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Abstract
Besides its natural potential, Hungarian agriculture's major current advantage is low land prices and rental fees. Economic theory suggests that as Hungarian economic performance approaches
the EU average, production costs will also become equal. Increasing land prices, generated by higher
rentals fees, will mean landowners continually remove more agricultural income and Hungary’s competitive
advantage will dwindle. Moreover, subsequent capital withdrawal will lead to weaker agricultural
investments. The aim of land policy is to assist the land use of those farmers who make
a living from agricultural production. To increase competitiveness one needs income security and
policy efficiency meshing land ownership with land use for those farms wishing to acquire more
land This is particularly true for full-time farmers and for farms that can become commercially viable.
Presently the land market is unstable. This instability, coupled with rigid legislative controls on a
rising desire for land acquisition, could lead to escalating land prices. A sudden surge in prices would
hurt hands-on farmers, and strengthen the bargaining power of those landowners who are not actually
engaged in farming.