“Pilot studies in the framework of linking IACS and other ...

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Final Report on

“Pilot studies in the framework of linking IACS and other administrative register

and statistics”

Eurostat Grant Agreement number: 08414.2013.001-2013.459

HUNGARY

Compiled by:

Péter Tóth – Hungarian Central Statistical Office Gábor Valkó – Hungarian Central Statistical Office György Lengyel – Hungarian Central Statistical Office Tímea Hegedűs - Agricultural and Rural Development Agency Attila Puskás – Agricultural and Rural Development Agency Csilla Bárdos – Hungarian Central Statistical Office Mónika Hipszki – Hungarian Central Statistical Office Gabriella Jakubecz – Hungarian Central Statistical Office Anikó Oláhné Vári – Hungarian Central Statistical Office Tímea Pataki – Hungarian Central Statistical Office Zsuzsanna Szemán – Hungarian Central Statistical Office László Tohai – Hungarian Central Statistical Office Andrea Tóth– Hungarian Central Statistical Office

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Table of content

Executive summary 4

I. Structure of organizations in Hungary 5

II. Data needs of the HCSO 6

1. Agricultural Censuses 6

2. Farm Structure Surveys 7

3. Economic Accounts for Agriculture 8

III.Data transfer 11

1. KARAT: The new integrated data transmission system of the HCSO 11

2. Examples for internal data flow in Hungary 13

IV.New methodological approaches 14

1. Land use statistics 14

2. Fruit and wine plantation statistics 23

3. Use of pesticides 27

4. Farm Register 27

V.Improvement of the internal data flow 29

VI.Summary 34

1. Expert responsibilities 34

2. Evaluation 35

2.2. Summary of data supply responsibilities related to the Hungarian Central

Statistical Office 36

VII.List of abbreviations 42

Annex 43

1. The procedures applied by ARDA 43

1.1.1. Assessing request for support 44 1.1.2. The payment of support determined in the legislation and evaluation

process 45 1.1.3. Permission 46 1.1.4. Setting quotas 46 1.1.5. Intervention buying and selling intervention stocks 46 1.1.6. Change of decisions taken in previous proceedings, remedy, complaints 47

1.2. Procedures initiated by ARDA 47

1.2.1. Control procedures 47

1.2.2. Irregularity management 50 1.2.3. Sanctions 50 1.2.4. Enforcement of claims 50 1.2.5. Public procurement 50

2. The connection of funds and programs 52

2.1. The EMVA and EMGA 54

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2.2. European Fisheries Fund 2007-2013 54

2.3. European Maritime and Fisheries Fund 2014-2020 54

3. Funds managed by ARDA 55

3.1. Market measures 55

3.1.1. Internal market measures 55 3.1.2. External market measures 55 3.1.3. Intervention measures 55

3.2. Direct payments 55

3.2.1. Single area payments and other direct subsidies 55

3.3. “New Hungary Rural Development Programme” within the frame of Darányi

Ignác Plan 56 3.4. Rural Development Programme 57

3.5. Operational Programme for Fisheries (HOP) 58 3.6. Hungarian Operational Programme for Fisheries (MAHOP) 59 3.7. National Development Plan (AVOP) 59 3.8. National Rural Development Plan 59

3.9. SAPARD Program 60

4. Data management of ARDA 61

4.1. Registration of clients applying for support 61 4.2. Handling of the support data 64

4.3. Data supply 65 4.4. Special provisions on the protection of support data 65 4.5. Agricultural Land Parcel Identification System 67

4.5.1. Data content of MePAR 69 4.5.2. Definition of a physical block 69

4.5.3. Scheme-type renewal of MePAR data 70 4.5.4. MePAR’s change management procedure 70

4.6. Uniform Registration and Identification System (ENAR) 71 4.7. Area payments and other related support types 72

4.8. Single area payment 74 4.9. Transitional national subsidy related to the single area payment scheme 76

4.9.1. Supporting the raising of fattened bulls 77

4.9.2. Milk subsidy 77 4.9.3. Subsidy provided for keeping suckler cows 77

4.9.4. Subsidy provided for keeping extensification cattle 77 4.9.5. Subsidy provided for keeping ewes 77

4.9.6. Subsidy provided for keeping ewes in areas with unfavourable

characteristics 78

4.9.7. Supporting the growing of tobacco 78

4.10.Procedural rules of the transitional national subsidy 78 4.11.Data supply obligation 79

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Executive summary

The burden of the Statistical Services and the respondents is a huge problem for several years

in Hungary. New challenges and needs arising, while the older ones disappear. Improving

efficiency and reducing costs in agricultural statistics by using administrative data instead of

statistical surveys is one of the main tasks of the Hungarian Central Statistical Office (HCSO).

The main objectives of the project were the followings:

- Developing agricultural statistics so that data that are already available are not

collected again, thus reducing the burden on both respondents and the statistical

systems.

- Creating access to administrative data for statistics by adapting the information

systems

- Adapting the statistical collection methods to take advantage of the support systems

that are already in place.

The expected results were the followings:

- Adaptation, development and improvement of the information structures, aimed at

gaining access to the IACS and other agricultural administrative registers, improving

the data transfer and similar issues.

- Developing and testing new methodological approaches regarding data collection that

would reduce the response burden by improving the synergy between statistical

surveys and administrative data collection.

- Improvement of the internal data flow and data treatment in Hungary, including the

cooperation and coordination between the statistical and agricultural administrations.

- Setting up farm registers and developing processes for their maintenance, based on

administrative registers.

The main elements and time schedule:

1st phase: listing of administrative data sources and completing the data sources (M+12)

2nd

phase: listing the data sources of the Agricultural and Rural Development Agency

(ARDA), which is the paying agency for agricultural and rural development subsidies (M+23

till M+29)

3rd

phase: options of using administrative data sources, expectations and inquiring the

compliance (M+30)

External experts were responsible for Subcontractor for listing the data sources of the

Agricultural and Rural Development Agency.

They were involved in finding options of using administrative data sources. The external

experts were also involved in outlining the necessary future improvements of linking

administrative and statistical data sources

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I. Structure of organizations in Hungary

The Hungarian Central Statistical Office (HCSO) has a long tradition and is a government

office.

The main tasks of the HCSO are the followings:

Designing and conducting surveys, recording, - processing and storing data, data analyses-

and dissemination, protection of individual data.

The Office provides data for the parliament and public administration, social organizations,

local authorities, scientific bodies, economic organizations, the general public and the media

as well as for international organizations and users abroad. Official data regarding the socio-

economic situation as well as the changes in the population of the country are published by

the HCSO.

The Hungarian Central Statistical Office, in order to fulfil its tasks, may ask information from

the members of the official statistical service (Other National Authorities) about their

statistical activities and about the implementation of the National Statistical Data Collection

Programme and they are obliged to provide the requested information. These organisations

are:

the ministries;

the President of the National Office for the Judiciary;

the Office of the Prosecutor General;

the National Bank of Hungary;

the Hungarian Competition Authority;

the National Research, Development and Innovation Office;

the Hungarian Energy and Public Utility Regulatory Authority;

the Research Institute of Agricultural Economics.

Moreover, besides the officially agreed secondary data collections, the office set out

negotiations with other institutions and agencies to have a clear view on the country’s

economy. The most important stakeholder in this domain is responsible for the

implementation of aid instruments financed from both European Agricultural Guarantee Fund

(EAGF) and European Agricultural Fund for Rural Development (EAFRD), and also national

schemes.

The Agricultural and Rural Development Agency (ARDA) is an institution founded for

managing the applications for supports financed from the Common Agricultural Policy (CAP)

and the ones provided by the Hungarian national budget as well as for the allocation of the

supports and the implementation of measures for the regulation of the market.

http://www.kormany.hu/

http://birosag.hu/obh

http://mklu.hu/hnlp14/

http://www.mnb.hu/Statisztika

http://www.gvh.hu/

http://nkfih.gov.hu/

http://www.mekh.hu/

https://www.aki.gov.hu/publikaciok/menu/a:304/Adatok+%C3%A9s+inform%C3%A1ci%C3%B3k/Statisztikai+jelent%C3%A9sek,+inform%C3%A1ci%C3%B3k

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II. Data needs of the HCSO

The task and purpose of statistics are to give a true and objective picture on the state of the

agriculture and changes in the economy for state and public authorities as well as for the

organizations and members of the society. To achieve this goal, the Hungarian Central

Statistical Office compiles its data collection programme and organizes the transfer and

receipt of data.

Paper-based questionnaires have a long tradition in Hungary being the assets of the data

collection process. However, since the first survey was conducted in 1868 significant changes

have been occurred. Enumerators meet more and more difficulties in finding individual

dataproviders home in the right time to answer the questionnaire while the emerging

technological innovations and online access enable to use electronic systems widely for this

purpose. The HCSO ELEKTRA, the electronic data collection system renewed by the

Hungarian Central Statistical Office makes the provision of information simpler and more

user-friendly and decreases the administrative burdens of those affected. Nevertheless, it is

designed for agricultural businesses and not for private holdings. To make the survey

implementation easier, quicker, more cost-efficient and gain more precise results without

response burdens the already available data was set into a newly developed data collection

program.

A huge part of data on agricultural production by holdings is already available in other

institution’s databases. In order not to overload dataproviders with unnecessary deadlines and

gather information in a cost-effective way administrative data is used according to clearly

defined agreements with other statistical organizations. Data transfer between HCSO and

ARDA can be regarded as a use case for this solution. ARDA sends the identification data of

the support legal titles valid in the year proceeding the current year by January 10 of the

current year to the HCSO.

1. Agricultural Censuses

In connection with the preparatory work related to the agricultural censuses, HCSO

indicates those legal titles from the list of legal titles that has been sent to them, regarding

which ARDA has an obligation to supply the following data by February 15 of the current

year, by legal titles.

