Economic Modelling Of Hungarian Farms Incorporating Nature Conservation

Hungary’s imminent entrance into the EU calls for a farm-level financial support system aiming at combining agricultural production with nature conservation targets. Within the Hungarian National Agri-environmental Programme (NAEP) for the Environmentally Sensitive Areas, a payment system was developed. For each individual region the amount of support for every environmentally friendly farming prescription package (tier) was established using the support calculation methodology of the EU. The purpose of this paper is to analyse the impact of the packages on the income of an individual mixed farm. In contrast to many other studies, in the current study the analysis was carried out with the context of the whole farm, taking into consideration the entire production structure. The amount of support which the farmer needs to sign up for a contract turned out to be quite different from the actual payments done by the Hungarian government.