“Is there life after Fidesz?” asks LMP

February 19, 2016


Opposition left-wing party Politics Can Be Different (LMP) hosted an event Wednesday entitled “Life After Fidesz”. Event speakers included LMP parliamentarian Benedek R. Sallai, former Fidesz MP and agricultural undersecretary József Ángyán, and economist and former Századvég director of research Tamás Mellár. The event was moderated by LMP parliamentarian Erzsébet Schmuck.

Speakers discussed various perspectives of agricultural policy, but the main message came from József Ángyán. He called Fidesz’s agriculture policy “a complete scam” and is worried about the catastrophic effect it will have on Hungary’s countryside.

What made this event particularly interesting were the guests

Ángyán served as an undersecretary for the Ministry of Rural Development during the second Orbán government (2010-2014).  A highly regarded expert on agriculture policy and engineering, he resigned from the post in 2012 when he discovered that the lion’s share of state-owned arable land had been leased to agribusiness, Fidesz party cronies and oligarchs.  Ángyán protested the adoption of the 2012 law on agriculture by leaving the Fidesz’s parliamentary fraction and sitting as an independent in the national assembly for the duration of his four-year term.

Researching the results of state land tenders around the country, he found that the entire land lease system was rigged and oligarchs and Fidesz party supporters were being awarded huge tracts of state lands, as well as collecting an enormous amount of EU agricultural and rural development subsidies.

Dedicated to helping small- and medium-sized farmers, as well as young people starting out in farming, Ángyán led a tireless campaign to raise awareness of how the government had duped him and the electorate into believing that it agreed with his ideas about sustainable rural development.

Fidesz reacted to Ángyán’s refusal to abandon his principles by destroying virtually everything associated with Ángyán, including the Kishantos organic farm — a European pioneer and leader in sustainable agriculture — which it stripped of government lands.   A court later invalidated the government’s tender, but not before the new leaseholder had plowed under the crops and used herbicides and pesticides. Later, the government defunded the agricultural economics institute of Szent István University in Gödöllő where Ángyán taught, even though the agricultural expert was one year shy of retiring.

Since then, Ángyán has dedicated his time to compiling data concerning the government’s  sell-off of state-owned agricultural lands to Fidesz politicians and their relatives, friends and supporters.

The other speaker, Tamás Mellár, previously served as Századvég’s research director. Mellár became a household name in 2015 after giving an interview to Népszabadság in which he said, “I quit Századvég because it became apparent to me that the whole think-tank is merely a money-laundering factory.”

Századvég later sued Mellár for defamation, but lost.

Both Ángyán and Mellár are respected academics in Hungary, and both have achieved the academic level of MTA doktor (there are two levels of PhD’s in Hungary and the highest level that can be awarded comes from the Hungarian Academic of Sciences and is referred to as the MTA doktor).

In reality, very little time was actually devoted to life after Fidesz. The event was opened by LMP’s Benedek R. Sallai, who presented a run-down of Hungary’s economic and social problems.

Sallai, an agriculture specialist by trade, focused primarily on issues affecting the Hungarian countryside, notably the extreme levels of poverty, lack of employment opportunities, and how the acquisition of formerly state-owned lands by Hungarian oligarchs and Fidesz cronies has hurt locals.

“The further we go from the capital, the worse the situation becomes and the greater the decrease in average incomes … It is no coincidence that, according to Eurostat statistics, four regions in Hungary — Northern Hungary, the Northern Great Plains, the Southern Great Plains and Southern Transdanunbia — are among the poorest 11 of the European Union’s 230 regions,” Sallai said.

Sallai finished his presentation with a few PowerPoint slides which listed his own thoughts on how the land in question could once again become the property of state and used to serve the public good.

Mellár said the economy would be nowhere were it not for EU and outside support

When Tamás Mellár took the floor, he opened by debunking the myth that Hungary is doing great and the country’s economic figures are terrific.

