AGRICULTURAL AND RURAL DEVELOPMENT AGENCY
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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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AGRICULTURAL AND RURAL DEVELOPMENT AGENCY (ARDA) Dr. László Rieger

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Agricultural and rural development agency arda dr l szl rieger

AGRICULTURAL AND RURAL DEVELOPMENT AGENCY

(ARDA)

Dr. László Rieger

Director of Intervention Measures


Intr o d u ction of arda

INTRODUCTION OF ARDA


Structure of arda

Structure of ARDA

PRESIDENT

Vice-President

Direct Payments

Directorate

Market Support

Measures Directorate

Intervention

Measures

Directorate

Financial

Directorate

IT Directorate

Rural

Development

Directorate

Budget

Management

Directorate

Internal Audit Dept.

County Offices

Directorate

HR Department

Legal Department

Physical Control

Dept.

Communication and

Management Dept.

ARDA County

Offices


The staff of arda

The staff of ARDA


Measures implemented by arda

MeasuresimplementedbyARDA

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

ARDOP

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

ARDA

Farmers, clients, companies


Agricultural and rural development agency arda dr l szl rieger

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 activities of arda

INTERVENTION ACTIVITIES OF ARDA


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


Cereal intervention in arda

CEREAL INTERVENTION IN ARDA


Intervention a new player in the cereal sector

Intervention

2004

Intervention

2005

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 %


Intervention storage capacities

Intervention storage capacities


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 warehouse system in hungary

PUBLIC WAREHOUSE SYSTEM IN HUNGARY


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).


Agricultural and rural development agency arda dr l szl rieger

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

Concordia1996

Hungaria1996

Danubius2006


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


Agricultural and rural development agency arda dr l szl rieger

Public warehousing and

EU intervention, cereal sector, 2005


Commodity exchange and eu intervention

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

CE and EU intervention – problems and possibilities

  • 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

Information

www.mvh.gov.hu

1/3743-603 és 1/3743-604

1385 Budapest 62. Pf.: 867


Thank you for the attention

Thank you for the attention!


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