Is the fate of state owned land grounds for concern?

October 21, 2013

Land

In January of 2012 the author of Fidesz’s national countryside program, Godollo Szent Istvan university professor and Fidesz MP Jozsef Angyan, resigned as State Secretary for Agriculture.  Angyan claimed that efforts to assist small farmers, farming communities, and young people first starting out in farming had been systematically undermined by large landholders and powerful businessmen intent on getting their hands on as much state owned land as possible.  He cited the example of Felcsuti mayor and building contractor Lorinc Meszaros, who established an agricultural company in 2011 and started cultivating the grounds previously rented by Csakvari Mg. Zrt. many months before the tenders were first announced.  “A person only does this if they know what grounds they are going to get and that the public tender process is merely a formality” Angyan told Magyar Narancs last month.

In an interview given to Origo.hu Ministry of Agriculture and Countryside Development State Secretary Marton Bitay refutes accusations that the distribution of state lands has primarily benefited the big and the powerful at the expense of small farmers.

The Origo interview with State Secretary Marton Bitay:

There’s no reason to be surprised if relatives win tenders for the right to cultivate state land according to the state secretary at the Ministry of Agriculture responsible for the state ground program.   According to the politician even if cannot investigate every applicant he does order investigations in disputed cases, although in the case of (Felcsut mayor) Lorinc Meszaros he does not see any reason for this.  He promised the National Ground Fund would post a search program on its web-site that would improve transparency.  He claims he routinely requests that information be made available to the public.

The government’s ground program operated for three years without a responsible state secretary.  Why did is suddenly become necessary in summer to have one?

The government wanted an independent state secretariat worthy of the serious task that is unique in the history of Hungary.  For the first time the State is leasing 250 thousand hectares of ground through state tenders.  We are approaching the 3000th contract and will succeeded in increasing ten-fold the number of those cultivating state ground.  I don’t think it is necessary to keep these results quiet and in the background even if there are some disputed matters.

So the state secretariat is engaged in public relations?

The state secretariat undertakes many kinds of work. Our main task is to publicize the work taking place in the Ground and Farmer Program.  This is one of the most important aspects of the government’s agricultural program and we would like for it to be visible.

From your curriculum vitae it appears that previously you did not have much to do with this field.  You are a trained lawyer who worked for the Fidesz parliamentary faction, a former department director at the Ministry of Interior who in 2012 became the chief of staff to the minister responsible for countryside development.  Has it ever occurred to you that perhaps you were needed for this position because ground matters are exceptional?

My diploma is not that of an agricultural specialist but such a diploma is not required for state secretary work.  I don’t have to decide when or how the ground is to be used, but whether the state ground in the tender system goes to local farmers.   My habits strongly tie me to the countryside and the people living there.  I currently live in the countryside and commute to Budapest every day to work.  But despite this it can be said that I am from the outside.  However, from the point of view of my work this has advantages and disadvantages.

According to news that can be read on the ministry’s website it seems a significant amount of your time this year is spent delivering ground lease contracts.  Have you managed to get used to farming society?

I work 14 hours a day.  Unfortunately I can only spend a small part of my day delivering contracts. However, for that I have to do a lot to be accepted in farmers’ circles.

Have you already met (former state secretary) Jozsef Angyan or his followers?

I met many of them while chief of staff but previously I also met with the professor.  At that time they had not raised any objections, if you’re curious.

And what do you think of Jozsef Angyan’s activities?  Is he a disruptive tool in the service of foreign interests or simply mistaken?  Or do you think he could be right?

Considering professor Angyan well preceded me I don’t think it appropriate for me to judge his work.  I’m sure there are reasons for what he does.

He thinks what is currently happening is bad and has nothing whatsoever to do with the stated goals.  You obviously have a different opinion about this. Why did Angyan and his supporters come out against the very thing they had supported for a couple of years?

The decision to distance himself from the work in which he played a role and was, in fact, the flag bearer, was his own.  As for what the reason for this was, you would have to ask him.  I see from the statistics that more than 80 per cent of the winners are private individuals who won 75 per cent of the ground.  This disproves the claim that a web of companies stole agricultural ground.  It wouldn’t be life-like if every supposed oligarch from (Sandor) Csanyi to (Tamas Leisztinger to (Lajos) Simicsa had that many straw men.

Jozsef Angyan never maintained that most of the ground went directly to companies or that the largest oligarchs took all of it.  Rather, he claimed that among the winners it is easy to identify interest groups whose members generally belong to one company or another.  And these are the interest groups that often overreach themselves in contrast to local farmers not connected to them.

Everywhere local farmers win but some pretend not to know that according to the tender rules everyone within twenty kilometers qualifies as a local.  Of course it would be useful to clarify the term “overreach”.

Obviously, in many contested cases the winners are only local on paper.

I feel such criticism is disingenuous.  You don’t seriously think that I can personally inspect whether somebody actually lives somewhere or is simply registered there?  But it would be a problem if farmers didn’t win.  But nobody claims this is the case.

There are examples of Budapest resident winning.  Recently a university student won in Somogy county.

I suspected you would raise this example. But seriously:  a pair of siblings just starting out in agriculture won three pieces of ground.  Need Hungarian ground be afraid of them?

We’re talking about not one but two people.  In the Index.hu article in this case the winners were all relatives or partners in a company. Such relationships are not by accident.

It’s true they are not by accident in that we’re talking about locals whose family members also farm locally.  According to my investigation the parents and grandparents also farmed in that settlement.  But on the basis of this I cannot swear that among the winners isn’t a childhood friend with whom I stole a pear from the schoolyard.

