Comparison of typical Hungarian and German model dairy farms

Abstract

This study, one of the first fruits of the IFCN (International Farm Comparison Network), compares farm economics indicators for one typical dairy farm in Germany and one in Hungary, facilitated by the TIPI-CAL simulation model. The authors measured and assessed the competitiveness of these typical production sites for the period 1996 to 1999. Examination of the results obtained allows it to be ascertained that, according to the findings of the study performed, Hungarian farms enjoy a considerable advantage over private farms in Germany with respect to land and labour costs, but that these advantages lose their edge or may disappear completely in consequence of negative phenomena accompanying agricultural activity and economics. Although on international comparison purchase prices for raw milk in Hungary remain below those observed in the European Union, in contrast with the tendency observed until the mid-1990s substantial price rises are now emerging. Despite this, the dairy production sections of a number of agricultural enterprises are now existing merely in a state of vegetation, the primary grounds for maintaining these being the no endeavour towards maintenance of profitability. By comparing data for a German and a Hungarian dairy farm the authors attempt to shed light on reserves in dairy production in Hungary, the rational exploitation of which could result in a substantial improvement in production competitiveness in Hungary.