Agricultural investments and their financing during the economic crisis

Abstract

Special aid programs for the agrarian sector have been established to support EU candidate countries and to reduce the gap between them and older EU member states. In the meantime, investments are assisted by different EU Programs. Most of the investments span many business years and require countries to provide some of their own sources. During the economic crisis these investments were not stopped, since they had been implemented earlier. For fulfilling the „own sources” part of the investment, different types of supported credit can be used. The effects of the global economic crisis can be observed in figures for the 2009 business year in Hungary. Despite the crises, investments' net values increased, thanks to the Program named New Hungary Rural Development Programme. However, access to foreign sources was limited during the crises because of the straitened circumstances of the banking lending process. The rates were increased, making real own sources much more important. The results of the agricultural companies were far off those of previous periods as a result of lower market prices, changes in certain expenses, and the increased rates of foreign sources, but they were also affected by lower rates of production. The correlation of the following factors would be observed during the economic crises: the investments of the agrarian sectors, the source structures and the profitability, using the database of NAV and AKI. Keywords: agriculture, investment, finance