Is the country really that small?

I’m only saying that it is misleading to draw final conclusions from such interconnections.

Your department likes to refer to there being many thousands of applications and but very few complaints.  When you read in the newspaper about a suspicious matter do you investigate?  Have you ever encountered anything you did not find to be in order?

For me one “matter” is too many.  But let’s look at the facts.  When the current government came to power 600 thousand hectares of state ground was being cultivated by 600 renters.  There weren’t any tenders which is why now there is huge over-demand and a lot of dissatisfied losers.  But we examine every allegation of error and abuse.

Has it ever happened that the examination revealed that something was not right and there was a consequence?

There were such cases.  For example I had to withdraw many tenders, but I can’t remember off the top of my head which ones they were.

Where is the threshold for ordering an investigation?  It recently came to light that the prime minister’s favorite mayor, Lorinc Meszaros also won lands not advertised.  The grounds of Lepseny were not offered to local farmers.  In the meantime they are being cultivated by Mezort, a company closed to (alleged Fidesz oligargh) Zsolt Nyerges.   What kind of judgment is rendered in such cases?

We will soon issue a tender for the Lepseny ground you mention.  If you ask me I don’t like the legal relationship whereby one authorizes another to cultivate one’s ground. But it is important to know that in most cases there is no other choice.  One obstacle to the distribution of state lands through public tender, for example, is that the state is not the only owner.  There is 19 thousand hectares of this alone.  In order to be able to advertise many smaller holdings it is often necessary to divide up large holdings.  It is necessary to ensure access to every plot, questions of neighbor and service rights arise, and with this comes a lot of land registration office work.  In this way 25 thousand hectares of ground entered the program this year that was previously cultivated by parties authorized to do so.  By the way authorizations are better to conclude with land users who will cultivate nearby.  This is the simply answer for why Lorinc Meszaros can cultivate lands on the basis of an authorization.

If someone cites a specific instance of suspected abuse the ministry strikes back with all kinds of statistics that, on the one hand, do not answer the specific question, and on the other hand cannot be verified because the National Land Fund (NFA) website only posts the results of thousands of tenders in separate pdf files.  There is no date base by settlement, winner, or holding size.  Why is the system so nontransparent?

Everything is available on the NFA and National Park website.  With sufficient energy anyone can know anything.  It’s possible that there are solutions that would make the information easier to access but that is a question of information and not politics.

What you say is true to the extent it is a question of transparency.

No, we satisfy our obligation by putting every data on the website.  Anyway I have initiated providing a function on the website that would enable one to see information summarized in such a way that one can see who handles what size holdings.

When do you expect this improvement to be ready?

I cannot say for the time being.  We are concentrating all of our energies on the Ground and Farmer program.

Let’s turn to those data that are not posted anywhere but which belong to public records.  Blikk recently won a first level court decision in the matter of an authorization contract stating that the NFA unlawfully withheld tender documentation.  Why is it necessary to sue NFA in order to obtain such data?

You have to ask those responsible for overseeing NFA and not the state secretariat.

But do you find this to be acceptable?

No.  I don’t agree that public information on public interests should not be released.

And can you do something to change this?

Yes.  I am in the habit of asking.  Sometimes they accede.  In the end Blikk received the information after the first level court decision, although that wasn’t the product of my efforts.

Why was it necessary to learn from a MSZP member of parliament that a mafia was trying to steal money in the Country Development Office?

Because (MSZP MP Zoltan) Gogos cannot control himself and whatever he hears he automatically stands in front of the microphone.

Was he wrong to do that?  It was clear that this is not a phantom scandal.

No it isn’t. It’s a very serious matter.  We have worked together with the authorities since February to frustrate those suspected.  They were exposed and taken away in chains.  Neither the State nor the farmers suffered any damages.

Apart from the fact that those arrested might be sentenced to prison will there be other consequences?  Isn’t the system vulnerable?

There are always criminals, and the system filters out these attempts, although certainly not perfectly.

How goes the struggle against pocket contracts?  How many have you defeated so far?

We have initiated a number of criminal proceedings, but success cannot be measured this way.  No government ever devoted HUF 4 billion to such a goal.  The State will exercise its right of first refusal or, in the case of environmentally protected areas, appropriation to secure these grounds.  Our greatest tool is the new law on land transactions which invalidates pocket contracts.

How is it possible to know whether a given plot is subject to a pocket contract?  If it is possible to know do they file a complaint?

The nature of pocket contracts is that nobody sees them.  There are tell-tale signs.

So it is not possible to know only to guess?

There are signs that various state organs can determine with great certainty.  But I don’t want to divulge them.

If the support of family farms is the goal then what justifies the high limit of 1200 hectares per person and 1800 per family provided for by the law? 

It is possible to argue a lot over what constitutes a small holding verses a large one.  We’ve been attacked for setting the cap too low as well as too high.  We decreased it from the previous 2500 hectare limit but at the same time tried to satisfy the legitimate requests of those raising animals and cultivating crops.

And what is the guarantee that there won’t be interests that exceed the limit through many companies?

Every ground user most pass through complicated official procedures.  Furthermore, here comes into play the order defined by the new ground law.  But if you are asking whether there is a law that cannot be circumvented then my answer is clearly that there will always be those who try, but those who want to play around with this law had better hold onto their shorts.

Referenced in this article:

“Nem lehet minden oligarchának ennyi strómanja”, Origo.hu, 18 October 2013.

“A maffia nem veszíthet”, Magyar Narancs, 26 Septemer 2013