PRODUCER GROUPS AND ORGANIZATIONS IN THE AGRICULTURE OF HUNGARY Marton Bittsanszky Deputy Head of Department

Agricultural output in million of USD 2014 Agricultural production7 866,7 Plant production5 016,0 wheat862,6 barley195,3 corn1 352,0 oilseeds894,4 vegetables533,4 potatoes124,5 fruits280,5 grapes97,1 wine83,3 Live animals and animal products2 850,6 cattle168,8 pig759,1 sheep and goat57,6 poultry880,9 milk658,2 eggs189,9

Producer based organisations Producer groups Producer organisations Association of producer organisations Union of producer groups Interbranch organisation Agricultural Chamber Breeders Associations

General goals Organisation of production, Adjust production capacity and capability to market requirements; Establishment of common rules on production (eg. harvest and information on disposal) Concentration of supply, Common placing on the market of the products including preparations for sales, centralisation of sales and the supply of wholesalers;

General goals Increasing quality Decreasing production costs Stabilizing market prices Environmentally friendly production methods Development of enterpreneurial and marketing skills, Organisation of innovative processes

Tasks of producer organizations Ensuring that production is planned and adjusted to demand, particularly in terms of quality and quantity; Concentration of supply and the placing on the market of the products produced by its members, including through direct marketing; Optimising production costs and returns on investments in response to environmental and animal welfare standards, and stabilising producer prices; Carrying out research and developing initiatives on sustainable production methods, innovative practices, economic competitiveness and market developments; 6

Tasks of producer organizations Promoting, and providing technical assistance for, the use of environmentally sound cultivation practices and production techniques, and sound animal welfare practices and techniques; Promoting, and providing technical assistance for, the use of production standards, improving product quality and developing products with a protected designation of origin, with a protected geographical indication or covered by a national quality label; The management of by-products and of waste in particular to protect the quality of water, soil and landscape and preserving or encouraging biodiversity; 7

Tasks of producer organizations Contributing to a sustainable use of natural resources and to climate change mitigation; Developing initiatives in the area of promotion and marketing; Managing mutual funds Providing the necessary technical assistance for the use of the futures markets and of insurance schemes 8

General Provisions  15 member at least (only producers)  minimum turnover limit  the turnover arising from the sales of own product should be at least 50% of total turnover  compulsory elements of the Articles of Associations and Statutes (Funding documents)  support of production, procession, storage, sales, market access  one group – one product  provide managing, and technical cooperation, background assistance and service  non-profit conditions to the membership

Elements of the Articles of Associations and Statutes Obligations of members laid down in the statutes:  sales contract with the organisation  complies with the productions rules and environmental standards  the rules of the contributions  data provision requirements  one member for one product – only one organisation  the production must be sold through the organisation  duration of membership  rules of the sales to another PG  rules of the democratic managing  sanctions on non compliences

Flat rate aid to cover operational costs Financing of strategical program actions aimed at planning of production actions aimed at improving or maintaining product quality actions aimed at improving marketing, including promotion and communication activities research and experimental productions; training actions and actions aimed at promoting access to advisory services crisis prevention and management instruments environmental actions Innovation – groups of producers, researchers and advisors are supported to work out new technologies Common investments Public support

Producer Groups in Hungary In 2005: – 149 new producer group in 14 sector /crop production and livestock/ – Number of producer members: In 2014: – 187 organizations in 16 different product-groups – Number of producer members: – Number of employee: 948 – Total value of marketed production: 893 million USD 12

Producer organizations of fruit and vegetable sector in Hungary In 1999: – 1 organization – Area under fruit and vegetable production: 268 hectare – Number of producer members: 54 – Total value of marketed production: 9 million USD – The share in the value of gross production of fruit and vegetable sector: 0.17% In 2014: – 80 organizations – Area under fruit and vegetable production: 28,690 hectare – Number of producer members: – Total value of marketed production: 141 million USD – The share in the value of gross production of fruit and vegetable sector: 20% 13

Thank you for your kind attention

EVALUATION AND RECOMMENDATIONS FOR THE FUTURE WORKSHOP

Content and implementation of the workshop 16 Good overview on the Turkish organizational, administrative, legislative frame of farmers based organization system Excellent logistics and accommodation Previous and constant discussion between the focal points on the needs of each country and on the different goals, programs

Other recommendations 17 -At the very beginning a Key note speech with main figures of the relevant topic (sending datasheet to the participants prior to the workshop), in order to put in contest the situation of the different countries -Focusing more on methodology

Next steps 18 -Identifying concrete, more focused topics -Raising attractiveness of the organizations -Services offered by the organizations -Public support systems for the FBO, evaluation, monitoring and follow-up -

Examples or applicable models in Hungary 19 Taris – agricultural sales cooperative – Adapting the multi-level cooperation for the apple producers in Hungary

Key differences between farmers based organizations in Turkey and in Hungary 20 – Similarities Regulation background Daily operational model – Differences Producer based cooperatives build up according to single purpose approach Cooperatives are not limited geographically, functionally can improve without limits, no need of unions and other umbrella organizations

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