Data to be supplied:

client ID

client name

ZIP code (residence/official seat)

name of settlement (residence/official seat)

street, house number (residence/official seat)

client category (person/organization)

tax number/tax identification number

registration number (partnerships)

legal title

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value of indicator serving as the basis for support (hectare for areas, piece or livestock

unit for animals)

2. Farm Structure Surveys

In connection with the preparatory work related to the farm structure surveys, HCSO

indicates those legal titles from the list of legal titles that has been sent to them, regarding

which ARDA has an obligation to supply the following data by February 15 of the current

year, by legal titles.

Data to be supplied:

client ID

client name

ZIP code (residence/official seat)

name of settlement (residence/official seat)

street, house number (residence/official seat)

client category (person/organization)

tax number/tax identification number

registration number (partnerships)

legal title

Y//N in the case of rural development aids, hectare in the case of area payments

The data requirement for the identification data of recorded clients to be supplied with

geocodes and uploaded by HCSO by April 15 of the current year includes the following data

(at least 1 value per record is included in the delivered data portfolio):

record ID provided by HCSO

client ID provided by HCSO

block ID provided by HCSO

topographical number provided by HCSO

Based on the data requirement uploaded by HCSO, ARDA will supply the following

geocoded client data by June 15 of the current year:

record ID provided by HCSO

client ID provided by HCSO

block ID provided by HCSO

topographical number provided by HCSO

classification of client identification (non-existent, existent)

classification of block identification (non-existent; existent; existent but does not

belong to the client)

classification of topographical number (non-existent; existent; existent but does not

belong to the client)

block centroid EOV-x

block centroid EOV-y

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3. Economic Accounts for Agriculture

On November 15 of the current year, the following data should be supplied by ARDA:

payments in the period between January 1 and October 31 of the current year by legal

titles, financial years, in a breakdown by county and client type

number of applications for area payments in the period between January 1 and October

31 of the current year, as well as the size of the area, and the amount of paid advances

by legal titles

number of applications for animal-based support in the period between January 1 and

October 31 of the current year and the number of animals affected by the applications

by legal titles

amount of EAFRD aids applied for and approved in the period between January 1 and

October 31 of the current year and the commitments to be expected for November-

December by legal titles

On January 15 of the current year, the following data should be supplied by ARDA:

payments in the period between January 1 and December 31 of the year preceding the

current year by legal titles, financial years, in a breakdown by county and client type

number of applications for area payments in the period between January 1 and

December 31 of the year preceding the current year, as well as the size of the area

applied for and approved (if available), approved amount (if available), the amount of

the paid advance, as well as the amount of envelopes by legal titles

number of applications for animal-based support in the period between January 1 and

December 31 of the year preceding the current year, the number of animals affected by

the applications, as well as the amount of envelopes by legal titles


December 31 of the year preceding the current year by legal titles, in a breakdown by

county and client type

On July 31 of the current year, the following data should be supplied by ARDA:

payments in the period between January 1 and June 30 of the year preceding the

current year by legal titles, financial years, in a breakdown by county and client type

support amount of claimed and approved area payments for the year preceding the

current year by legal titles, in a breakdown by county and client type, as well as the

areas claimed and approved by legal titles, in a breakdown by county, client type and

utilization code

number of applications for the animal-based support for the year preceding the current

year, animal number and the amounts of approved subsidies by legal titles, in a

breakdown by county and client type

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December 31 of the year preceding the current year, the number of applications, by

legal titles, in a breakdown by county and client type

The need for statistical codes

ARDA sends over the first eight digits of the tax numbers of those clients for which the data

reconciliation is necessary by the last day of each month. Within five work days after sending

such data, HCSO will deliver the following data to ARDA:

the first eight digits of the tax number

name

VAT code

unified sectoral classification code of economic activities (TEÁOR code)

form of business operation code (GFO code)

regional (county) code

Differences in the content of the concept of an agricultural holding:

In regulation (EC) No. 1166/2008, the concept of an agricultural holding or holding means “a

single unit, both technically and economically, which has a single management and which

undertakes agricultural activities (Growing of non-perennial crops, Growing of perennial

crops, Plant propagation, Animal production, Mixed farming, Support activities to agriculture

and postharvest crop activities) within the economic territory of the European Union, either as

its primary or secondary activity”.

For the planning period of 2007-2013, the concept of an agricultural holding is defined in

regulation (EC) No. 73/2009 as follows: “all the production units managed by a farmer

situated within the territory of the same Member State”. The concept of a farmer is defined as

a “a natural or legal person, or a group of natural or legal persons, whatever legal status is

granted to the group and its members by national law, whose holding is situated within

Community territory, as defined in Article 299 of the Treaty, and who exercises an

agricultural activity”.

In the planning period of 2014-2020, the concepts used in the previous period are used with

the same content.

One of the fundamental criteria for using agricultural subsidies is the possession of client

identification. It is the previously defined data that should be provided when applying for

client identification. According to the statutory requirements, a client may only have one

client identification, so it cannot happen that a client has several client ID’s. However, it may

happen that several client ID’s belong to one residence/official seat (e.g. those of the family

members), and these can be separated by client ID, name, tax number/tax identification

number, and mother’s maiden name.

It is another fundamental criterion for using agricultural subsidies that the criteria for the basic

eligibilities defined in the individual legal title decrees be fulfilled.

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In the FSS 2016, it is the condition on June 1, 2016 based on which the criteria for qualifying

a piece of land as an agricultural holding is established. Based on the uniform applications

submitted to ARDA, the 2016 data on the final controlled and approved support amounts, for

which the payments have been effected (advance payment, tranche payment, final payment)

will be available after June 30, 2017. After June 30, 2016, the final 2015 data will be

available. Each year, the required data are available after the submission period, based on

which the claims can be aggregated.

The following differences can be noted between the holding threshold and the criteria for the

submission of the uniform application:

in the case of a uniform application, the lowest extent of support reaches or exceeds 1

hectare. If the supportable area consists of several reported land blocks, the

supportable area of the individual reported land blocks should reach 0.25 hectare,

while in the case of a holding threshold, the minimum size of the productive land area

should be 0.15 hectare, while in the case of an orchard or vineyard, it should be 0.05

hectare.

in the case of a uniform application for livestock, a claim for sheep, goats and cattle

are submitted.

the following groups of data are not part of those to be submitted for the uniform

application:

o area of green house, foil tent

o area used for growing mushrooms

o area used for raising poultry, domestic rabbits, furbearing animals, utility

pigeons, bee families

o entity providing agricultural services

After reviewing the data sheet of the 2016 Farm Structure Survey, the following conclusions

can be drawn:

In the case of land use, when an application is submitted as a uniform application, it is

examined whether the applicant has the right to use the claimed land for the period

specified in the law. The Agency only checks the land use right, as for the awarding of

the grant, it holds no relevance whether the property is owned or rented. The

breakdown by owned or rented area as specified in the data sheet can be divided by

taking over supplementary data (owned, rented) from the core database (land registry).

The area-based division can be provided by the data that belongs to the block ID

(settlement).

The utilization codes used in the uniform application are broken down in more detail

than those in the data sheet. By compiling a translation key, the two lists can be

reconciled.

The uniform application does not contain any data on human-size glasshouses, foil

houses and foil tents.

In the case of an application submitted as a uniform application, there are no data at all

on the applied arable land soil cultivation, irrigation or the fertilization of the

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agricultural land area. It is worth checking whether the data kept in the agro diary

according to the statutory requirements can be used.

Vegetable gardens cannot be supported in the framework of a uniform application.

If the used land area changes, the applicant may submit an application for change

management attached to the uniform application, in which the change within the year

of receiving support can be reported. Such report also has a time limit in order to be

able to establish the size of the supportable area. The change management request

submitted after the date defined by law cannot be taken into account with regard to the

uniform application of the specific year.

In the case of animal production, in the case of the legal titles for animal-related

support that can be applied for in the framework of the uniform application, it is the

data specified in the legal title decree that should be supplied (individual ID), based on

which the eligibility criteria defined in the legal title decree can be checked after query

from ENAR. As the keeping of the registers of ENAR is not the competence of

ARDA, the data required for the checking of eligibility are provided by NFCSO in the

framework of a cooperation agreement. It is worth examining whether the breakdowns

in the data sheet can be used in the case of the animal species recorded in ENAR.

No data on farming and employment are required in the framework of a uniform

application.

III. Data transfer

1. KARAT: The new integrated data transmission system of the HCSO

The number of administrative data sources (secondary data sources) used for the production

of official statistics has increased in the HCSO in the past few years. These data transmissions

were managed differently throughout the HCSO with different safeguards in place regarding

quality, the accompanying metadata and database-management. In order to address this issue,

a new, integrated data transmission system – called KARAT – was developed in 2013-2014

for the transmission of administrative data to the HCSO from the owners of administrative

data.

KARAT provides a secure channel for receiving secondary datasets; it applies uniform data

transmission procedures and standard documentation. The system also manages not only the

transfer of secondary data, but it provides secure channels for the transfer of statistical data

sets from the HCSO to users requesting statistical data from the Office.

All data sources (primary and secondary data sources) used at the HCSO are registered and

described in the Metainformation System. The new data transmission system is built on

metadata, it gives the documentation of secondary sources, and its metadata drive the flow of

data transmission and processing of the transferred data sets. The system has a number of

automatic, proactive functions to support the task of the data masters and data providers of the

secondary sources. The deadlines, the flow and completeness of data transmission are

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controlled by the system. It ensures automatic functions to load the datasets into database. The

receival of the datasets is also registered in the system. The data providers and the responsible

statisticians are noticed about either the reception or any problem occurred. The user

requesting statistical data get similar support to download their required data sets.

The KARAT system consists of three subsystems:

1. Internal KARAT system:

maintenance of receipts of data (planning, organising, filing, transcription)

o reference data

o messages

o files to send

o precession method

querying receipts of data (stock, metadata, downloading, task lists)

querying of data release

monitoring of data usage

administration

2. External KARAT system on the homepage of HCSO:

interface of data transfer for owners and submissions

3. External KARAT system on the homepage of HCSO:

required data can be downloaded via ADKI system

Receipts of files after sending them once via KARAT is automatic, however, data coming

from other kind of way could be also registered and uploaded easily to the internal system.

