agricultural and rural development agency (arda) dr. lászló rieger
DESCRIPTION
AGRICULTURAL AND RURAL DEVELOPMENT AGENCY (ARDA) Dr. László Rieger Director of Intervention Measures. INTR O D U CTION OF ARDA. Structure of ARDA. PRESIDENT. Vice-President. Direct Payments Directorate. Market Support Measures Directorate. Intervention Measures Directorate. - PowerPoint PPT PresentationTRANSCRIPT
AGRICULTURAL AND RURAL DEVELOPMENT
AGENCY(ARDA)
Dr. László RiegerDirector of Intervention Measures
INTRODUCTION OF ARDA
PRESIDENTStructure of ARDA
Vice-President
Direct PaymentsDirectorate
Market Support Measures Directorate
IT DirectorateFinancial
DirectorateBudget
ManagementDirectorate
InterventionMeasures
Directorate
RuralDevelopmentDirectorate
County OfficesDirectorateHR Department
Internal Audit Dept.
Legal Department
Communication and Management Dept.
Physical ControlDept.
ARDA CountyOffices
The staff of ARDATotal number of staff of ARDA 1 406
Number of staff at the Central Office (Budapest) 484
Number of staff at County Offices 922
Number of staff with college/university degree 1 149
Number of staff with secondary education 257
Percentage of male colleagues 46,5 %
Percentage of female colleagues 53,5 %
Number of staff of the Directorate of Intervention Measures 43
Percentage of staff of the Directorate of Intervention Measures 3,0 %
European Agricultural Guidance and Guarantee FundEAGGF Guarantee Section
EAGGF Guidance Section
Internal market measures
External market measures
Intervention measures
Direct payments (SAPS & CNDP)
Accompanying measures(Rural Development Plan)
National subsidies
Pre-accession fund: SAPARD
ARDOP
Measures implemented by ARDA
Total Amount of Payments by ARDA
Type of MeasuresType of Measures Payments Payments 2005.2005.
(million €)(million €)
PaymentsPayments2006. 2006.
(million €)(million €)
Direct paymentsDirect payments 682.8682.8 810.2810.2
InterventionIntervention 531.2531.2 577.9577.9
NRDP measuresNRDP measures 142.7142.7 267.3267.3
Market measuresMarket measures 56.856.8 24,724,7
Rural development Rural development measures measures (AVOP(AVOP++SAPARD)SAPARD)
174.8174.8 160.4160.4
TotalTotal 1588.31588.3 1840.51840.5
* Exchange rate: 275 HUF/EUR
The Importance of ARDA in the Hungarian Agricultural Sector
• ARDA is the only Paying Agency in Hungary (the advantages and disadvantages of the one-PA-model)
• ARDA implements all subsidy schemes in the Hungarian Agricultural Sector For the EU’s EAGF found;For the EU’s EARDF found,For existing national schemes
The total amount of subsidies is approximately 1,6-1,8 Billion € yearly
• National decision on the Institutional structure which implements EAGF and EARDF – Pros and contras for the one-PA model, and the handling of
delegated tasks;
• Determination of the national quotasDetermination of the national quotas – Hard negotiations with EU on the basis of statistical figuresHard negotiations with EU on the basis of statistical figures
• Parameterisation of CMO’sParameterisation of CMO’s– EU accepts all national EU accepts all national solution solution within within the the limits of existing CMO limits of existing CMO
regulationregulationss
• Developing a National Rural Development planDeveloping a National Rural Development plan– A crucial process to handle the very different national interests A crucial process to handle the very different national interests
within the Countrywithin the Country
Areas of Experiences of Hungary’s EU accession
Competent authorityCertifying bodyThe number of Paying Agencies (Coordinating body – if more than one PA)Decisions on delegated tasks
Major decisions on the Institutional structure – basic institutions
Major decisions of institutions of CAP implementation in Hungary
Ministry of Agricultural and
Rural Development
Competent Authority
State Audit Office
Certifying Body
ARDA
Farmers, clients, companies
• Hungarian Customs and Finance Guard• Hungarian State Treasury• Institute of Geodesy, Cartography and Remote
Sensing• Hungarian Chamber of Agriculture• National Institute for Agricultural Quality Control• National Council of Wine Communities• National Wine Quality Institute• State Forestry Service• Hungarian Institute of Agricultural Engineering• Ministry of Environment
Major decisions on the Institutional structure – delegation of tasks
INTERVENTION ACTIVITIES OF ARDA
Cereal ARDA implementsAlcohol three out of the sixSugar Intervention
schemesButterSkimmed milk powderBeef
Intervention Schemes in CAP
CEREAL INTERVENTION IN ARDA
In 2005 intervention quantity was 4 million tons
In 2005 harvest was 16 million tons
Market ratio was 25 + 25 %
In 2005 intervention quantity was 4 million tons
In 2005 harvest was 16 million tons
Market ratio was 25 + 25 %
Intervention - a New Player in the Cereal Sector
Intervention - a New Player in the Cereal Sector
Quantity of cereals offered for intervention
Total quantity offered 6 862 000 t
Withdrawn quantity 2 276 000 t
Rejected quantity 228 000 t
Net quantity of offered cereals
4 358 000 t
Buying-in of cerealsAmount of cereals taken over by ARDA
3 291 000 t
Intervention storage capacities
Storage capacities offered for intervention
Total offered storage capacities
6 540 000 t
Storage contracts
Amount of contractual storage capacities
4 672 000 t
Sales of Intervention stocks
Internal market Export Aid for the most deprived people Special measures (transport to Portugal
etc.)
