Hungary: Orbán’s land war with EU

Somewhere in the Hungarian countryside
Somewhere in the Hungarian countryside
30 October 2012 – Le Monde (Paris)

Currently reserved for Hungarians, farmlands will be available for purchase by foreigners from 2014. But as this EU imposed deadline looms, PM Viktor Orbán government is doing all it can to delay it. Meanwhile small farmers are battling with wealthy candidates, often close to sources of political power, for the most attractive lots.

With its brand new white gate, the spread looks like it belongs to TV's mythical Ewing clan. Only the doorbell, manufactured in Florence, reveals that this former hunting lodge in south-western Hungary, previously owned by the Counts of Széchenyi, is now the property of Carlo Benetton, a scion of the Italian textile dynasty. The owner of vast estates in Argentina, here, Benetton exploits 7,000 hectares of corn, wheat and poplar trees.

"Folks call the castle 'Dallas'," says, with a grin, Harri Fitos, a civil servant in the adjoining village of Görgeteg, located south of Lake Balaton. As for the village of 1,200 residents, hemmed in by fences to protect the Benetton fields from game, some have nick-named it “Alcatraz”, after the former US prison. The unemployment rate here is 50%, with little hope of finding a job – except for working security on the estate.

Hungary has no petrol. But it does have arable land – over 5 million hectares – to whet the appetite. Especially since the moratorium on purchases of land by foreigners, in effect since 1994 and extended after Hungary joined the European Union in 2004, is scheduled to lapse at the end of May 2014. At least, that is the forecast in Brussels.

The race is on to ensure that this source of wealth will remain, as much as possible, in Hungarian hands. A new agrarian law, passed in July at the initiative of the conservative government of PM Viktor Orbán, bans foreigners from acquiring agrarian lands in the future and nullifies any sweetheart contracts already made, under the table, in anticipation of the opening up of the market.

"All the experts say that Hungary has a high potential," notes Peter Roszik, president of the Györ-Moson-Sopron chamber of commerce, a region in north-western Hungary near the Austrian border. "We are land-starved. There are six to eight times more candidates than available lots," he says.

58% of MPs in Budapest own farmland

There is no longer much to distribute, apart from the half million of arable hectares owned by the public sector which the ruling Fidesz party promised, during the 2010 legislative election campaign, to set aside in priority for family farms. Today, the tension is rising between small Hungarian farm-holders, short on credit, and the “oligarchs”, often close to Viktor Orban, who profited from the recent land attributions (some 100,000 hectares) leased to them by the State, at low rates, over a twenty year period.

They are literally worth the price of gold, however, because in Hungarian notarised deeds, land is always valued in the golden crowns of the Empress Maria-Theresa. State Secretary for Agriculture, Jozsef Angyan, the champion of small farmers, resigned with a bang in late January to protest against this favouritism. Jozsef Angyan, who is still a conservative member of parliament, has since never ceased publishing figures showing that “green barons” or “orange” ones – Fidesz's colours – are reaping the lion's share.

Agriculture is an excellent business proposition thanks to European subsidies of about 200 euros per hectare and to a tax holiday of at least five years on the profits of the exploitations. The clever ones can pull up to 75 million forints [nearly 264,000 euros] per year from 1,000 hectares.

If foreigners could invest as they wished, the price of land would rise but their profitability would fall. That is "the mundane truth hidden behind this nationalist zealotry," Peter Hilpold, an Austrian legal expert, told Austrian daily Die Presse.

The Hungarian media stresses that 58% of the MPs in Budapest are farmland owners, most of them renting out to tenants. The attraction of land speculation is such that Hungary risks becoming a 'banana republic', warns Jozsef Angyan, with barbed wire and armed guards to contain rampant criminality. A sign that the climate is deteriorating can be seen in the recent spate of spot occupations of farm lands.

Budapest plays the xenophobia card

"It's already Latin America, here," adds Ander Balazs of Görgeteg where he is the county representative of the far-right nationalist party Jobbik, the country's third largest parliamentary force. Ander Balazs was among a group of muscular activists whose goal was to dismantle the front gate of one of Carlo Benetton's properties.

But why target Benetton who bought his properties legally at the beginning of the 1990s, before renting those of the former communist cooperative? "Because they are Italians and not Hungarians," responds Enikö Hegedüs, a Jobbik MP providing re-enforcements that day in Görgeteg. The authorities in Budapest have themselves played the xenophobia card by announcing the nullification of suspicious contracts.

"Some of these contracts were registered by a notary or a solicitor. But there is no date, until the end of the moratorium," current State Secretary for Agriculture, Gyula Budai told Le Monde. Then, the date will be filled in and the deed registered at the land registry office in the name of the new owner.

Targeted are Italians, Belgians, Germans, Slovaks, and especially Austrians, who alone, according to the authorities, control 2 million hectares in neighbouring Hungary. In truth, ten times less, claims the Austrian Agriculture Attaché in Budapest, Ernst Zimmerl. Wandering the paths of Görgeteg, Harri Fitos unveils the discrete deals that cause tongues to wag in the Hungarian countryside. Here, 50 hectares owned by the State Forestry Office made available, for free, to a well-connected “oligarch”; there, lands set aside, in principle for game, where corn has been sowed. "These are not listed on any land registry or in the gross domestic product. On the other hand, the Benetton's do everything quite legally," he notes.

Translated from the French by Pat Brett

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