Further processing is feasible in two ways:

loading into database according to the origin structure; thereafter data can be

formed onto the structure of production database using ADAMES (Integrated

Survey Control System for Secondary Data Sources) as it identified in the meta

system

or downloading from KARAT in the same form without any modification

ADAMES is a data preparation system linked to administrative data and also asserting

control criteria. It is suitable for prepare, analyse, check and correct data coming to HCSO in

other form than questionnaire type. ADAMES is an IT tool designed for managing data

received via KARAT in a homogenous, standard manner internal in the office. Data intended

to load into database is associated with META codes in ADAMES, which makes it

unavoidable in this process. The output is transmitted to EAR (Integrated Data Processing IT

System) or to other target systems.

KARAT provides secure channels for receiving datasets:

o Uploading and downloading via homepage of HCSO for KARAT

o Uploading and downloading via official gateway

entering via client gate or

scheduled PC connection

o Uploading and downloading via web services

o Uploading and downloading via IBM WebSphere MQ

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Access is feasible using a registration form or via client gate after entering the necessary

information once. If there is any other reporting obligation fulfilled with questionnaire, access

via ELEKTRA, electronic data collecting system of HCSO is also suitable.

KARAT also has monitoring functions to manage the whole data transfer procedure. The

quality of the data transmission process can be measured by different indicators. The new

system contributes to the improvement, standardisation and monitoring of process quality

related to the transmission of administrative data and data requests making the KARAT

system one of the key systems for the HCSO business processes.

2. Examples for internal data flow in Hungary

A smooth data flow between NFCSO and HCSO has been already realised via KARAT in

case of a few domains. The Rural Development, Agriculture and Environment Statistics

Department manages 24 data transfer per year, most of them is fulfilled once in this period as

the greenhouse gas inventory, data of the National Council of Wine Communities or forest

statistics.

One of the most important register is the Register of licensed agricultural small-scale

producers. It is used in the preparation phase of the June and December agricultural surveys

and also for the purpose of FSSs. The register contains unique identifiers of farmers (name,

address, Tax number) owing certificate of licenced traditional small-scale production. The

national Farm Register is updated with this information regularly.

One another example on administrative registers is the database on hatcheries. It contains

almost 160 entity having licence for the activity. As an agricultural enterprise or private

holding hatched eggs, a few days remain left for reporting this fact to the NFCSO

compulsorily. Experts of HCSO have an access to this database which enables to build an

appropriate pool of data providers for questionnaires on hatcheries of HCSO. Once a month is

a deadline to upload the number of hatched eggs which is automatically transmitted via

KARAT and is visible and accessible using internal PC-s in the HCSO. However,

unfortunately the questions are not the same on the two kinds of forms. Grand totals concur

with each other, but indicators differ.

HCSO collect data on:

categorised values according to use

age and sex

export-import quantity

NFCSO collect data on:

up-to date number of eggs hatched

what kind of eggs are hatched

time of hatching

The other best case is related to the ENAR system.

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IV. New methodological approaches

1. Land use statistics

Data on land use categories are collected considering the actual method of use characteristics

for the land area, including arable land, kitchen garden, orchard, vineyard, grassland

(intensive, extensive), forest, reed, fishpond and uncultivated land in the framework of the

agricultural land utilisation. The measured phenomena is the land area actually used by the

holding involved in agricultural activity in the period of observation irrespective of the land

property registry, i.e. in the given area the user of the land carried actually the risk of

cultivation including any gain or deficit from land use. By land use a given holding may have

land area privately owned, rented or used under other title. Land use includes roads and land

areas, which are not under agricultural cultivation.

In order to simplify the data collection system and reduce the respondents’ burden in the years

of FSSs the regular survey questionnaires on Land use and sown area in June are corporated

into the questionnaire of the FSS or AC both for agricultural enterprises and for private

holdings. FSS, mentioned in this chapter below, is to be stand for only the land use part of the

whole survey questionnaire as to make comparison and unification between each survey

years.

1.1. Similarities and differences between FFS and annual data collection

The annual National Statistical Data Collection (Questionnaire No. 1082) on land use and

sown area on 1st June is temporarily not available in years of the Farm Structure Survey. The

continuity is ensured as data collected in the FSS is in accordance with the data collection No.

1082 considering both the reference reporting holdings and time period. Moreover, it provides

an opportunity to follow up changes in utilised land area later on.

Among private holdings, sample survey is carried out due to the high number of farmers

engaged in any agricultural activity. Annually 5.5 per cent of all private holdings, some 26.5

thousand are included in the sample. In contrast to this, in years of FSS’s this counts about

23% of all (approximately hundred thousand private holdings). The significantly higher

sample is indicated by a European data demand on the utilised land, livestock, labour force

and other gainful activities by agricultural units.

In order to minimise the response burden, a new sample is chosen in every three years, in

particular with regards to the designation of data suppliers. Therefore, the follow up of

respondents is feasible only in the given three years after the FSS.

Another important difference occurs during the balance sheet compilation. Balance sheets on

land use and sown area in Hungary consists of the following components:

data of agricultural enterprises

data of private and key private holdings

and areas which cannot be assigned to holdings

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The latter one is derived mainly from administrative sources and expert estimations, and

eventually is not covered in the FSS due to its methodology. As the recorded basic survey

data is transmitted to the Eurostat for each holding, it could sharply differ from the national

land use data. The main reason for this is that no expert estimation is added up to the

published final results of FSS which could make a correction needed due to the above

mentioned methodological aspects. National land statistics must cover the whole area of the

country in the balance sheets.

Thus, dataset of Farm Structure Surveys differs from those of the annual balances while these

are basic data derived from the rough collected information with aggregation and

multiplication of the sample points. Due to this method the survey data on productive land is

nearly 1.5 million hectares less, than in the balance sheet.

1.2. Survey method

For the implementation of FSSs or annual agricultural surveys in June a combination of

exhaustive and sample survey is used. Separate questionnaire is used in case of agricultural

enterprises, while questions on the utilised land and number of animals (and in years of FFSs

on labour force and additional information) in case of private farms are part of a

representative agricultural survey. The supply of data is compulsory for both form of farming.

Agricultural enterprises (units with legal entity) are always observed on full scope while

regarding private holdings (units without legal entity) surveys are carried out on full scope or

representative basis. Data collection of private holdings is made on a sample basis by

enumerators with face to face interviews. In addition, a separate strata with a separate

threshold for the key private holdings were developed. These private holdings were sending

their data by post regularly; however they are integrated into the electronic data collection

system from 2016. Agricultural enterprises have to report their agricultural activity via

internet.

In case of agricultural enterprises all of the organisations involved in agricultural production

are selected for the survey. They are part of the business register of HCSO updated

continuously with data transmitted from the Registry Court. They are legal entities engaged in

any kind of agricultural activity regardless of their size. However in case of termination or

spin-off processes the follow-up of the utilised land area is not easy. The new user will be

included only the next survey unless the regional colleagues have any information on this

transformation.

The sample of the survey on private holdings is based on the agricultural census carried out in

2010 (AC 2010) and the farm structure survey conducted in 2013 (FSS 2013). The whole

country is divided into districts of 150 to 200 addresses in a compact part of a settlement.

Enumerators should bring into contact with all of the inhabitants living habitually in the

designated area from house to house method.

In 2013, in accordance with the community legislation the location of holding was asked by

the respondents.

The location of the holding was asked by the followings:

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Does the holding carry out agricultural activities only the same address as indicated

on the front page? (which was the address of the farmer and where the interview have

done)

If there are agricultural activities carried out on other address then the one indicated

on the front page, please provide land parcel or land register numbers. If there are

more than one of other locations, please provide the registration number of the most

significant:

o IACS register number or

o postal code, settlement, land registration number

Is the agricultural activity carried out on other address more significant?

This helped by the exact localisation of the holding as it is the one where the most significant

agricultural activity is carried out. So that holdings were able to be described at local level.

However, according to the legislation there was no need for GPS coordinates in case of FSS

2016. The concentration of the agricultural activity should be indicated only at NUTS3 level

which is equivalent to the Hungarian county level and implied a modification on the

questionnaire:

the address of the data provider was given on the front page

while information was collected on the name and IACS register number on the back

cover

Agricultural censuses are carried out on full scope on the approximately 14,000 agricultural

survey districts. From all of these about 600 are chosen yearly, which are also fully observed

in the framework of the annual agricultural survey on the utilised land and livestock. In years

of FSS the chosen districts are some 3000. In the survey, questionnaires are filled in for all

households that reach the threshold of a holding on the reference date. Questionnaires are

filled in also for new holdings that were established between the surveys and reach or exceed

the following thresholds:

A private holding uses at least:

• 1500 m2 of productive land area (including jointly or separately arable land, kitchen

garden, orchard, vineyard, meadow, pasture, forest, fish-pond, reed), or

• 500 m2 of orchards or vineyards, jointly or separately (at least 400 m

2 of fruit trees and

200 m2 of berries or vines) or

• 100 m2 of land area under cover, or

• 50 m2 of mushroom area, or

keeping at least

• one head of bigger animals, such as cattle, buffalo, pig, horse, sheep, goat, emu,

ostrich, donkey, or

• 50 heads of poultry jointly of separately, such as hens, geese, ducks, turkeys, guinea

fowls, or

• 25-25 heads of rabbits, furry animals, pigeons for slaughter, or

• 5 bee hives or

provided agricultural services during the previous 12 months.

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In case of a respondent not meeting the requirements to be considered as a holding but uses

land for crop production or keeps animals, its data should be registered on a separate sheet.

The enumerators and their work are assisted by a Field-work check-list in each survey district.

The function of check-list is to check the completeness of addresses, to update the farm

register and to provide information for arranging the payments. All addresses within each

district are printed beforehand the survey including all available and relevant information: the

names of holders and the identification code of the known agricultural holdings based on the

farm register and names of the persons received from any of the used administrative sources.

The streets within the list are arranged in alphabetical order and by increasing house numbers

in order to provide utmost support to the enumerators visiting all addresses house by house

within the boundaries of the survey district.

