with economic problems in the eighties, they took out new loans following the advice and accepting the conditions (quick opening of the market, privatisation of state and cooperatives’ property, encouragement of settlement of foreign companies, budget cuts) of the World Bank and the IMF. The so encouraged appearance of multinationals after the transition reshaped the power balance in the food chain: like elsewhere in the world, food trade took the coordinating role in the food sector as a result of these processes. Food producers and agricultural producers had to put up with a much smaller share of the incomes produced in the food sector. This means that the situation of agricultural producers keeps worsening in relation to the trade actors. Small producers were especially hard hit by this change because of their weak bargaining position.
After the transition about 60% of the food industry moved to foreign owners .Foreign investments contributed to the concentration of food industry, which means that market leaders further increased their share. In the milk industry for example, the seven biggest companies had a net market share of 68% of the sales in 2002 compared to the 44 % four years earlier.
Food trade has even greater concentration. In the case of the retailing sector it meant the settling of multinationals (Metro, Auchan, Tesco, etc.) and also that – as a Hungarian curiosity – the purchasing collectives of small shops teamed up in association (eg. Co-op Hungary, CBA, Reál Hungária) and protected their market positions successfully. The share of the 10 greatest retail companies in Hungary reached 89 % market share in 2003 compared to 52% in 1997.
The country’s agriculture joined in the globalised system of market economy in a historically peculiar moment after the collapse of the Eastern bloc. As a result of the advancement of free trade and due to the effects of communication and transport technologies, the influence of the largest multinationals grew in the food sector. Its joining the EU happened in a moment when the EU was adjusting its agricultural subsidy system to the free trade negotiations while providing socially aimed, temporary income support for the farmers. The Hungarian agricultural sector arrived in the EU after 50 years of collectivisation with a class of small farmers unexperienced in management and the market economy, with a fragmented land ownership structure.
Due to this, by the new millennium, small farms were increasingly marginalised, a process also supported by the following:
- privatisation and market opening at a forced pace handed the processing sector swiftly over to multinationals: this affected small farmers worst through the depressing of prices and the reshaping of the general power balance;
- Hungary entered the market regulations of the EU at unequal conditions: less subsidies and smaller production quotas which, again, hit small farmers hardest;
- the rural development programmes which were offered as a compensation did not suit the specific rural problems of Central and Eastern Europe;
- the agrarian strategy of the Hungarian government apparent in the rural development programme prefers the support of larger farms, thought to be more competitive, and promotes mass production sectors which do not favour the survival of small farmers.
Possible ways out in terms of retailing are teaming up in cooperatives to stay in the mainstream or, for the more courageous, alternative ways like a producers’ market or direct sales. Special, quality products can thrive in these channels.
Similarly to mainstream development programmes aimed for Southern countries, development ideas based on the neoliberal development model can be found in Hungary’s rural development strategy as well. The rural development policy of the EU is under criticism for its basic concept. According to that the subsidy system of the CAP on the whole reflects a neoliberal approach. Thus the damage done to multifunctional, sustainable agriculture is not compensated by the tiny rural development funds.
However, even these sources can be used in many different ways, and the recent rural development programme of the Hungarian government is under severe criticism for the lack of development serving the interests of local communities. The standpoint of the Hungarian government is that rural development funds should be used to support internationally competitive farms, which would ensure the development of rural economy, instead of because they will lift populist measures.. ’Let us not build Potemkin-villages’ warned the creator of ÚMVP.
According to its critics, however, this approach channels EU funds to the powerful few, instead of addressing rural communities real problems, like lack of infrastructure. Also, weak employment creation capacity of large farms questions the argumentation about the tide lifting all boats.
More criticism points out that this development strategy finances sectors of mass productions which see a tense global competition with players of efficiency way beyond our means. The author’s examples include cereals from Texas and India, soy and maize from Mexico and Brazil, chicken from Brazil raised with no heating costs in polytunnels with low labour costs, and Chinese chicken and pork. He argues that low-energy and high labour input, high added value- production systems would improve more the income producing capabilities of rural economies.
In connection to the processes outlined above, the social consequences of the concentrating farming sector are dramatic. The depopulation of rural areas is a serious issue in the whole of Europe, with the only exceptions of the most densely populated countries like Holland and Belgium. The move of rural population to the cities is clearly connected to the lack of rural employment. Agriculture, which was the backbone of rural economies once, now no longer employs masses.
Already at the moment of the transition, unemployment in rural Hungary exceeded the national average,, and the gap has only been increasing since: the 35% difference in 1992 grew to almost 50% by 2002. In most settlements there is practically a social crisis, since ’a generation is growing up which has never seen their parents work, only queue up for social benefits’. László Laki emphasises that this permanently unemployed group is lacking the experiences and social skills necessary to successfully enter the world of employment. The impoverishment of rural areas is indicated by the fact that while only every seventh child in the capital is entitled to regular child care benefits, every second child living in small villages falls to the indigent category .
According to the calculations based on European practice, 10% of all Hungarian households are considered poor in terms of their income. The proportion of rural inhabitants within this is 47,2%. Almost two thirds of those falling to the category “very poor” live in rural settlements and 20-30% of them lack the slightest chance of catching up.
The processes above all contributed to the lack of public services in villages seen all over Europe. Schools, post offices, pharmacies and shops are more and more concentrated in regional centres so that a growing proportion of rural inhabitants have to travel to other settlements to access these basic services. The case with institutions of social services is similar, which worsens the situation of the poor. 50 village kindergartens were closed in 2003. The government pointed at growing labour costs as an excuse.
Life expectancy in Hungary is lower for both sexes living in the country than for those in the capital city: a boy born in a village is expected to live 66, 83 years while one born in Budapest can look forward to 69,83 years.
The situation of those in the country is also sadly peculiar from a demographic point of view: although women living in the country give birth to more children than those in the city, (1.49 children on average compared to 1.30 in the city), it is still not enough for the reproduction of the population. (That would necessitate at least 2.3 children on average). On top of that, the migration of youth from the villages leads to the aging of village population. The dismantling of the institutions serving the bringing up of children will further decrease the ratio of children in the villages and people’s willingness to have children.
Shortage of health professionals is a typical phenomena for rural districts, which provide the majority of regions without permanent staffing for the district nurse status. All these harmful tendencies damage the mental state of rural population as well, which brings along the rise of the most common indicators of deviance. According to the report of the medical conference in Felsőszentiván the decreasing life expectancy of the rural population is largely driven by excessive consumption of alcohol. Drug use is more widespread in Borsod-Abaúj-Zemplén county than in metropolitan Budapest.
Rudolf Andorka also points out that although the mental state of the whole Hungarian population suffered the stormy social changes of the transition, the mental state rural inhabitants is worse than the national average. Signs of depression, spread of deviant behaviour and people’s frustration with their situation all amount to a very sad picture.
The fall of small farmers from the agrarian sector and the impoverishment in the countryside are undeniable facts. The question is how the situation of masses of small farmers will change if they get pushed out of production completely. At the same time, although the agricultural strategy to be followed has been a point of intellectual debates since the change of the system, we still do not have an agricultural policy based on a national consensus that could unite Hungarian society in its favour.

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