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Head of government's entourage eyeing agriculture

attilaj // 2017.10.29.

Címkék: english

The positions of the green barons obtained at the turn of the millennium are gradually, hectare by hectare, company by company, taken over by the orange barons in Hungarian agriculture according to the latest agricultural subsidy data processed by K-Monitor. In light of the payments and ownership rearrangements in 2016 there is still no sight of the promised rearrangement favouring small, family farms promised in the election campaign. However, what seems to be more and more obvious is that, similarly to the media, the banking sector or the construction industry, here too large landowners connected to the government party or to Viktor Orbán himself have appeared and are pushing their luck in the increasingly disparate world of Hungarian agriculture. The greatest buzz in 2016 could be noted in Viktor Orbán’s circle: village buddies, sports fans and relatives have flourished, while old hands fell back. If you want to learn about the landowners of specific settlements, see here.

 fsub.png

In the year 2016 a total of HUF 642,766,549,221 (~2,068 billion euros or the price of approximately 12,600 brand new John Deere tractors) of agricultural subsidy was distributed in Hungary. The majority of this comes from EU budget, even more so, because last year the Hungarian government’s contribution continued to decrease. In 2015, 78 percent while in last year 83 percent of agricultural subsidy came from the EU. In theory, the aim of the CommonAgricultural Policy is to increase competitiveness and give a chance to farming families in the countryside. Yet, this has been a severe and debated distribution issue from the very beginning. According to experts there is still room for seizing positions before the expected cuts in 2020, however, competitiveness needs to be invested into. The first graph shows the domestic inequality of distribution. Last year again it was the large landowners, the upper 10 percent, who raked in 75 percent of the subsidy, only 1 percent less than the year before.

Why did the single area payments scheme decrease?

 

Farmers are eligible for subsidy under various titles. In our earlier analyses single area payments scheme (SAPS) was the most accentual one, as this can be obtained based on the size of the land cultivated, thus providing a picture of how land ownership develops. To promote stock farming, a couple of years ago a restriction was introduced, namely that SAPS cannot be obtained for lands larger than app.1,230 hectares. Thus the total amount of SAPS fund was reduced to its half compared to previous years. As a result in 2016 HUF 31,476 could be obtained per hectare (as compared to the HUF 45,000 a year earlier). This provision could in theory counterweight the growth of large lands, however, such setback in growth is compensated for by the subsidy for greening, which is dependent on reducing environmental pressure, yet is obtainable based on the size of the land cultivated. The subsidy of HUF 17,559 per hectare has no land size limitations. The green component specifies various conditions for farmers amongst which are the diversification of plants grown, the maintenance of permanent grasses and ecological target areas, too.

 

Analysing the data, we have updated the company network of the biggest domestic agricultural oligarchs, and looked into the changes that took place in 2016. Amongst the eight biggest are the network of the two larger landowners of Felcsút whose name have previously only been mentioned, Lőrinc Mészáros and János Flier. The two village acquaintances of Viktor Orbán Prime Minister are interesting actors in our analysis, because as opposed to the other billionaires, they have managed to obtain more subsidy in total than in the previous year.
Emphasising the relationship with the Prime Minister is not only important because of the accidental village fellowship, since the Orbán family themselves are actively involved in agriculture. Orbán’s wife, Anikó Lévai has joint arable land with Flier (according to press news he manages the Orbans’ lands). Orbán’s sister–in-law, Gizella Lévai obtained a subsidy of HUF 76 million, it was her sons that were recently saved by Lőrinc Mészáros’ circle from an Apple Cider business that had gone awry. The many-sided Tiborcz family have received a subsidy of HUF 40 million from the agricultural funds.

Stories behind the numbers: agro-scams, privatisations, state subsidy...
[ News of agriculture in the K-Monitor database ]

Sándor Csányi: HUF 3 billion

17csanyi-en.png

The interests of Sándor Csányi lost a total of HUF 1.5 billion, about one-third of the subsidy they obtained last year. At the same time, the single area payments scheme together with the greening subsidy (HUF 1.1 billion) have somewhat surpassed the sum of the single area payments scheme of last year (HUF 1.02 billion). The majority of the setback can be noted in the mammoths of the company group (Bólyi and Dalmandi Zrt.), while the medium-sized companies (with a subsidy of HUF 50-100 million) were able to keep things up. A new development compared to last year is that KITE Zrt. producing a profit of HUF 4 billion has also passed into the hands of the banker oligarch.