The task of the enumerator is to move house by house and to check whether the address is

correct and the people living there are engaged in agricultural activity or not. Any differences

to the pre-printed information have to be indicated by using codes: regarding the address (e.g.

precise address, change in the address, new address) and the function (e.g. house for living,

house used for recreation) of them.

The enumerators should also record some data of households engaged in agricultural activity

under the threshold on the Field-work check-lists. Having limited statistical information on

the agricultural activity of these units, only the productive land area, the number of chicken,

duck, geese and bee colonies are noted on the Field-work check-list.

In addition, a second selection is applied for holdings exceeding the above mentioned

threshold.

The strata of key private holdings is based on the following criteria:

150 cattle, 300 pigs, 25 horses, 500 sheep, 40 goats, 20 000 chickens, 5000 geese, 10 000

ducks, 5000 turkeys, 120 guinea fowls, 300 rabbits, 200 pigeons, 300 bee hives, 50 ostriches,

10 emu, 200 other furry animals, 250 ha arable land, 17 ha vineyard, 20 ha orchard, 100 ha

forest, 150 ha grassland.

If a private holding meets one of the criteria, it is considered as key private holding and is

observed on full scope without a sample method. The number of key private holdings is

almost 3300.

The most important development of 2016 is the use of computer devices during data

collection. Firstly in case of FSS 2016, the data of private holdings were collected with

electronic devices (tablet, laptop) without using paper questionnaires. The newly created

software will be used in the upcoming years’ agricultural statistical surveys.

The use of electronic data collection makes possible to control the quality of data during the

data collection phase. The on-line checks include the following type of checks:

Data format checks (e.g. use of decimals),

Data value checks,

Completeness checks (e.g. registration of arrived questionnaire, causes of non-

response),

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Completeness checks within the questionnaires (e.g. all identification information and

compulsory information),

Logical and arithmetical coherency within and between the tables (e.g. data on the

number of laying hens and data on eggs produced),

Routing (skip) checks (e.g. in case of no livestock skip to the next question)

The control of the data during the data collection phase resulted in a good quality of data

because questionnaires could be sent to the database after all errors corrected.

Documents were prepared in a user friendly way to make data collection easier. It includes

precise definition of items and clear instructions provided to the enumerators. It also includes

examples for filling the questionnaire. In case of electronic data collection, these possibilities

could be reached on the screen easily.

After field work data are entered into the database according to a strict procession.

Steps of data procedure and estimations in this process:

• data collection: private holdings, key private holdings and agricultural enterprises

• data validation at individual level

• by private holdings at first:

in the first phase: list of respondents – completeness check;

coherency checks within questionnaires, arithmetical control;

control of the data: by software;

main checks carried out by data entry and data processing program;

post-control.

• expert estimation, imputation.

• publication of final data:

o national level: publications, yearbooks, data sets;

o international level: EUROSTAT/eDAMIS; Data processing of livestock of

economic organisations and private holdings

After loading the actual individual data from the database into the general data processing

system, imputation is carried out: there are several holdings which refused to answer or were

not available.

Production of characteristics in case of economic organisations:

• Deletion of totals

• Production of totals again

• Production of aggregates at county level

• Production of aggregates at national level

Production of characteristics in case of private holdings:

• Deletion of totals

• Production of totals again

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• Production of data on holders

• Addition of strata

• Addition of strata in case of imputation

• Aggregation at county, strata level

Estimation method in case of private holdings

• Taking over: aggregated data from the previous table

• Loading extrapolation factors

• Estimation: based on county and strata code

• Aggregation at county level: data summed by counties, species

• Aggregation at national level: national, production of data reaching the farm threshold

1.3. Difficulties

However, there are many critical factors in this process, compelling to make an estimation on

the missing data. First of all, it is almost impossible to have the interview done with

everybody designated for a participant in the survey. Enumerators should visit at least three

times unsuccessfully a listed address to record it as failed to bring into contact with the data

provider. There are two other categories in case of a non-existing questionnaire: a building

operates for other purposes (church, high school, offices etc.) or the listed address is not

existing any more (in a renovated district for example where a new block of flats was built up

and Something Street 10. is no more interpretable).

To give a partial solution to this problem, data of holdings not covered by the survey (e.g.

refused to answer, vis major cases – illness of the holder) is imputed by expert estimation.

There is an opportunity during data procession in the data processing system (EAR system) to

impute values of missing holdings from the previously reported ones which can give a good

approximation. However, sometimes in case of private holdings and licensed agricultural

small-scale producers the production is distributed between the family members. Either the

members provide data separately in one year or for the whole family in the other time period.

Although the survey is focusing on holdings and not on producers there may be received more

questionnaire at one address or conversely, only data on one producer may be recorded.

Consequently, important information on agricultural activity will be missing in the second

case.

Expert estimations on area and production not covered by the survey are carried out by

experts of HCSO, ministries, research institutions, product councils. Expert estimates include

the following units:

private holdings not covered by the sample;

households not covered by the observation;

areas owned by foreigners and;

area cannot be assigned to a holding (e.g.: national parks, areas belonging to

Hungarian railway company (MÁV), area belonging to water management company,

to the army, to the church and other area.

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The above mentioned area – unidentifiable with holdings – works out more than 550 thousand

hectares out of the agricultural area in 2016. For the calculations of the land use balance

sheets the estimations are added up of course to summarize the area of the country. Moreover,

data of not received questionnaires in case of a proper identification is added up to the value

of private holdings and in some cases to the agricultural enterprises.

Further problem is that the database is not fully in accordance with other administrative

information like Single Area Payment Scheme and the utilised agricultural land area eligible

for subsidy, unfortunately. Farmers report more or less the same amount of agricultural land

and livestock, but it would be warmly welcomed if there were a clear correspondence between

the two dataset. Moreover, database of ARDA is sorted by the location of land in contrast to

the HCSO where the location of the enterprise or residential area of holdings is preferred in

land use statistics. Collocations between data of ARDA and HCSO can be made according to

the client’s/data provider’s name and residence/seat but the most appropriate interconnection

could be established based on the client identification number.

The basic unit in land use statistics in Hungary is the user instead of the land itself. Contrast to

the LUCAS survey, enumerators fill in questionnaires on private holdings and not on parcels

(which is common among vineyard and orchard surveys). Therefore, to find the right person

who can properly answer the questions is vitally important. Even if the farmer provides

appropriate and precise information on the utilised land the following problem is emerging:

contrast to the other administrative databases, land is reported by counties where the certain

enterprise or the habitual residence of a holding is located. Thus, rented land and area utilised

as other type of tenure is related to the county where the user is located undependable from

county borders. As a result, for example Budapest has utilised arable land of more than 36

thousand hectares in 2016.

Out of the approximately 14,000 agricultural survey districts in Hungary there are some

signed with a three-digit number beginning with 9 (Nagykőrös, a Hungarian city with its 25

thousand inhabitants, has 5 districts like this out of the total of 46. The purpose of creation

was to cover the agricultural holdings having their seats in inner areas of cities. According to

the sample, a couple of them are involved in the Farm Structure Survey as urban areas with

limited numbers of addresses but with a full scope coverage. Based on administrative

information on all of these addresses enumerators should find an existing agricultural holding.

However, it is quite common among the urban areas’ districts that the data provider is hardly

available or it cause an odd situation that hundred hectares or animals kept are located in the

centre of the capital city on the 5th

floor of a block of flats. The main problem is that

Hungarian surveys are focusing on the actual residential address or seat address instead of the

place of operation in order to avoid unavailability problems and make sure to fill in

questionnaires appropriately with a contribution of the right person. As the survey period of

the Farm Structure Survey is between 1st June and 15

th July an overlapping with the summer

holidays period is a definite hindrance. In case of vineyards for example difficulties are high

as many data providers spend the whole summer time out of the cities. Lots of people living

in the capital city of Budapest are cultivating vineyards among Lake Balaton or have some

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square meters of orchard somewhere in the countryside. Although this gap could be bridged

by changing the reference time of the survey, it would raise another group of questions.

The other problem occurs during the aggregation process. The mentioned survey system

results a disproportionately high utilised agricultural land related to Budapest.

1.4. Administrative data transfer

In order to minimise statistical reporting burden a new sample is chosen out of the total

districts of Hungary in every 3 years. As a consequence of this method, there was an

opportunity in only a few cases to compare the recent data of private holdings with their

reported data 3 years before.

Thanks to the new electronic recording program data check could be carried out not only in

the back office after the survey but real-time on the device. This allowed to exceed the needed

information: data providers should have filled in a table on changes in the utilised land area in

the last 12 months (1st June 2015 – 31th May 2016). For private holdings the online

connection ensured a real-time check and error message whether the last year’s values are

exceeded plus or minus 20% and the changed is not reported by land use type and reasons.

For example, due to the termination of a land leasing contract the utilised arable land

decreased by 25% but there is no record on this fact: an acceptable warning message appeared

in case there is a mistake in the conjunction. Unfortunately due to the sample methodology

the overlapping between the previous data providers and the actually assigned in 2016 are

relatively low.

Bridging this gap, data of land users receiving SAPS payments was uploaded based on the

agreement between the HCSO and ARDA on data transmission. With due regard to

appropriate confidentiality requirements, data providers should have accounted with land used

on 1 June or the changes in the last year by which they are authorised for subsidy payment in

2015. To run this checking process client names and identification numbers should have been

given by the data providers at the beginning of the questionnaire. Matching in the background

of the program facilitated significantly the ex-post controls, namely, the real-time feedback

enabled to correct or complement the data without any interviews by telephone.

In the framework of the agreement the HCSO takes over data on the amount of claimed and

approved SAPS subsidies by titles, counties and type of client and on the eligible areas by

title, county, type of client and land use type from ARDA by 31 July. This information also

provides assistance for the estimation on data providers have not sent questionnaire in time or

it could be even suitable for imputation. Data on total support in a given year including

number and area is sent to the statistical office by 15 November every year.

In the long term, the aim is to unify and standardize databases of separate institutions and

offices on the same topic. The problem is that in spite of the fact that data is collected in the

proper quality, details and time period, different databases cannot be linked. One reason for

example is, that data on land area.

