Conscious Development of the Food Industry is Must

The food industry is the most important part of the agricultural sector, and it is important that this area should also receive greater support in the coming period, as the domestic food industry is the most important and secure market for domestic farmers. The number of food exporting companies needs to be increased, as well as the target markets – this was discussed at a roundtable in Tusványos, at the 32nd Bálványos Summer Free University and Student Camp, among other topics – reports Magyar Nemzet.

What are the main challenges facing the food industry in the Carpathian Basin? What support can the food industry expect in the new EU development policy period? These were some of the issues discussed at the roundtable organized by MBH Bank, between Márton Nobilis, Secretary of State for Food Industry and Trade Policy of the Ministry of Agriculture, Miklós Kerezsi, President of the Hodler Group, Gergely Giczi, Deputy Managing Director of the Agricultural Marketing Center, and Dávid Mezei, Head of the Agricultural Relations and Agricultural Subsidies Center of the Bank’s Agri-Food Business Unit.

The food industry is perhaps the most important part of the agricultural sector today, and it could mean the future,”

said Márton Nobilis, recalling that Hungary has a long tradition in the food industry,” and the coronavirus pandemic and the Russian-Ukrainian war have made it even clearer that we need to be self-sufficient, and this requires improvements, efficiency, and economies of scale. The government sees the food industry as a strategic partner, he added.

The roundtable participants agreed that

the food industry should also receive more support in the coming period, as it is the most important and secure market for domestic farmers.

A conscious development policy is needed, and MBH Bank’s Agri-Food Business offers its expertise and professional knowledge to support this. “We are thinking in terms of whole product lines,” noted the host of the program, Dávid Mezei.

As Nobilis pointed out,

750 billion forints (EUR 1.98 B) of funding will be available for the development of the food industry in the coming years, with tenders expected to start in the first quarter of 2024.

In this context, he underlined that regionally well thought-out developments are needed to promote the most efficient production, and increase the share of exports and processed products.

Regionality can be a crucial element in the development of the food industry, and with it, of agriculture,” he stressed. According to the state secretary, a change of perspective is needed, with efficient companies at the top of the product chains, which should also organize the agribusiness.

The region’s decision-makers must believe that if they can build strong players at the top of the value chains, they will be able to organize the entire value chain, down to small producers, he said, adding that it is also worth strengthening regional cooperation, because for example, soil conditions and other production conditions and consumer habits are similar, but there are strengths and breakthrough points that are present only in one or another country in the region. These strengths – such as a seaport or EU membership, a different interest rate environment – may offer opportunities for the region as a whole that are currently not fully exploited.

Courage is necessary to invest in neighboring countries –

emphasized Miklós Kerezsi, Hodler Group President. The group was founded two decades ago by professional investors, and is a significant player in the Central Eastern European and Western Balkan agrifood industry.

Nobilis and Giczi agreed that it is crucial for the food industry in Hungary and the Carpathian Basin to compete in the market for quality products, and that higher added value products are needed.

There are consumers, there is production capacity, enough to supply 20-25 million people. This means there is a pressure to export, for which Hungarian companies need to be prepared, and opportunities need to be mapped,” Giczi added. Markets need to be supplied with quantity and quality food. He pointed out that only 30-40 companies account for the largest part of food exports in Hungary, thus the number of exporting companies and the target markets should be increased. Indeed, 95 percent of food exports are destined for Europe and 85 percent for the European Union.

Some countries in the Middle East, Asia, and Africa are ideal destinations,

Giczy noted, adding that there was a general movement from West to East in global exports.

Bank financing will also play a particularly important role in the development of the food industry in the coming years, due to the additional funding of HUF 750 billion (EUR 1.98 B), Nobilis stressed.

In this context, Dávid Mezei said that MBH Bank, as a Hungarian-owned bank, is happy to finance developments that will strengthen the domestic food industry.

In order to increase efficiency and competitiveness, however, the expansion of knowledge will also play an extremely important role,” agreed the participants.

Featured image: Facebook/Gyermelyi