A recent analysis of the Hungarian agroeconomy published by Takarékbank shows that in the past twenty years, labor has gradually become more and more costly in the agro sectors. While employee income increased proportional to the net production output of the agroeconomy until 2008, in 2010 the trends changed and labor became disproportionately expensive in the sector.
Compared to the base year 1999, both per capita output and per capita income figures reached their contemporary all-time peak of roughly 250% in 2008, while employee income was about 10.4-11.9% of the total production output. However, following a production output plunge in 2009, employee income continued the previous, steeper growth trend while production increased at a much slower pace.
By 2017, per capita output compared to the base year only increased to 295% while per capita income reached 393%, employee income making up for 14.9% of the gross output of the domestic agroeconomy. This is only partially due to the increase of transparency in agriculture and the shrinking of the black market.
According to the writers of the study, there are three possible ways to adapt to the circumstances, but none of them are viable in the short term. The first is the structural adoption of higher value added production methods. The second is the “branding” of the agroeconomy, making agricultural careers more attractive to younger generations, thus increasing the labor available in agriculture. The third possibility is the adaption of recent technological developments in the agro sphere.
Source: Agroberichten Buitenland.