Some economic consequences of the accumulation and depletion of the soil nutrient content in crop production in Hungary

Abstract

In the 1990s a large proportion of Hungarian crop growers have based their production on utilising the nutrient content of the soil accumulated during the previous two decades. The characteristics of the recording and cost accounting system leave a gap between the real processes and the economic processes: the increase in the soil nutrient content which occurred in the 1980s was expressed in the records as a decrease in the financial resources of the enterprise concerned, while, due to the virtual incomes generated by the exhaustion of the nutrients accumulated in the soil, the loss of soil nutrients in the nineties is presented in the accounts as an increase in the net assets of the enterprise. The adjustment of the recording and accountancy system also seems advisable from the aspect of environmental policy, as the present system attaches undue disadvantage to the application of manure in comparison with chemical fertilisation, and does not allow the recording of nutrient balances, without which the excess nutrient application cannot be taxed. This paper describes the main principles of an adjustment package which overcomes all the above three weaknesses of the present system, while not requiring the introduction of either a new tax form or a fundamentally new recording system.