overview
Formerly Communist Hungary began its transition to a market economy in 1990. Hungary is among the most successful reformers in Eastern Europe and is perhaps the best prepared for accession to the European Union (EU). Like its neighbors, Hungary suffered a severe recession between 1991 and 1994, as producer subsidies were removed and input and food prices rose to world market levels. But Hungary resumed positive GDP growth in 1995, and growth now averages 3 to 4 percent per year. Among the East European countries, Hungary has been most open to foreign investment, an important contributing factor to its success. To a certain extent, however, Hungary succeeded economically because of heavy intervention in its grain and livestock markets, which has led to trade disputes with the United States and the World Trade Organization (WTO).

ERS analyzes Hungarian commodity production and trade, price and trade policies, and progress toward EU accession.

contents

• Basic information
• Trade
• Policy
• Outlook
• Issues and analysis
• Key data

feature
Hungary's accession to the European Union. At the EU Summit in Copenhagen on December 13, 2002, all negotiations for accession were completed, and the EU issued a formal invitation to Hungary and nine other countries to join the EU in May 2004. The final compromise will bring significantly greater benefits to Hungary's farmers than the EU originally proposed.

recommended readings
International Evidence on Food Consumption Patterns. Analysis of major consumption expenditures across 114 countries indicates that poorer countries are more responsive to price and income changes and also allocate larger shares of their total budget to necessities such as food.

EU Enlargement: The End Game Begins. Accession to the EU could bring significant changes in Central and East European production and trade. Impacts on world trade are likely to be small, but enlargement could alter U.S. exports to the region.

Livestock Sectors in the Economies of Eastern Europe and the Former Soviet Union: Transition from Plan to Market and the Road Ahead. Hungary, along with Poland, has emerged as one of the more successful reformers in the region. The report identifies factors contributing to Hungary's relative success in this sphere, but also points out institutional bottlenecks that continue to prevent Hungary's livestock sector from reaching its potential. Model results point to potential trade and investment opportunities, but the report emphasizes that this potential depends on the successful implementation of institutional and policy reforms.

See all recommended readings . . .

recommended data products
Production, Supply, and Distribution (PS&D) contains official USDA data on production, supply, and distribution of agricultural commodities for the United States and major importing and exporting countries. The database provides projections for the coming year and historical data for more than 200 countries and major crop, livestock, fishery, and forest products.

Foreign Agricultural Trade of the United States (FATUS) provides U.S. agricultural exports and imports, volume and value, by country, by commodity, and by calendar year, fiscal year, and month, for varying periods, such as 1935 to the present or 1989 to the present. Updated monthly or annually.

WTO Agricultural Trade Policy Commitments Database contains data on implementation of trade policy commitments by WTO member countries. Data on domestic support, export subsidies, and tariffs are organized for comparison across countries. This queriable database offers various options for viewing and downloading data.

Agricultural Market Access Database (AMAD) is a publicly available information tool for analyzing WTO market access issues in agriculture. It contains data and information for WTO member countries, including tariff schedules, tariff bindings, applied tariff rates, country notifications to the WTO, import quantities, and other data useful in tariff analysis.

See key data chapter...

recent research developments
The Europe, Africa, and Middle East Branch has an active program of research concerning the implications of European Union (EU) enlargement for Hungarian agriculture, agricultural production and trade in the enlarged EU, and U.S. agricultural trade with a larger EU. Hungary is among the five frontrunners for EU accession, but as many as eight East European countries could join the EU by 2004. Hungary is one of the leading agricultural exporters among the candidate countries, and accession to the EU could bring significant increases in grain and meat surpluses both in Hungary and the enlarged EU. Enlargement could reshape European agriculture in even more profound ways. Preparations for accession are already leading to consolidation and concentration of Hungary's agriculture and food industry. Enlargement will also bring strong pressures for significant reforms in the EU's Common Agricultural Policy. See the issues page for further discussion. Contact Nancy Cochrane.

related briefing rooms
Poland
European Union
Russia
Agricultural baseline projections

related links
USDA Foreign Agriculture Service (FAS) home page contains reports produced by the Agricultural Attache in Vienna.

U.S. Department of Commerce, Central and Eastern Europe Business Information Center provides background information on Hungary and other CEE countries targeted to U.S. companies interested in trade and investment in the region.

EU Commission, Agriculture Directorate (DG-VI) offers news on the latest developments in EU accession negotiations and periodic reports on the progress made by individual countries in fulfilling the requirements for EU membership.

See all related links...

for more information, contact: Nancy Cochrane
web administration: webadmin@ers.usda.gov
page updated: October 17 , 2003