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2. Fruit and wine plantation statistics

In recent years, the use of administrative sources regarding fruit and wine statistics in

Hungary was developed depending on the obligations imposed by regulation No. 1337/ 2011

of the European Parliament and the Council. The grape and fruit growing economic branches

have different characteristics from each other in the Hungarian agriculture regarding official

regulations and commodity production conditions. For this reason the available administrative

sources provide different possibility in terms of using them for statistical purposes that is why

will be described in separate points.

2.1. Use of administrative sources in case of fruit plantation statistics

After the political changes in Hungary the socialist type, state-run collective farms ceased to

exist and market producers of fruits to gain better market positions formed producer’s

organizations (TÉSZ) on a voluntary basis. The activities of these organizations are supported

by the Hungarian Interprofessional Organization for Fruit and Vegetable (Fruitveb) at national

level. Producers are not obliged to carry out fruit growing activity only as a member of TÉSZ

based on legal regulations. Thus there is no unified register available yet at national level

regarding the condition of plantations and economic activity related. Fruit cadastre is not

available. Therefore, there is no administrative source available for the production of

statistical data and for providing it to Eurostat. The HCSO implemented a census in 2001 and

then in 2007 and in 2012 carried out sample surveys in order to observe the condition of fruit

plantations for market production. Again, in 2017 a survey will be implemented with

methodological changes compared to the previous surveys.

During the surveys mentioned above the data collection was carried out by visiting fruit

plantation on the production area. Connected to these surveys administrative data also was

transmitted to the HCSO. These data were mainly used in the preparation phase as additional

information to establish the data collection and were not used directly as statistical data. We

can talk in this respect about the use of administrative data for statistical purposes.

When the sampling design was planned, changes took place regarding the area of market

plantations after the census 2001 by 2007 and by 2012 had to be examined in line with the

professional and legal requirements in order to ensure appropriate coverage. The cessation of

plantations beforehand was detected by enumerators during the survey on the field.

However, it had to be ensured that information on plantations newly installed since 2001 and

since 2007 be available for the development of the sampling design and for the enumerators to

determine geographical location of the plantations.

This could be solved by using the available administrative source regarding new plantations

which is obligatory to report by producers. In addition, to the visualization of geographic

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location of all – not only newly planted – plantations on topographical maps (provided to

enumerators) on the basis of unique plot number it was necessary to take over administrative

data.

Based on paragraph 59 of Act CXXIX in 2007 on the protection of productive land area in

Hungary as well as Government Decree 314/2007 (21.09) regarding designation authority on

installation of fruit plantations; plantations with area larger than 1500 m2 and berry

plantations with area more than 500 m2 can be newly planted only based on permission. The

permission must be requested with the appropriate form developed for this purpose

The application shall be accompanied by the following attachments:

1. copy of the Land Registry title deed registered in the property register

2. certificate on the ecological suitability of production area (Obtainable e.g.:

Research Institute of Fruit and Ornamental Crops)

3. opinion of Product Council on the plantation plan (Obtainable: Vegetable & Fruit

Product Board)

The following information is available to the HCSO included in the above mentioned

administrative sources:

In case of fruit plantations planted after 2001

year of plantation

fruit species planted

area of plantation in hectares

geographical location of the plantation (lot number)

geographical map where the plantation indicated by a point

The same information regarding the plantations observed in 2001 was obtained from the

database of HCSO. The plantations were indicated as a point on the map defined by

geographical coordinates based on unique plot numbers by HCSO.

In addition, within the framework of data transfer to HCSO, data on newly installed fruit

plantations as well as data on area based support managed by the ARDA were available.

During the preparation of the sample design these data could be used with respect to fruit

species, area and geographical location.

The assistance of FruitVeB regarding the development of data transfer of MA and ARDA to

the HCSO was very useful.

Taking into account the evaluation of surveys carried out in 2007 and 2012 and the changes of

17 years taken place from the 2001 year census, a plan was developed by now for the

implementation of the survey 2017 which is planned to be carried out applying a new

methodology in order to ensure the quality of data. In addition, the government side also

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raised a strong demand that the 2017 sample survey should be implemented in a wider

content:

Key features of the changes:

In addition to the four fruit species mandatory to collect data according to the EU

legislation, the main (or more important) fruit species of the Hungarian market may

also be observed;

Regarding these fruit plantations it became necessary to carry out a census again after

2001year one;

Data regarding the plantations should be collected from the farmers by visiting them;

Determination of the survey population should be based on the administrative registers

of the ARDA. Based on the preliminary analysis the observation of plantations users

with more than 2000 m2 area would ensure the full coverage of market producers in

line with the legal requirements;

The following information is planned to be transferred to HCSO: identification data of

plantation users (name of private person, name of organization, address, ARDA

registration number); registered characteristics of plantations (species, size of area,

geographical location (settlement, unique parcel lot number).

2.2. Use of administrative sources in case of fruit and wine plantation statistics

Grape growing, wine production, marketing of wine gained increasing attention within the

government-level decision-making since it’s economic significance and impact on tourism in

Hungary. The leaders of the Wine-Growing Community established in 1994 and already been

operated during the accession of Hungary to the European Union, provides professional,

regulatory supervision over wine-producing settlements joined into the Wine Community.

The National Council of Wine Communities (HNT) operates as the central organization of

this network. Its administrative functions got emphasis in 2014 when the Government

acknowledged it as an interbranch organization. Previously HNT supervised and later after the

development of the centralized computer records operates the Wine Community Information

and Data Supply System (HEGYIR).

As a result of the forward-thinking design and successful technical cooperation between the

interested organizations, this system exists as a wine cadastre from the beginning and includes

information from which after processing adequate quality of data can be transmitted to the

EU. In 2009 farmers involved in wine marketing outside wine growing regions were not

obliged to register and to report any data to the system. That is why besides taking over and

processing data from HEGYIR, regarding plantations outside wine production areas HCSO

collected data by implementing a sample survey in order to ensure the required coverage.

The following two Acts contain the important regulations regarding viticulture, wine

production and marketing of wine:

Act XVIII./2004 on viticulture and wine production;

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Act CCXIX/2012 on wine communities.

By 2015, following the changes in legislation HEGYIR contains information on all grape

plantations in Hungary which area is minimum 1500 m2 or from which wine is sold even if

the area is situated settlements outside the wine-growing regions. Following this change the

statistical data regarding vineyards according to EU regulation 1337/2011 could be provided

without implementation of a survey only on the basis of HAGYIR data.

HCSO meanwhile has developed an online system (KARÁT) for sending and receiving data

which can be used by external reporting entities that are involved in data transmission of

administrative data to HCSO. After registration they can send data electronically directly

without using an external drive, through a closed network, from their database to HCSO

computer center meeting with the highest level of data security requirements. The system

immediately runs certain pre-configured, pre-tested control rules in order to check that data

are suitable for further processing in HCSO. After that the sender receives feedback on the

successfulness of the data sent.

The implementation of 2015 year survey has already been started with the data transmission

operation to HCSO. This was the first data transmission among the large data bases provided

to HCSO within KARÁT and contained more than 130 thousand records. It was also the first

time when the software developed for the preparation of big data processing (ADAMES) was

run by the central computers.

The HEGYIR IT systems are going through significant development nowadays and according

to the plans will meet even greater requirements by 2017. A part of the development is

connected to the transmission of data.

In case of statistical observation of areas under vines the EU's wine classification rules

already adapted by Hungary has also taken into account, during which the quality of a wine

have to be marketed marked in line with PDO – PGI – NP classification rules. By 2016

product level legislative specifications has already been completed for all wine growing

regions in Hungary, under which the leaders of the Wine Growers’ Community carry out wine

qualification. So the HEGYIR database could be expanded with information about the parcel,

i.e. what quality of wine could be produced. So far (even in 2015) this feature of plantations

under vines was modelled during the statistical processing of data connected to the

geographical location (wine growing area/not wine growing area). It is expected that in the

future vine plantation cadastre will contain precise information about it and this topic can be

covered by statistical data transmission.

HCSO and the National Council of Wine Communities will continue the professional

cooperation (as earlier) regarding the development of the registers maintained by the Wine

Communities.

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3. Use of pesticides

In March 2014 an agreement was signed between HCSO, MA and NFCSO in order to

implement the survey on use of pesticides. Based on this agreement HCSO was responsible

for the data collection of the agricultural enterprises. The ELEKRA system was used by the

respondents for this purpose.

The situation was more complex in case of private holdings. ARDA was asked by the MA for

the list of the farmers receiving subsidies for the crops concerned (winter wheat, corn,

sunflower, rape seed, grape and apple). The received list was the basis of the sample selection

with the responsibility of the HCSO. Finally ca. 10 thousand respondents were selected, and

the NFCSO was collected the farmer’s report on pesticide-use under the related national

regulations. The data delivery was obligatory for the selected respondents. The received

individual data were transferred to the HCSO, and the grossing up was the task of the

Statistical Office. The efficiency and the reduction of cost were perfectly completed with this

agreement, and using administrative source instead of statistical survey could be done as well.

4. Farm Register

The Farm Register includes data on agricultural enterprises and private holdings. Based on the

surveys of HCSO and on administrative sources originated from administrative procedures

related to agricultural activity it contains the following information on agricultural enterprises

and private holdings: identification codes, name, address, size category, type of agricultural

activities.

The Farm Register records the population and target population of agricultural statistical

surveys. Enterprises have 8 digit identification codes in the Farm Register. In case of

enterprises the 8 digit code agrees with the tax number, in case of private holdings the

identification code is developed for statistical purposes. An agricultural holding can carry out

one or more agricultural activity (uses land area, carry out crop, livestock production, game

farming, or agricultural services). Agricultural activity is recorded by the code of activity

group (MKÓD). Agricultural activity of the holding appears at local kind of unit level,

however agricultural activity can be carried out in more than one premises (statistical

observation do not cover premises level). Agricultural activity of the holding registered in the

Farm Register is based on statistical and administrative data sources. Agricultural activity of

the unit can be deleted from the Farm Register based on individual judgement after written

request provided by the enterprise.

HCSO takes over administrative data from the NFCSO and from the ARDA.

