Before Hungary joined the European Union – in order to gain access to the sources of Structural Funds and to create the expected regional information service – a build up of five-level territorial system was indispensable. Both in the EU and in Hungary, there are significant differences among regions. The aim of regional policy is to reduce... differences regarding development and living standards, in order to guarantee a reasonable living standard and income for every region’s inhabitants in the EU.
In Hungary, during the last decade, the effects of regional difference grew. While the advantage of the leading capital and its agglomeration and the eastern and western parts of Transdanubia was growing, meanwhile the most undeveloped areas' rates of development remained under the mean. The underdeveloped areas are in the northeastern part and in Southern Transdanubia. The developmental differences lead to such great social asymmetries, that these simply beg for remedying.
In this study, I would like to present the sub-regions of the North Great Plain Region and uncover the possible reasons of the developmental differences.
Some 80% of the revenues from tobacco production originate from subsidies, therefore the existence of the tobacco industry basically depends on the system of subsidies. According to the current position, in the transitional period of introduction of the CAP reform (from 2006 to 2009) at least 40% of tobacco premiums shall be decoupled from the...production, while the tobacco producing member states may decide to continue to pay the remaining 60% (or a less rate, depending on the rate of decoupling) in a coupled form. Tobacco premiums shall be fully decoupled as from the 2010 crop, however farmers will be eligible only for 50% of the subsidies, and the rest 50% shall be used for subsidising rural developments in tobacco producing regions (Radóczné, 2007).
This change affects the section very seriously. In EU-15 member states this system was introduced in 2006, which resulted in giving up tobacco growing by high percentage of the farmers (70-80% reduction of tobacco production in Greece and Belgium, and 45% reduction in Portugal). In Hungary – due to the small scale of the tobacco section – this rate reduction in production would jeopardise the existence of the section, therefore we are interested in maintaining the existing system of coupled subsidies to as a large extent and for as long time as possible.
This study shows the possibility of tobacco sector before and after introducing the changes in the system of subsidies, and formulates the most serious problems and roles of the sector.
Due to the effects of economic and political transformations, privatization and accession to the EU, Hungarian agriculture has gone through significant changes in the last two decades. As a result of continuous changes in the economic and regulatory environment, producers have to plan and maintain cultivation and adapt to the changing market ne...eds within continuously changing circumstances. These effects have resulted in a significant decline or in some cases, certain sectors have disappeared. These exercise a negative social and economic effect on all over the country, causing irreversible damages on those regions where agriculture is the only source of living. This paper discusses the effects of breakdown or disappearance of a traditional agricultural sector, namely the tobacco sector.