17%3%
48%
32%
Cereal intervention sales Marketing year 2005/2006
Type of intervention sales Quantity (tons)
Wheat - export 242 000
Wheat – internal market 32 000
Maize - internal market 142 000
Barley -export 78 000
Wheat transport to Portugal 49 000
Maize transport to Portugal 49 000
Barley transport to Portugal 25 000
Maize transport to Spain 141 000
Wheat transport to Spain 209 000
Food aid for the most deprived 28 000
Total 995 000
Connection with the Commission – cereal intervention
• Weekly national representation in the Cereal Management Committee
• Ad hoc bilateral negotiations (most recent issue: minimum quality requirements for maize)
• National information service – weekly cereal report to Brussels
Reimbursement of the costs of cereal intervention by the EU
• Reimbursement of product value – member state credits to the EU, final reimbursement is paid upon selling the product
• Monthly reimbursement of technical and financial costs
• The method of reimbursement – standard internet software (called: e-Faudit) for all 25 member states
Denomination Unit Total Wheat MaizeOther Cereal
Sugar Alcohol
1. Open stocksThousand
ton/hl**3 757,3 1 330, 7 2 188,6 111,4 110,5 16,1
2. Purchased quantity
Thousand ton/hl**
4 276,8 874,3 3 170,2 84,2 121,8 26,2
3. Sold quantityThousand
tons/hl719,8 435,5 192,7 83,1 8,3 0,2
4. Closing stock Thousand
tons/hl7 314,3 1 769,5 5 166,2 112,4 224,0 42,1
5. Stock value Million HUF 190 453,5 39 805,3 127 030,7 2 424,5 20 458,7 0,7
6. EU reimburs. Mill.HUF 2 479,9 691,0 2 199,6 -9,3 -505,6 104,3
a) Technical costs Mill.HUF 3 053,6 602,5 1 756,5 44,8 102,7 3,9
b) Financial costs Mill.HUF 820,1 171,9 544,0 11,2 88,6 4,5
c) Other costs Mill.HUF -1 014,6 -151,2 -100,9 -65,5 -696,8 -0,3
d) Depreciat. Mill.HUF 179,4 67,7 0,0 15,4 0,0 96,2
PUBLIC WAREHOUSE SYSTEM IN HUNGARY
Public warehouse system
• Hungary was the second country in Europe where a public warehouse system was established at the end of the 19th century (Act of 1875. XXXVII.)
• New public warehouse act after the Communism collapsed (Act of 1996 XLVIII.)– Large foundation capital (1.8 million €)– Several products (not only cereals)– The act contains professional minimum requirement
for the management– Trading by warehouses is prohibited, but lending is
allowed (in an intermediates role).
Better understanding of the Hungarian WHR System - A comparison with the US WHR
system
Areas of significant differences
Hungarian WHR System US WHR System
1. Products covered All storable goods (not only grain) Only grain2. Identifying storedgrain
Individual identification, using different parameters
A standard grading system exists
3. Supervision Supervision deals with a large number of products, limited
knowledge for grains
Only cereals with, full professional knowledge
4. Number of public warehouses
Because of the very high minimum capital requirement, highly
monopolized sector (only three warehouses)
Warehouses also dominates on the basic level of the grain flow, a huge
number of warehouses,
5. Activities Storing grain, trade is prohibited Insufficient profitability without trading, main activities are storage
and grain tradingClient to be served Trade law of 1875, basically
tailored for tradersWarehouse Act tailored for defence of grain producers
WHR companies in Hungary
Name of the company Year of foundationConcordia 1996Hungaria 1996Danubius 2006
The process of lending
• Public warehouse receipt is the collateral
• The warehouse ticket has two parts in Hungary
• Both parts are kept as collateral by the bank when lending against warehouse receipts
• Warehouse companies can be granted a line of credit by banks, and lend directly to the owner of the warehouse receipt.
The importance of WHR for the Hungarian cereal sector and especially
for the ARDAFor the cereal sectorWHR credit supports the financing of
cereal production in the critical period (before intervention buying-in starts)
For ARDAARDA has involved the WHR system into
the implementation of intervention
Public warehousing and EU intervention, cereal sector, 2005
Crop Public warehousing (1 000 tons)
EU interveniton (1 000 tons)
Hungarian production
Wheat 1 663 1 759 5 079
Maize
3 146 5 112 9 017
Total
4 809 6 872 14 096
Hungarian production = 100
Wheat
32,7
34,6
100,0
Maize
34,9
56,7
100,0
Total
34,1
48,8
100,0
Commodity exchange and EU intervention
• Price risk has been reduced by introducing EU intervention, this lessens the role of CE;
• In the first year of intervention the uncertainty of the intervention mechanism gave additional chance to the CE;
• CE has a role if market prices are high (above the intervention minimum).
CE and EU intervention – problems and possibilities
• Different standards (product qualities) for the CE and for intervention buying-in
• Two options for mega-storehouses– Involving mega-storehouses in the physical
delivery as delivery basis (these can be used as delivery points for futures contracts).
Information
www.mvh.gov.huwww.mvh.gov.hu
1/3743-603 és 1/3743-603 és 1/3743-6041/3743-604
1385 Budapest 62. 1385 Budapest 62. Pf.: 867Pf.: 867
Thank you for the attention!