Simicska-Nyerges: HUF 2.585 billion

17sim-nyer-en.png

Although at one time you could hear that following Simicska’s G-day Orbán broke up with Zsolt Nyerges too, the distancing has become visible in agriculture this year only. Next year’s company report will show whether Nyerges has parted with his share as well as his position. Despite the land privatisation that turned unfavourable for him, Simicska managed to maintain his eminent position, but compared to the other company groups, all the subsidy decreased most drastically for Simicska (to only 64 percent of the sum of last year). EU restriction is also markedly visible in the case of the mammoth company network. As a result of all the above, the sum of SAPS is merely 20 percent of that of the previous year. At the same time, Simicska quickly realised the opportunity: the ratio of moneys received for going green is amongst the highest in these companies.

Tamás Leisztinger: HUF 2.153 billion

17leisztinger-en.png

The majority of the company group, the four “- major Kft. (-homestead Ltd)” previously belonging to Leisztinger’s mother, as well as the Agárdi Farm have become the interests of János Flier, landowner in Felcsút. The total sum of subsidy for the remaining company network is less than half of the sum obtained last year (44.6 percent of it), the SAPS decreased by almost two-thirds (by 64 percent). With regard to the total sum of subsidy, Leisztinger was the other to lose a lot besides Lajos Simicska’s company group.

The Bódi family (Tedej): HUF 1.711 billion

17bodi-en2.png

There were no noteworthy changes last year in the company empire of the Bódi family managing the Hajdúnánás Tedej demesne. The amount of subsidy was reduced here too, but thanks to the partitioned nature of the network, less drastically: the total sum of subsidy dropped by 19, while the area-base subsidy by 32.4 percent.

Helmut Gsuk: HUF 1.608 billion

17gsd-en.png

The German Helmut Gsuk managed to get hold of a company from the dirty dozen companies privatized at the turn of the millennium thus gaining a foothold amongst the biggest Hungarian agro-barons. No significant changes took place in the joint venture of Gsuk and his Hungarian business partner, Árpád Dorogi (mayor of Zsira until 2014). Total SAPS decreased by 9 percent (of which area-based subsidy decreased by 22.7 percent).

Mádl-Agroprodukt: HUF 1.284 billion

17agroprodukt-en.png

The total subsidy obtained by Agroprodukt in Pápa decreased by 25.5 percent, SAPS by 81.7 percent, this latter was however compensated for by the go green subsidy.

Flier family: HUF 860 million

 17flier-en.png

In the two last positions of our top eight list are the interests of the two comets of Felcsút, the Flier family and Lőrinc Mészáros. The biggest winner of last year is János Flier, whose companies enriched their portfolio by acquiring five Leiszinger companies. The “-major (homestead)” companies mainly owning lands in Fejér county came to Flier through István Garancsi. The subsidy pocketed by the farmer was increased from HUF 142 million to HUF 860 million in 2015 (of which the formerly Leisztinger-owned companies brought 700 million).

Lőrinc Mészáros: HUF 525 million

17meszaros-en.png

The other large landowner of Felcsút, the Hungarian Zuckerberg is marching ahead with great strides in agriculture, too. He is the proud owner of five new companies, two of which were amongst the dirty dozen large state farms privatised during the first Fidesz government (1998-2002). Agrosystem Zrt. previously known as the Herceghalmi Experimental Farm spreads over several thousand hectares. It came into the Mészáros empire through the Talentis Group Zrt. who also own ECHO TV, while Hidasháti Mezőgazdasági Zrt. came through Búzakalász 66. In addition to the two large companies, at the turn of 2016/2017, Mészáros acquired Kunhalom Agrária Kft. and the Dereszla Kft. winery, too.

When calculating the total sum of subsidy Mészáros received, we have not included sums of acquisitions later than the beginning of 2016, however, it is quite possible that these sums have already ended up with Mészáros. For the time being, the chart below shows these in grey, so it is apparent that the Hungarian Zuckerberg can confidently arrive on the podium of the agro-oligarchs.

The changes in the distribution of agricultural subsidies show that the increasingly large players in the sector are companies belonging to the Prime Minister’s environment. In the case of agricultural subsidy closely related to land ownership and land tenancy however, the changes are happening much more slowly than in other sectors where by turning off the public procurement tap, the power relations can completely be overthrown within one or two years. However, here too, land auctions and tenders have given birth to the new national capitalists. And with the gradual position gaining of the orange barons regulative and subsidy changes may come, which are even more advantageous to this smaller circle. And when this happens, the old green barons’ numbers will be up. 

 

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Címkék: english

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