HCSO takes over data of the System for the identification and registration of bovine animals

from NFCSO three times a year (Unified registration and identification system: within this

bovine stock is recorded).

Likewise HCSO takes over data once a year from NFCSO the list regarding licenced

hatcheries registered within the Poultry registration and identification system (BIR)

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New data suppliers identified based on these lists are added to the Agricultural Register and

based on this information (ENAR: key individual farms) (BIR: Hatcheries) the range of data

providers are expanded.

HCSO takes over twice a year data on agricultural and rural development support from the

ARDA. As in the previous two cases are compared to the population of the Agricultural

Register and those are missing recorded. The number of key farms is completed with these

holdings - land and sown area.

In the future HCSO would like to include the registration number of the Rural Development

Office in the Agricultural Register in order to facilitate the identification and connection of

data providers.

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V. Improvement of the internal data flow

As it has already become obvious, the cooperation between HCSO and ARDA is nothing

new, HCSO regularly asked the Agency for data, which requests were managed and fulfilled

on an individual basis, as ad hoc data requirements. This meant that the data requirement was

assigned to the competent professional organizational unit within the Agency, which unit then

interpreted and answered them. The advantage of the above system of data supply was that

the question was always assigned to the most competent respondent but its drawbacks also

soon manifested themselves. The unclear interpretation of the data, primarily regarding the

purpose of their use, meant difficulties, furthermore, it was a major source of errors that

misunderstandings were rather frequent, due to the lack of a clearly defined terminology.

The several years of cooperation had three main phases, which were built on each other but

are well separable from a quality point of view as well:

1. During the organized joint efforts that have been taken since 2008, coordination and

clarification meetings on the individual data requirements were held regularly, which

took place on an ad hoc basis depending on the individual data requirements, during

which fundamental issues were clarified.

In this period, the framework for data supply was defined by the relevant laws, and its

content was regulated by the data requirements and the coordination.

2. In late 2013, as a result of the ad hoc type of work, the need came up for the signing of

an agreement between the two organizations. In this agreement, the data structure to

be delivered, the exact deadlines and the responsible entities were specified in detail.

The data requirement, the exact timing and the mode of delivery have been regulated

by a cooperation agreement since May 2014, within the statutory framework,

cooperation takes place through the contact persons specified in the agreement, which

ensures the filtering out of misunderstandings and redundancies.

3. In 2015, in the context of this project, the fine-tuning was done, as a result of which

the thematic attachments of the cooperation agreement were revised, supplemented

and clarified. As part of the project, besides the daily tasks, such data utilization and

data collection options which may prove to be critical for future cooperation and

which will also determine the direction of progress were also discussed.

The issues clarified and the measures introduced during the joint project were as follows:

In order for HCSO to receive appropriate information on the aid structure of the year

in question, ARDA delivers to HCSO the list of the legal titles of support that were

valid in the preceding year, along with the data that clearly identify these, at the

beginning of each January. The list contains all the legal references, be they

Hungarian or those of the Commission, regulating the type of aid in question, the

communications and information materials issued on the topic, based on which data

HCSO will get a full view of the current composition of agricultural aids, and can

plan their data collection activities with a high level of accuracy. The list is compiled

and validated by ARDA’s legal department.

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As a result of this, it cannot happen during the preparation of the agricultural censuses

that HCSO defines an unnecessary data requirement either for the Hungarian system

of institutions or for the farmers affected by these aids, neither can it happen that

supplementary designation should be applied due to the data deficiency generated in

such a way.

The data flow between HCSO and ARDA has become bi-directional, i.e. the

specification of data has become so much more accurate that it became possible to

request the data based on lists. For this, in order to clarify ARDA’s client register and

to provide data support for the queries, HCSO delivers the data of the clients on VAT

status, profiles and the forms of farming to ARDA by client lines (VAT codes,

TEÁOR, (unified sectoral classification system of economic activities) codes, GFO,

i.e. legal status codes).

The individual aid data should be supplied by using the accrual or the cash flow

method, in order to ensure consistency and comparability with the available budgetary

macro-data – regarding this issue, the individual departments of HCSO required the

data in different approaches, so these data requirements could not be met

automatically, by following the routine procedures.

It was established that, as a result of the detail of the accounts and the accurate

requirements of accounting settlement with the Commission and the Hungarian state

budget, the data generated by using the cash flow method are the ones that come in

the most up-to-date form and in a more detailed structure. This scope of data contains

the data of the actually implemented projects, according to the final budgetary

settlement categories (ABB (Activity Based Budget) codes or AHT (public finance)

codes). Based on the above, it was concluded that it is the verified and closed

payment data equivalent to the budget data that are the most suitable for the

preparation of detailed analyses.

During the review of the data requirement, we strove to ensure that an as large as

possible scope of the agricultural players that establish contact with ARDA be

identified and through this, included in the statistical database. The data requirement

of HCSO’s preparation of the agricultural censuses was supplemented by the block-

and parcel-based identification that serves as the basis of area-based support, as well

as the data on utilization. During the specification, we took it into account that the

data supply should not only be realized among the farmers eligible for support, whose

data contents have already been verified by ARDA but all the applicants should be

involved in the data supply, even those who are filtered out in the meantime.

During investigating into the earliest availability of data and the comparison with

HCSO’s professional delivery deadlines, an exact solution regarding the timing of the

data supplies was arrived at. However, problems which could not be solved by simple

timing were also identified, the handling of which required a different solution. The

use of an earlier version of the data was such a solution, or the use of the application

data rather than the processed data during sampling, as well as the application of the

solution of two-step selection through supplementary designation.

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Besides the clarification of the above issues and the incorporation of the solutions, a higher-

level solution of a now two-way data flow between the two organizations was created and was

installed without problems: the data are no longer sent by electronic correspondence but they

are now uploaded to and then downloaded from the Office Share Point Server. Thus, the

processes can be monitored, the system sends prompt notices on the data changes, and the

data files themselves are less vulnerable. Unfortunately, the introduction of a higher level

connection between the individual computers is not something that will shortly happen, on the

one hand because the queries and the verifications still frequently require manual efforts, and

on the other hand, this situation exists because of the continuous development of ARDA’s

ICT systems and the preferences that are valid there.

Of course, some issues whose solution is not yet outlined for the time being have also

emerged: these include, e.g. the following:

1. In the case of pig and poultry animal welfare support, it is not the breeder who is the

ultimate beneficiary but the veterinary surgeon who provides the services, through

subsidizing the animal health products that they use. A more accurate investigation

into the issue and the definition of the ideal mode of data collection are still missing in

this case.

2. In the case of area-based support, the area of land owned and cultivated by the farmer,

i.e. the use of land in question cannot be clearly identified during the respective

statistical data collection. Unfortunately, this problem can only be remedied if HCSO

gets prepared for the handling of certain geoinformatic issues, as identification can

exclusively be resolved by block-level data. The solution of the problem is made even

more difficult by the fact that the management of these data already requires increased

attention because the support information related to the block data in question, even

the data on application qualify as sensitive support data.

3. In some cases, ARDA’s own database is not sufficient for the satisfaction of the highly

detailed data requirements defined by HCSO. In several cases, especially in the case of

livestock-based support, the agro diary, kept as a result of an obligatory requirement,

contains useful data. In this regard, the electronic form, and thus, the extractability of

the data, which was introduced a few years ago, may mean a major breakthrough.

However, it should be considered from the perspective of HCSO whether the scope of

those farmers who are obliged to keep an electronic agro diary is sufficient for them,

and also, whether the extension of this obligation is the right way for collecting the

necessary data, i.e. whether or not the extension of this requirement to further farmers

involves too excessive burden.

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However, there are some good practises to be mentioned for the negotiation between the two

organisations:

1. Making a clear definition of fallow land

The essential characteristic of fallow land is that it is left to recover, normally for the whole of

a crop year.

Fallow land may be:

bare land bearing no crops at all;

land with spontaneous natural growth, which may be used as feed or ploughed in;

land sown exclusively for the production of green manure (green fallow).

In land use statistics, fallow land is part of the unsown area (i.e. belongs to the arable land)

which is not in use in the current economic year for any reason like land use change,

melioration, flood, drought or being set-aside. The phenomenon of set-aside land is to be

linked to the aid schemes.

Fallow land and set-aside land is similar in meaning because in order to receive payment on

these set-aside entitlements, an equivalent number of hectares had to be removed from

agricultural production. Therefore, set-aside land was shown to be an effective way to

improve soil chemistry and increase biodiversity on arable farmland, especially on 5-year

non-rotational set-aside. However, the difference between the two concepts is that set-aside is

related to the compulsory requirement for the entitlement and payment itself. The plantation

of certain kind of crops on these areas is allowed. On the contrary, fallow land is a surface

which is actually not covered with plants for the whole vegetation period but are parts of the

crop rotation system, while grazing and land cultivation is only allowed.

This somehow similar approach causes an ambiguous situation among data providers as they

consider fallow land as unutilised sometimes. Fallow land, however, is not to be confused

with neither set-aside land nor unutilised agricultural area which is out of the crop rotation. In

order to have a clear view on the actual size of these categories and have a consistent database

with the SAPS payments, an urgent need for distinction has emerged. The confusing word of

‘parlag’ (in English can be translated as abandoned bare fallow) has been left out from the

questionnaire.

2. Organic farming data in the FSS

The organic farming register, mainly maintained by Biokontroll Hungária Nonprofit KFT.,

covers the majority of the organic farms in Hungary (about 95% of the certified production).

Data on the remaining data of organic farms (5%) are maintained by the Hungária ÖKO

Garancia KFT. The link between the organic farm register and the holdings surveyed is

created by the following way:

Matching statistical ID Code in case of the agricultural enterprises;

Matching IACS block identifiers. Some respondent did not provided this data in FSS

2013 questionnaire;

Matching organic producer ID code. Some respondent did not provided this data in

FSS 2013 questionnaire;

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Matching name and address in case of the private holdings where IACS block

identifiers were not available. In this case some manual work was needed;

The reference period of the organic farming register is not comply with the reference period

of the farm structure survey. On the contrary, it is updated continuously.

