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Hungary Agricultural Organization
In a traditional centrally planned economy, state and
collective farms play the key role in agricultural
production;
small private-plot farming is tolerated but is expected to
"wither away." The state makes production and marketing
decisions
for the farms, and individual state-farm managers and
collectivefarm members have little input into decision making.
Hungary collectivized its agricultural sector in two
campaigns beginning in 1949 and ending in 1961. In the
first
campaign, the government coerced peasants to move to state
and
collective farms, enforced compulsory delivery quotas and
high
taxes, and set prices artificially low to gain control of
agriculture and use it to generate capital needed for
industrial
development
(see Rakosi's Rule
, ch. 1). Peasants reacted
by
slowing production and departing from the collective farms
in
great numbers, especially during the Revolution of 1956
(see Revolution of 1956
, ch. 1). The government changed its
tactics in
the second campaign, which began in the late 1950s. The
authorities relied more on persuasion than coercion and
eliminated compulsory deliveries, increased material
incentives,
furnished loans, offered tax breaks, and provided seed,
fertilizers, and farm equipment. By 1960 about 90 percent
of
Hungary's farmland was collectivized, and in 1961 nearly
94
percent of the agricultural earners worked in the
socialist
sector.
After the mid-1960s, the agricultural sector often
served as
a testing ground for reforms later introduced into the
overall
economic system. In the 1965-67 period, the government
eliminated
obligatory plan targets, allowed farms to plan production,
loosened restrictions on self-financing, and permitted
production
on private plots. After the NEM was introduced in 1968,
cooperative farms gained true autonomy. In the 1980s,
agricultural producers could buy inputs from a variety of
sources
and sell to purchasers of their choice.
Data as of September 1989
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