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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.

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Dr. László Rieger

Director of Intervention Measures

Intr o d u ction of arda

Structure of arda
Structure of ARDA



Direct Payments


Market Support

Measures Directorate






IT Directorate







Internal Audit Dept.

County Offices


HR Department

Legal Department

Physical Control


Communication and

Management Dept.

ARDA County


Measures implemented by arda

European AgriculturalGuidance and Guarantee Fund

EAGGF Guarantee Section

Internal market measures

External market measures

Intervention measures

Direct payments (SAPS & CNDP)

Accompanying measures

(Rural Development Plan)

EAGGFGuidance Section


Pre-accession fund: SAPARD

National subsidies

Total amount of payments by arda
Total Amount of Payments by ARDA

* Exchange rate: 275 HUF/EUR

The importance of arda in the hungarian agricultural sector
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

Areas of experiences of hungary s eu accession
Areas of Experiences of Hungary’s EU accession

  • 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 quotas

    • Hard negotiations with EU on the basis of statistical figures

  • Parameterisation of CMO’s

    • EU accepts all national solution within the limits of existing CMO regulations

  • Developing a National Rural Development plan

    • A crucial process to handle the very different national interests within the Country

M ajor decisions on the institutional structure basic institutions
Major decisions on the Institutional structure – basic institutions

  • Competent authority

  • Certifying body

  • The number of Paying Agencies

  • (Coordinating body – if more than one PA)

  • Decisions on delegated tasks

Ma jor decisions of institutions of cap implementation in hungary
Major decisions of institutions of CAP implementation in Hungary

Ministry of Agricultural and Rural Development

Competent Authority

State Audit Office

Certifying Body


Farmers, clients, companies

Major decisions on the Institutional structure – delegation of tasks

  • 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

Intervention schemes in cap
Intervention Schemes in CAP

  • Cereal ARDA implements

  • Alcohol three out of the six

  • Sugar Intervention schemes

  • Butter

  • Skimmed milk powder

  • Beef

Intervention a new player in the cereal sector





Cereal Sector

Intervention - a New Player in the Cereal Sector

  • In 2005 intervention quantity was 4 million tons

  • In 2005 harvest was 16 million tons

  • Market ratio was 25 + 25 %

Sale s of intervention stocks
Sales of Intervention stocks

  • Internal market

  • Export

  • Aid for the most deprivedpeople

  • Special measures (transport toPortugaletc.)

C ereal intervention sales marketing year 2005 2006
Cereal intervention sales Marketing year 2005/2006

Connection with the commission cereal intervention
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

R eimbursement of the costs of cereal intervention by the eu
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

Public warehous e system
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 HungarianWHR System - A comparison with the US WHR system

Whr companies in hungary

WHR companies in Hungary

Name of the companyYear of foundation

Concordia 1996

Hungaria 1996

Danubius 2006

The process of lending
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 arda
The importance of WHR for the Hungarian cereal sector and especially for the ARDA

For the cereal sector

  • WHR credit supports the financing of cereal production in the critical period (before intervention buying-in starts)

    For ARDA

  • ARDA has involved the WHR system into the implementation of intervention

P especially for the ARDAublic warehousing and

EU intervention, cereal sector, 2005

Commodity exchange and eu intervention
Commodity exchange and EU intervention especially for the ARDA

  • 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
CE and EU intervention – problems and possibilities especially for the ARDA

  • Different standards (product qualities) forthe 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 especially for the ARDA


 1/3743-603 és 1/3743-604

 1385 Budapest 62. Pf.: 867

Thank you for the attention
Thank you for the attention! especially for the ARDA