The success of the agricultural sector in large part has underpinned the country's high standard of living relative to the other countries of Eastern Europe. Agriculture provided an abundance of food, that, at least until the late 1980s, reinforced social and political stability. Hungary's farms also supplied aÍÍÍÍbout 25 percent of the country's convertible-currency exports, which were key because they funded imports of Western technology vital to industrial development. But the agricultural system also faced several nagging problems, including high production costs, difficulties in carving out new markets, and dependence on imported protein feeds, agricultural machinery, nonnitrogenous fertilizers, and other inputs.

In the late 1980s, agricultural output was divided about equally between plant and animal production. The country's main crops were corn, wheat, and sugar beets its main animal products were poultry, hogs, eggs, and milk (see table 9, Appendix). Hungary had been a net exporter of grain since 1973 and in the late 1980s was Eastern Europe's largest exporter of meat and meat products.

Hungarian agriculture's capital-intensive nature and its scale of production were closer to West European than East European levels. The agricultural sector used fewer but more powerful tractors in 1986 (53,947) than it did in 1970 (67,472). Hungary also reduced the amount of irrigated land and cut fertilizer use. Irrigated lands shrank from an average of 249,100 hectares in the 1971-75 period to 162,600 hectares in 1986. Fertilizer use fell from 224 kilograms per hectare in 1975 to 212 in 1986, while manure use grew slightly.

In 1986 the 129 state farms worked 26.1 percent of the country's cultivated land (2,159 hectares), employed 17.6 percent of the agricultural work force (163,000), and produced 17.6 percent of the country's agricultural gross output (about US$1.2 billion--see table 10, Appendix). Cooperative farming remained the largest social sector in the agricultural sector. In 1986 some 1,260 cooperative farms worked 76 percent of the cultivated land, employed 74.1 percent of the agricultural work force (691,000), and produced 51 percent of the country's agricultural gross output (US$3.4 billion).

In 1986 cooperative-farm members' household plots combined with auxiliary and private farms to produce 31.3 percent of agricultural gross output. These producers also supplied significant portions of specific crop and animal products. For example, in 1986 household plots and private farms produced 76 percent of Hungary's potatoes, 74.7 percent of its vegetables, 58.6 percent of its fruits, 48.8 percent of its wine grapes, 24.1 percent of its cattle, 55.5 percent of its pigs, and 43.1 percent of its poultry.

Data as of September 1989