Hungary: Land Fregmentation and Land Consolidation in The

WORKING DRAFT, NOT FOR DISTRIBUTION LAND FRAGMENTATION AND LAND CONSOLIDATION IN THE AGRICULTURAL SECTOR A CASE STUDY FROM HUNGARY TO BE PRESENTED AT THE INTERNATIONAL SYMPOSIUM ON "LAND FRAGMENTATION AND LAND CONSOLIDATION IN CEEC: A GATE TOWARDS SUSTAINABLE RURAL DEVELOPMENT IN THE NEW MILLENIUM" ORGANIZED BY FAO, GTZ, FIG, ARGE LANDENTWICKLUNG AND TECHNISCHE UNIVERSITÄT MÜNCHEN MUNICH, 25-28 FEBRUARY 2002 Prepared by: Szabolcs Biró - AKII, Budapest, Hungary Gábor Remetey-Fülöpp - Department of Lands and Mapping, MARD, Budapest Endre Tanka - AKII, Budapest, Hungary Erzsébet Tóth - AKII, Budapest, Hungary Gyula Varga - AKII, Budapest, Hungary Food and Agricultural Organization of the United Nations 2002 WORKING DRAFT, NOT FOR DISTRIBUTION THE STATE OF AGRICULTURAL LAND OWNERSHIP, LAND TENURE AND INITIATIVES FOR LAND CONSOLIDATION IN HUNGARY. ......................................................................................................3 1 INTRODUCTION: THE INITIAL CONDITIONS...................................................................................3 2 LAND REFORM: AN ANALYSIS OF THE CURRENT LEGAL SITUATION...................................7 2.1 AN ANALYSIS OF THE LEGAL FRAMEWORK ..............................................................................................7 2.2 LAND TENURE SECURITY AND PROPERTY RIGHTS.....................................................................................8 2.3 AN ASSESSMENT OF LEGISLATION RELATED TO LAND HOLDING STRUCTURE .........................................10 2.4 AN OVERVIEW OF PROPOSED LEGISLATION AND PROCEDURES FOR LAND CONSOLIDATION....................11 2.5 THE LEGAL REQUIREMENTS FOR LAND CONSOLIDATION ........................................................................15 2.6 AN ASSESSMENT OF INFORMAL CONSOLIDATION ARRANGEMENTS ........................................................16 3 LAND ADMINISTRATION IN HUNGARY ...........................................................................................17 3.1 INSTITUTIONAL SUPPORT FOR THE IMPLEMENTATION OF LAND TENURE POLICY ....................................17 3.2 STRUCTURE OF THE LAND ADMINISTRATION.........................................................................................19 3.3 CAPACITY BUILDING FOR LAND ADMINISTRATION ................................................................................21 3.4 LAND ADMINISTRATION AND THE LAND TENURE POLICY ......................................................................22 3.5 NEW REGULATIONS AND OUTLOOK OF LAND CONSOLIDATION ADMINISTRATION ..................................27 3.6 EU REGULATIONS ..................................................................................................................................27 3.7 INTERNATIONAL RELATIONS AS A FACILITATING TOOL.........................................................................28 4 DOMINANT CHARACTERISTICS OF CONTEMPORARY HUNGARIAN AGRICULTURE .....30 4.1 AGRARIAN STRUCTURE .........................................................................................................................30 4.2 RECENT STATISTICS ON FARM STRUCTURE.............................................................................................33 4.3 THE LAND MARKET IN HUNGARY...........................................................................................................34 4.4 INDICATORS OF SOCIAL AND ECONOMIC ACTIVITY................................................................................35 4.5 EDUCATION ...........................................................................................................................................35 4.6 AGRICULTURAL INCOME........................................................................................................................36 4.7 EMPLOYMENT ........................................................................................................................................37 4.7.1 Recent Rates of Unemployment.....................................................................................................40 4.8 CONCLUSIONS........................................................................................................................................42 5 A SOCIO-ECONOMIC SURVEY OF LAND TENURE AND THE POTENTIAL FOR LC.............43 5.1 A DESCRIPTION OF THE SURVEY AREA ...................................................................................................43 5.1.1 Harta .............................................................................................................................................43 5.1.2 Szakmár.........................................................................................................................................44 5.2 AN OVERVIEW OF THE SURVEY RESULTS................................................................................................46 5.3 A SOCIOLOGICAL ANALYSIS...................................................................................................................47 5.3.1 An assessment of state policy regarding rural livelihoods............................................................47 5.3.2 An analysis of household income structure...................................................................................49 5.4 A CONCLUSIVE SUMMARY .....................................................................................................................53 6 SUMMARY AND CONCLUSIONS..........................................................................................................55 BIBLIOGRAPHY:..............................................................................................................................................59 7 ANNEXES ...................................................................................................................................................61 7.1 ANNEX 1: ACRONYMS AND ABBREVIATIONS.........................................................................................61 7.2 ANNEX 2: PRESENT LEGAL ENVIRONMENT ............................................................................................62 7.3 ANNEX 3: QUESTIONNAIRE FOR THE INHABITANTS OF HARTA AND SZAKMAR VILLAGES .....................64 7.4 ANNEX 4: ACCOMPANYING STATISTICS .................................................................................................67 2 WORKING DRAFT, NOT FOR DISTRIBUTION The State of Agricultural Land Ownership, Land Tenure and Initiatives for 1 Land Consolidation in Hungary The aim of this study is to identify the economic and social consequences that follow a transformation process in agriculture and the effects it has on rural residential society. We focused our research on how the liberalisation of the previous, limited private ownership of arable lands as well as the methods of their privatisation, affected prudent land utilisation and the trends in residential incomes arising from agriculture. We also analysed the consequences of the current extreme subdivision (or fragmentation) of ownership, the ways of handling this situation, and the methods used to aid prudent land consolidation. 1 Introduction: The Initial Conditions By international standards, Hungarian agriculture has huge potential in terms of soil quality, climatic conditions and terrain. Seventy percent of the country’s total area of 9.3 million ha, (93 thousand km²) is suited to crop production. The ratio of agricultural area including arable-land, garden, vineyard, orchard, and grassland, to total land area is similar to Denmark, and is very high compared to other European countries. In Hungary, the ratio of agricultural land supply per hundred people exceeds the European average of 45 ha by 35 percent. Regarding arable land per agricultural employee, Hungary is only preceded by Denmark, Sweden and France. Due to these favourable conditions in agriculture, land ownership and farming structure have always been important and politically charged issues in Hungary. This is illustrated by a history of three contradictory land reforms in the past half-century, their only common feature being the underlying political motivation at the expense of economic efficiency. These land reforms created huge problems for a rural population dependent on agriculture, and it is generally agreed that agriculture and land ownership have failed to develop functionally in the past decades. As a result of the first land reform of 1945-1948, agrarian structure became characterised by a dual structure of many small-scale farms, co-existing with a few relatively large state farms, which covered 15 per cent of the arable land. After 1948, under a more severe socialist regime, individual farmers were forced to establish cooperative farms. This process – a second large-scale land reform -- was completed by 1962, with 90 percent of total arable land being covered by large-scale farms. From then on, the size of the large-scale farms was gradually increased due to continued mergers. Small-scale farms however were not fully eliminated, and during the communist period they provided about 35 percent of total production, mainly in livestock, and horticulture. Under communism, the small-scale farms worked mostly in conjunction and co-operation with the large-scale farms. Since the 1960’s 1 This study is the final summary of research carried out in Hungary and specifically in Harta and Szakmár villages in the first six months of 2000 by the Research and Information Institute for Agricultural Economics commissioned

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