OTKA identification code: T037519

Supervisor: Takács István Dr.

Institute: Szent István University, Faculty of Economics and Social Sciences

Deparment of Accountancy and Finance

Title of research project:

Alternatives of rising of capital efficiency in equipment supplying of agriculture

Background and objectives:

The technical-technological level of Hungarian agriculture is increasingly left behind by countries with more developed agriculture. Farmers, sectorial organizations and of course the government have to play an important role in reducing the drawback in order to develop and operate technically and economically competitive (individual and corporate) farms.

By now the average age of assets in agriculture – due to an unsatisfactory level of new investments – has already exceeded 12-15 years.

Following the international tendencies of farm machinery the picture shows that even in those countries where most farms are small, machines with a high performance gained dominance.

What is the way out? Find and adopt solutions which have already proved to be suitable to satisfy the capacity needs of farms in a way which for them means a low capital demand. The most typical solutions are: hire an entrepreneur and draw on his service; borrow machines from a company with a lending activity; establish an association for obtaining machines which farmers will use collectively; establishing cooperatives for jointly obtaining and operating machines for production and establishing links to help each other operating the machines.

These solutions provide a great increase in the efficiency of capital by increasing the cooperation among farmers and coordinating their activity. However – due to legal, economic and social environment – their role is significantly less than it is economically justified.

In our research we would like to investigate – while paying special attention to the technical – technological development of agricultural enterprises – how the available tight financial resources can be used most efficiently, how the disadvantage of tightness can be turned into an advantage, how people working on technical development can contribute to increase the efficiency of agricultural capital assets in order to reduce per unit costs, to increase gross margin of production and to improve profitability.

The aim of our research is to try to find economic solutions, which – while paying attention to regional specialities – can from the side of financial solutions help us to renew aged asset stock and to improve individual and social capital efficiency.

The expected results are the following:

• Painting a realistic picture backed up with data on how strong economically the different types are, how large is their economic effect and how they operate.
• Determining legal, organizational and economic content and specialities of the different types.
• Provide numerical data on the effect of solutions for improving the efficiency of investments.
• Determining the information system model and information needs of agricultural enterprises including sole propreitorships.
• Developing models at regional levels for adopting different types of machine utilization which can be popularized.

Relevant foreign language publications in connection with project:

Takács, I. – Csitári, M.: Opportunities of beginning of farming and the growth possibilities of Hungarian farms with the accession to the EU approaching. X^th Congress of the European Association of Agricultural Economists. Zaragoza (Spain) 28 - 31 August 2002. Full paper: EAAE Congress CD. /posters presented/005-P011_Takacs-Cistari.pdf. 16 p.

Takács, I.: Requirement of Capital Efficiency and Technical Development in the Agriculture. Ekonomika a Manažment Podnikov v Procese Globalizácie. Zborník. Vedeckých Prác z Medzinárodných Vedeckých Dní 2002. Nitra, 16.-17. máj 2002. IV. zväzok, 2. diel. Ekonomika.1420-1424 p. ISBN 80-8069-031-6. ISBN 80-8069-026-X

Takács, I. – Németh, P.: Growth Possibilities of Hungarian Farms. Roczniki Naukowe. Stowarzyszenia Ekonomistów Rolnictwa i Agrobiznesu. Tom IV. Warszawa-Bydgoszcz. 2002. Zeszyt 5. 183-188. pp. ISSN 1508-3535