“There is a very misleading picture that is painting about the Hungarian economy: GDP growth of close to 3 percent, 6.5 percent unemployment, active exports, and public debt as a proportion of GDP is decreasing. It looks like everything is fine and dandy. Yesterday, Minister of National Economy Mihály Varga even announced that Hungary would have a balanced budget next year. So it appears we are talking about a completely consolidated country. In reality we are talking about a very tense crisis situation,” Mellár said.

The economist went to explain that EU funds and foreign-owned businesses are pretty much the only thing keeping the Hungarian afloat.

“If we took these factors out of the equation, Hungary’s growth would be negative,” he said.

According to Mellár, the government spends HUF 300 billion on its controversial public employment scheme — representing 1 percent of GDP.

“If we spend 1 percent of GDP on public employment scheme workers – let there be no mistake, these workers bring no value with them – then the GDP will grow by 1 percent. But if we were to take the public employment scheme workers into consideration when calculating unemployment figures – because they are not employed on the market and they represent an expense – and if we also calculated for those working outside the country, then the unemployment rate would exceed 10 percent,” he said.

“If we subtracted EU subsidies and remittances from Hungarians working abroad from Hungary’s current account balance, then the situation would be much worse.”

According to Mellár, private investment in Hungary has plummeted. He said all growth is led primarily by outside funding and private capital has not been allowed to develop. Human capital had diminished and investments in health care and education had not taken place.

“All this means that Hungary’s growth potential in the coming period will be between 0 and 1 percent — in the best scenario. Unless the situation regarding outside funding changes, Hungary’s internal market will not be strong enough to sustain GDP growth of 2-3 percent,” Mellár said.

Ángyán talked about the myth of helping small farmers and called it a “great scam”

Ángyán then took the floor to discuss how Hungary’s policies on agriculture are killing the economy of the rural countryside and only serving the large land-owners and oligarchs.

The agriculture expert said János Lázár, now serving as Minister Overseeing the Office of the Prime Minister, lied when he said that the government would take support away from the large farms and give it to the smaller farmers.

“It is an obvious scam when Lázár says he will take away subsidies from the big farms,” Ángyán said.

According to Ángyán, the Hungarian government rejects the European practice of “redistribution” which allows for smaller farms to receive increased subsidies to help balance their disadvantage on the market stemming from their smaller size. Instead of employing this policy, he said, the government simply gives more funding to the larger farms through alternative subsidies.

According to Ángyán, the government has pursued an agriculture policy that has terribly distorted the market in favor of large farms.

“I agree that Hungarian farms should operate in conformity with the European model. This means they should be self-sustaining family businesses which are allowed to make their own sovereign decisions. I can share examples of this successful model being used around Europe. They are outstanding. Go to Bavaria or Austria and see for yourself what their countryside looks like and how their farmers live. Are they able to exist or not? This isn’t even a subject for debate! But how do they do it?”

Ángyán said small farms in Western Europe are able to exist because they form associations, or cooperatives, which facilitate cooperation on everything ranging from processing and procurement to sales, and in some cases, together with local communities, they even establish credit unions.

These cooperatives of small farms were able to retain the advantages of running smaller operations, while addressing their disadvantage on the market that stemmed from the small size of each individual farm.

“It’s no mistake that the government hasn’t passed a law on farming cooperatives in five years. They don’t even want to address the cooperatives. They address ‘integrators’. The integrator is a large private corporation that sits over these small farms and only through the integrator can the small farms conduct sales, procurement, etc., but the integrator is the center of profit. This is what Orbán forced into the Fundamental Law in 2012 with the so-called Land Affairs package modification to the constitution. This, just for your information, is what caused our final split,” Ángyán said.

He said that unlike the integrator, farming cooperatives and associations allow for the profits generated by the production of the smaller farms to flow back to the families that operate the farms.

“That is how a family can live off of 50 hectares of land. The current system requires someone to operate a farm of 300-500 hectares to just get by.”

Ángyán called for the immediate adoption of a farming cooperatives law.

On the distribution of agriculture subsidies, he said the government has implemented a system that discriminates against local farmers and favors only those with large farming operations. For example, the government has set the minimum threshold to receive subsidies so high that small farmers cannot even apply for subsidies, let alone receive them.

