Farm house in Tata
Courtesy Sam and Sarah Stulberg

Small-scale producers--individuals or small groups who tilled household plots or operated small farms--concentrated more on labor-intensive output or activities in which the risks of investment were to be assumed by those doing the work. In the late 1980s, Hungary had three types of small-scale farming units: approximately 623,000 household plots of cooperative members, about 792,000 small auxiliary farms of nonagricultural or state-farm employees, and a few private farms. Approximately 63 percent of the population participated in the small-scale agriculture sector. The combined contribution of household plots and auxiliary and private farms to gross agricultural output was 31.5 percent in 1975 and 31.3 percent in 1986. Successful integration of small-scale farming into the agricultural sector kept overall production levels high.

The government imposed few restrictions on the sale of output in the small-scale farming sector, and supply and demand determined prices in a free market. Thus, producers had a strong incentive to work hard and produce more. Before the mid-1980s, cooperatives were hostile to household producers. In the late 1980s, however, officials proclaimed that private household farming was a permanent component of agriculture under socialism. The central government encouraged cooperatives to assist members with household plots to boost production by providing seed, transport, machinery, advice, and marketing assistance. Household producers also qualified for subsidies, tax breaks, loans, and discount prices for machinery and agricultural chemicals. Regulations limited the size of household plots to 0.6 hectares of cropland and 0.23 hectares of vineyard or orchard per worker. The government abandoned earlier limits on livestock. Pensioners, housewives, dependents, and others performed most of the work on household plots and small-scale farms. Their labor amounted to about 2.3 billion man-hours annually and outstripped the total number of man-hours worked in large-scale farming.

Data as of September 1989