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VI. Summary

An especially efficient working relationship has been maintained between the staff of the

HCSO as one of the largest data recipients and ARDA, which is proven by both the

Cooperation Agreement on data delivery and the current joint research project. During the

joint work activities, exactly because in the matters of ARDA, “one has to be able to ask good

questions”, a successful practice of holding a consultation session was introduced before each

data request, during which the goal of utilization and the available scope of data and data

structure are clarified. By doing so, the data requirements can be defined in an optimized way,

i.e. it is the data that are available or can be generated with the least possible effort that

ARDA send by a realistic deadline and which suits the needs of HCSO, furthermore, HCSO

will receive data whose content and meaning are accurately defined in advance.

During our joint work, a special data requirement has emerged several times. This means such

a data requirement which reaches beyond the forms of support taken in the strict sense of the

word, e.g. it includes data on support related to animals or crops, independent from funds or

resources, or the location of the land areas of a farmer registered in a specific settlement

(beyond the border of the county, etc.), so it involves a new basis for the grouping of ARDA

data, it generates a new database organization task.

The joint project continued from the autumn of 2015 on the basis of the invitation of the

Eurostat tender, its goal being the review of the options of utilizing the Client Register kept by

ARDA and the data of the applications for support for statistical purposes, in the context of

which the data structures and contents, the options of utilizing them for statistical purposes,

their links to other databases, as well as the concept of a potential future development are

reviewed.

1. Expert responsibilities

The role of ARDA in the agricultural subsidy system as an external expert in the first phase is

described in Grant Agreement No. 08414.2013.001-2013.459 concluded by and between

HCSO and Eurostat on November 29, 2013 and amended on November 06, 2015, i.e.

the entire process of applying for grants was reviewed and presented and a description

of the related and supplementary partial processes was prepared, from submission to

reaching the final status

the concepts, deadlines and the availability of data used for the detailed data structure

of the Integrated Administration and Control System (hereinafter referred to as: IACS)

for the period between 2007 and 2013 were explained

the tasks related to the development of IACS between 2014 and 2020 were presented

In the second phase of the expert activities,

the data content of the records of agricultural grants managed by ARDA was

described, along with the rules for the individual registers of the applicants for support

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the data stored in the registers required by the law stipulating the responsibilities of

ARDA were compared to the data requirements of HCSO for the compilation of the

statistical statements on agricultural activities

In the third phase of the job, those target areas where that progress is possible, as well as

where proposals could be made or take actions for achieving such progress, were highlighted

and assessed.

2. Evaluation

2.1. ARDA’s data assets

Since its inception in 2003, the ARDA has accumulated considerable data assets in the course

of pursuing its primary activity, related to the utilization of which there are significant claims

not only from the part of the agency but also from the part of the players of the profession.

However, during the delivery and understanding of the data, it was soon proven that in order

to be able to appropriately utilize this enormous data set, the appropriate and in-depth

knowledge of the conditions of data generation and the support processes is necessary, i.e. the

data should be easy to turn into meaningful and analysable information.

The other important and immediately visible feature of the database is that the scope of data

managed by ARDA refers exclusively to the farmers and farming entities that use the grants,

furthermore, it is only available for the application for, the disbursement and use of such

grants, i.e.

on the one hand, certain data and information on supported farmers related to the

support data are not automatically available, they should be requested specifically, or

obtained from other databases,

on the other hand, the data portfolio is generated exclusively for the scope of the

supported persons or entities, a control database of equivalent structure on the players

of agriculture who are periodically or entirely missing from this scope is not available.

Furthermore, during the utilization of the data, it became clear that the expectations of

professional management, the national statistical body, as well as the Commission and

Eurostat alike require a reporting background and a continuous background of analysis that

meet complex query aspects based on a complex, tiered and consistent database, where the

need for appropriate queries, reports and mainly analyses has outstanding priority.

In its current form and by simple queries, ARDA’s data assets can now properly meet the

needs of organizational controlling and mandatory reports. As regards the comparability of

the data, the current status allows almost exclusively the breakdown / aggregation of the

payments by beneficiaries, legal titles and periods, meeting any further reporting or analysis

needs means processing tasks of varying magnitude. As a result of all this, in the fulfilment of

ARDA’s external reporting and data supply responsibilities, as well as in the participation of

professional analyses, such requirements emerged in the course of using the Agency’s data

from time to time which create the need for establishing data connections between the larger

systems and databases and although they point beyond the Agency’s responsibilities, they

cannot do without ARDA’s participation, due to the information and legal title knowledge

that is accumulating here.

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Thus, it is an important condition of the usability of the database that the data recipient and

future analyst or evaluator should exactly know

the date of the availability of the data – first, earliest availability,

the accuracy of the data – the definition and availability of the data status which they

can appropriately use for their analyses

the potential errors of the data – whether they need approximate, verified or validated

data

the source of supplementary information– the possibilities of obtaining control

databases, supplementary databases or data

the connection of the data to the supplementary data – connectivity, the system of ID’s

that allows connection, the time aspects of the availability of the different data

portfolios.

When investigating into the potential uses of the data, a problem arising from the changes in

ownership relations and tenure was disclosed, specifically, the frequent changes in the owners

of the individual land parcels pose problems. As opposed to the economic associations, where

the changes affecting the rental relationship are balanced and easy to follow, in the case of

natural person owners and family farms, there are changes of a very significant extent, which

primarily arise from inheritance, and which often involve the fragmentation of the individual

land parcels, or in the case of heirs who earlier received support, the consolidation of the

individual land areas that were previously managed separately. The monitoring of changes is

made even more difficult by the fact that in the case of new owners / heirs, the entitlement to

the grant is reassessed by ARDA, so in the case of unentitled heirs, the land area in question

will be removed from the scope of the reviews for a longer time. The performance of the

analyses that encompass longer periods is also made difficult by the Hungarian characteristic

that the individual farmers regularly optimize their tax burdens as a result of the complex tax

laws and they recognize the acquisition of the individual income elements in a form that best

serves this endeavour (sole trader, family farm, licensed traditional small-scale producer).

2.2. Summary of data supply responsibilities related to the Hungarian Central

Statistical Office

There is a well-established, well-functioning institutional cooperation based on regular

professional coordination between the two organizations. In order to solve the previous data

demand and interpretation anomalies, in November 2008, the chairman of ARDA,

coordinated by SZKF, received the deputy president and some executives of HCSO at a

personal meeting in order to develop the system of cooperation and data supply. Then in

December 2008, an expert meeting was held between the heads of the professional

organizational units of HCSO and ARDA, respectively, where the data requirements of

HCSO were clarified.

1. Statutory background of data supply – provisions on individual identification and zero

rating:

Act XLVI of 1993 on Statistics: according to Section 8(2), any and all natural persons and

legal entities, as well as organizations without a legal entity are obliged to supply data

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Act XVII of 2007 on certain issues of procedures in relation to support for agricultural, rural

development and fisheries and to other measures: Section 23(4) The client-related support

data, which are related to farming, the utilization of soil, animal husbandry, forest

management, the storage and processing of agricultural products, as well as other agricultural

activities, or fishery, are delivered by the body responsible for agricultural and rural

development to the Central Statistical Office of Hungary in a way that is unsuitable for

individual identification, while the data related to the amounts and utilization of the support

are delivered free of charge, as aggregated data, for statistical purposes to the same Statistical

Office. The data delivery obligation can only be fulfilled on the basis of a written inquiry and

to the extent necessary for the performance of the legal responsibilities of the Hungarian

Central Statistical Office.

Act CXII of 2011 on the Right of Informational Self-Determination and on Freedom of

Information: According to Section 13(1), “the personal data handled as part of mandatory data

management, unless it is otherwise provided by the law, can be accepted by the Central

Statistical Office of Hungary for statistical purposes, in a way suitable for individual

identification, and such data can be handled by this Office as stipulated by law.”

A specific law on the individual data collection programs will be adopted.

2. Data supply provided on the basis of laws

a) Data provided for the Agricultural Account System – free of charge according to the law

Its implementation is made mandatory in the member states by regulation (EC) No. 138/2004

of the European Parliament and of the Council on the economic accounts for agriculture in the

Community. The Agency provides data three times a year:

in January –preliminary data on the agricultural payments and support data of the

preceding year in a breakdown by county and client type

in July – final data on the agricultural payments and support data of the preceding year

in a breakdown by county and client type

in November – preliminary and plan data on the agricultural payments of the current

year in a breakdown by county and client type, as well as on the support data by legal

titles

The data supply provided for the economic accounts for agriculture contains aggregated data,

and ARDA supplies them free of charge in compliance with the provisions set out in Section

23 of Act XVII of 2007.

b) Data supplied for the survey of basic and representative farm structures –no zero rating is

stipulated by law

Its implementation is made mandatory in the member states by regulation (EC) No.

1166/2008 (November 19, 2008) of the European Parliament and of the Council on farm

structure surveys and the survey on agricultural production methods and repealing Council

Regulation (EEC) No. 571/88.

The system consists of correlated data entries: the ten-yearly agricultural censuses (AC) as

well as the representative farm structure surveys (FSS) repeated every 2 or 3 years in the

interim period.

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We supplied the following data for AC (based on Section 5 of Act XXIV of 2010 on the AC

2010):

the users of area payment for 2008,

the total area used by the recipients of area payments in 2010, which are entitled to

support, more specifically, the economically unutilized fallow land and unutilized

grass area, as well as the land used for producing energy crops, in hectare

data on the rural development grants used between 2008 and 2010 by legal titles

The implementation of the FSS 2007 was regulated by government decree No. 229/2006 on

the Data Collections and Data Acceptances under the National Statistical Data Collection

Program (this law lost effect when government decree No. 288/2009 was adopted). The next

AC takes place in 2020, while the implementation of the FSS 2016 is in progress.

c) Data supplied for the National Statistical Data Collection Program –no zero rating is

stipulated by law

The data are supplied on the basis of the provisions set out in government decree No.