“[The government] says that it will not give subsidies to operations performing below a certain threshold and then it sets the threshold at a very high level. Why give support to the small farms anyway? This is exactly what it is about. They call these ‘viability standards’.

“This means that if someone is a cattle herder, they would have to keep 150 cows in order for the enterprise to be viable. That’s because the government does not provide support for the small businesses. They don’t even want a person like this to apply for subsidies…. [A herder] who needs HUF 2 million to upgrade his stables can’t even apply for these funds. This is why small- to medium-sized businesses are struggling so much, and not just in agriculture. The system is set up in a manner which only permits 8-10 percent of the agriculture sector’s participants to submit tenders — and that doesn’t mean they win, that only means they can submit tenders! This practice needs to be reviewed. If we are really serious about helping families, these viability standards need to be lowered.”

Ángyán went on to say there is a lot misinformation out there about the 500,000 hectares of state-owned agriculture lands that were slated for privatization. The remaining 100,000 hectares that will not go up for sale would continue to be leased very inexpensively by large Hungarian companies, such as the business interests of OTP bank chairman Sándor Csányi.

“[The government] is giving these lands to them for free and they will call these ‘model farms’. For example, Sándor Csányi’s business interests, such as Dalmand and Bóly…. will be the model farms. But for whom will that be a model farm?  And what kind of model is it?  The model farm gives the government a reason to give him that resource for free and to make him the integrator for all the smaller farms relegated to him. The small farms can only operate through him, as I pointed out earlier. He sucks the profit out of the countryside. I see his network of companies and how they avoid contributing toward the common good with their offshore companies.

“The government decree creating ‘model farms’ precisely defines those model farm requirements to fit the parameters of the Bonafarm goup. So much so, in fact, that the government enters into strategic agreements with them. This means that only those can be labelled model farms with whom the government signs a strategic partnership agreement. Currently, that means all of Csányi’s companies, from Pick to all the rest. If the big capital interests are chosen to receive the natural resources and the state support instead of the small family businesses operating as cooperatives, this will have catastrophic consequences,” Ángyán said.

“[Minister] Antal Rogán said in an interview … that the resources should go to whoever can utilize them most effectively. He’s referring to these big companies. This is what this is all about. The reason why they use the lands so effectively is because they receive all the support. Of course they will be more productive if they get all the money. I calculated that Csányi receives around HUF 240,000 (USD 872) per hectare in land subsidies plus development subsidies. Of course he will be operate more effectively!”

Mellár shared his thoughts on how to oust Fidesz

Members of the panel took turns fielding questions from the audience. One such question dealt with the issue of how to oust Fidesz and was answered by Mellár.

“I will answer the question regarding how to oust Fidesz. It’s very simple. If there are 5 million Hungarian voters, and of the 5 millions voters, 2,500,000 voters want to replace Fidesz, then it will be incredibly easy to defeat Fidesz. The following must be done. A completely new party must be created that has three goals. First, it must decide to take part and win in the next election; second, after winning the election it will restore democracy, democratic institutions, and checks and balances … ; third, it will have to create a two-turn electoral system in which all parties have a fair playing field,” Mellár said. “If a party like this was to run for election, all that is needed is for all opposition parties to say that they won’t run in the next election and instead support this new party because the only purpose of the new party is to gather the strength to oust the current government.”

Once establishing a new electoral law, this new party “would call for another election that would take place on more democratic grounds and allow parties to compete more fairly. This is a platform that is clearly understandable and very supportable.”

The economist said all that is needed is 100 trustworthy and reliable people to represent this party.

“I’m certain nothing will ever come of this idea but at least I’ve said how to do it. It’s very simple but I already hear the parties complaining about this idea. These parties will each run individually and the votes of 2,500,000 people will be lost on supporting them. The votes won’t be enough to garner enough support for either of the parties and the parties won’t be willing to work together. And then Fidesz will again win with 25 percent of the vote. But this is our little Hungarian story. I’ve told you what I think, so my conscience is clear.”