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The Producer Organisation of Szentes 

‘DélkerTÉSZ’ is the largest Hungarian Producers’ Organisation (PO) with broad production networks of vertical and horizontal branches which encompass the vegetable (mainly paprika and tomato) growing sector in a much wider area than that of the Szentes District. The question that the case study poses is whether a specific form of produce co-operation supported by the EU Common Agricultural Policy (CAP) can or cannot prevent rural pauperisation by defending small-holders’ interests. The answer proposed by the case study is ‘yes’, a PO can slow down the impact of market pressures, as long as the organisational form protects members’ interests and its management concerns itself with the wellbeing of small-scale producers.

Despite being a protector of small producers, the management of the PO under investigation could not – and most probably was not willing to – block the gradual shifting of the co-operative in the direction of becoming an ordinary capital-driven enterprise. The pressure on producers to adapt was always high throughout the 16-year history of the PO. The co-operative supported its members substantially but not fully when competition forced them to invest in technology change in order to ensure an increase in their production, and this inevitably induced selection of members. Moreover, a growth strategy is dictated by the fact that CAP subsidies are calculated on the basis of sales’ turnover. Both market pressures and the mechanisms for providing subsidies explain why social aspects became secondary to market competition: both the proportion of bigger producers (expressed by sales) and the turnover of their sales have grown sharply in the last decade. In such a context, slowing down the immediate impact of market-penetration represents a significant  social defence for the vulnerable small-scale producers. This achievement of the PO under investigation is possibly not  sustainable in the longer run.

The geographical catchment area of the PO: members across the district and the country

For more information on this Case Study, please contact: Katalin Kovács, Centre for Economic and Regional Studies, (HAS):

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