288/2009 (XII. 15.) on the Data Collections and Data Acceptances under the National

Statistical Data Collection Program. The data supply is mandatory by law, while the rejection

of data supply, the communication of untruthful data, as well as delayed data supply will

involve a criminal or infringement procedure.

d) Data supplied for the statistical assessment of fruit plantations, as well as areas planted

with fruit trees not reaching the size of a plantation – no zero rating is stipulated by law

Its implementation is made mandatory by Act XLVIII of 2006 on the survey of fruit

plantations, as well as areas planted with fruit trees not reaching the size of a plantation. The

census should be performed by HCSO every five years.

The preparation of the regular data supplies of HCSO is supported by the HCSO query

platform of the IACS Database, which was developed in 2009.

3. Trends and tendencies in the regulation of statistical data collection

The transformation of the regulation of the operation of the European statistical system for the

future processing of the data obtainable from administrative sources for statistical purposes, as

well as for the reduction of the administrative burdens of businesses is in progress. The tasks

defined on the basis of the goals outlined by the HCSO National Statistical Council (Section

7, Act XLVI of 1993) are as follows:

the transposition of regulation (EU) No. 223/2009 into the Hungarian law

ensuring zero rating

liaising and cooperation with the managers of the registers

HCSO should also join the “mid-term government program called Lean State on

reducing the administrative expenses of entrepreneurs”

establishment of a single data asset system and database, the elaboration of the related

rules

mapping of data sources besides the statistical and administrative data sources

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mapping of all the relevant laws and the review of sectoral laws to prevent that the

provisions thereof hinder the acceptance of the data for statistical purposes

The coordination role of the member state statistical offices is becoming stronger, however,

those operators of the administrative registers who are not members of the statistical services

are not subject to the coordination of the national statistical offices but the relations and the

cooperation should be strengthened.

The target areas of progress, proposals

1. target area: ARDA’s statistical data supply system

ARDA’s statistical data supply responsibilities are appropriately regulated by the statutory

background and the bilateral agreement. In the framework of the cooperation agreement

entered into between HCSO and ARDA, the data are supplied bilaterally. The parties

regularly check the data supplies provided to each other, as a result of which the review and

amendment of the cooperation agreement are regular and up-to-date.

Proposal: The staff of the two institutions should disclose the new points of connection in the

context of cooperation using the practice applied until then, based on which the cooperation

between the two organizations can be extended and improved, and the administrative burdens

of the farmers and the institutions can be reduced.

2. target area: development of a single and complete database

Based on the comparisons described above, it was concluded that the data available for the

legal titles managed by ARDA do not cover the total multitude of farmers, since ARDA only

has data on its supported clients, it has no overview of the control database. Examining the

entirety of the data, it was also concluded that in the course of executing the individual legal

titles, the data relevant for the legal title are available after closing the period for the

submission of the application (requested data), as well as after the closing of the support

decision (supported data).

As a result of the standardization and harmonization process, in the agricultural survey, the

majority of data on farming in the case of farmers may be available from the

applications/tenders submitted by the farmers, as well as supported and paid, and also, as a

result of the connection of the one-time ID’s of the records required by further laws, creating

a single database.

In a single database, it would become possible that the following data are accessible when a

farmer is selected:

core client data (Farmers’ register)

the data of the applications filed by the client, the ones supported and paid (IACS)

the size of the area owned by the client (own, rented)

the client’s data portfolio (ENAR, i.e. the Uniform Registration and Identification

System)

the client’s financial and employment data (NAV, i.e. the National Tax and Customs

Administration)

the data of the agro diary

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This database would not only be able to satisfy the needs related to statistical data supply but

it would at the same time decrease the amount of data to be supplied by the applicant in the

case of assessing other agricultural aids.

Proposal: When the single database is developed, the professional organizations should be

contacted in order for them to be able to indicate when the available data do not mean the

entire multitude, in the case of databases kept on the basis of the existing laws. As a result of

this, it can be examined in what form and with what content the data kept in the

organization’s own registers can be incorporated. It is important that in the case of such

special subsidies where ARDA only possesses data on the entities which have submitted the

application for support (e.g. beekeeping), the data of the entire sector would be accessible

from the professional organization’s own registers.

Proposal: In the building of the database, we propose that it should be examined in what

form and with what content the Hungarian Chamber of Agriculture (HCA) could take part in

the process. Pursuant to the currently valid regulation, each farmer should mandatorily be a

member of the chamber, furthermore, the chamber keeps the records of the licensed

traditional small-scale producers and they issue the certificates for such producers.

3. target area: the statutory background

When the data requirements and the available data were compared, it could be concluded that

there were conceptual and content-related differences in the case of the laws that govern

implementation, which make it difficult to achieve equivalent interpretation and hinder

comparability.

Proposal: The indication of the disclosed content-related differences to the legislators may

involve that in the context of the regulation on legal titles, it is not only the data necessary for

the assessment of the application that are asked to be submitted but also, the data necessary

for agricultural statistical data supply can also be requested, so these data become collectible

and deliverable to HCSO. As a result of such measure, the data supply burden of the

beneficiaries will substantially decrease.

Proposal: It is necessary to develop the statutory background for the establishment of the

single database, in order to ensure that the elementary core data required for the individual

statistical calculation are available and different statistical calculations can be performed from

the available elementary data. Furthermore, the data supply obligation of the client should

decrease.

4. target area: the utilization of the experience and database of the evaluation systems

The CAP planning period of 2014-2020 poses new challenges for the executive institutions.

Commission Implementing Regulation (EU) No. 834/2014 laying down rules for the

application of the common monitoring and evaluation framework of the common agricultural

policy creates the possibility that the data to be collected on the member state level be suitable

for harmonization and standardization in the case of the agricultural and rural development

resources provided by the Commission.

Regarding the rural development programs, starting from the disbursement of pre-accession

funds, Commission Implementing Regulation (EU) No. 808/2014 requires, furthermore, the

application of the Common Monitoring and Evaluation Framework, i.e. CMEF, which is

further developed by each programming period. CMEF describes the starting statuses and

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target values of the individual legal titles and actions by using mandatory and selected

indicators, which are defined as early as in the Program. In the reports, the monitoring of the

achievement of the goals is expected. The data required by CMEF are currently requested on

the project level, from the clients. It is a key requirement from the development of the current

information systems that appropriate information can be extracted on the implementation of

the program, on the progress of application management, control and payment processes, on

the area and time dimensions thereof, on the composition of clients, etc.

Other factors influencing the data utilization processes

In the 85. issue of the Hungarian Bulletin of June 13, 2016, government resolution No.

1312/2016 (VI. 13.) on the measures related to the supervision of the state agencies and the

ministerial background institutions operating as budgetary organizations was published.

According to the government resolution, the Agricultural and Rural Development Agency

controlled by the Ministry of Agriculture will terminate its operation with legal succession on

January 1, 2017. The resolution says the following:

the paying agency activity of ARDA should be performed by the Hungarian State

Treasury, while its other responsibilities with regard to the EAFRD, should be fulfilled

by the minister responsible for agrarian and rural development, and with regard to the

EAGF, by the minister responsible for agrarian policy;

the county sub-offices of ARDA will be integrated into the Budapest and county

government offices by adding that as regards the responsibilities that they fulfil, the

professional management powers with regard to EAFRD will be exercised by the

minister responsible for agrarian and rural development, while these powers with

regard to EAGF and the national subsidies will be exercised by the minister

responsible for agrarian policy;

regarding EAFRD, the managing authority and paying authority tasks should be

divided in such a way between the minister responsible for agrarian and rural

development and the Hungarian State Treasury that the competences related to the

efficient manageability and execution of the program, including the delegable tasks,

should be given to the minister responsible for agrarian and rural development;

the responsibilities of the competent authorities of ARDA should be assigned to the

minister responsible for agrarian and rural development in order to ensure the

coordinated use of the EU development resources and the accreditation of the

transformed institutional system.

As a result of the above division of the institutional system, special attention should be paid to

the establishment of an appropriate cooperation between the data owners and users, the flow

of information, the regulation of data supplies, as well as the establishment of the technical

conditions of data delivery in the future.

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VII. List of abbreviations

HCSO: Hungarian Central Statistical Office

ARDA: Agricultural and Rural Development Agency

MA: Ministry of Agriculture

EAGF: European Agricultural Guarantee Fund

EAFRD: European Agricultural Fund for Rural Development

EFF: European Fisheries Fund

MePAR: Agricultural Land Parcel Identification System

FÖMI: Institute of Geodesy, Cartography and Remote Sensing

ENAR: Unique Identification System of Animals

HCA: Hungarian Chamber of Agriculture

AC: Agricultural Census

FSS: Farm Structure Survey

NFCSO: National Food Chain Safety Office

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Annex

1. The procedures applied by ARDA

Legal and regulatory framework for applied and applicable procedures of ARDA:

As a public institution, ARDA is subject to the general rules of administrative

proceedings and statutory legislation. In case of certain tasks of the Agency, another

legislation related to agriculture and rural development grants can be applied.

ARDA operates its own management functions so standards laid down in the Civil

Code should be applied in its activities.

As a public body, the primary function of ARDA is to deliver the financial resources

founded by the Hungarian state and the EU budget to the final beneficiaries who are

determined by authority organizations managing resources. Operation and allocation

of resources in ARDA is in accordance with the provisions of the EU's financial

rules as well as rules on general government finances.

Civil servants and professionals employed under contract constitute the human

resources of ARDA working under the law of civil service and other regulations.

Some tasks, if it is not prohibited by act and the supervisory authority of ARDA or

the Ministry of Agriculture (MA) and other authorities (e.g. governing authority)

give its consent, can be delegated to other public authority, public body, non-profit

organization or entrepreneur. The conditions of delegation is included in the so

called “delegation contract”.

An essential feature of the majority of the procedures used by ARDA is that in any case the

customers have to take an initiative. Only those customers can be a client of ARDA who are

recorded in the customer registration system. The first step of the initiative of the client is

therefore submitting the application. ARDA mostly initiates procedures which aim is to

overcome obstacles or to detect troubles and to involve resources.

Registered customers can initiate the following procedures:

assessing request for support;

payment of support determined in the legislation and specified during the evaluation

process;

permission (e.g. vineyard);

export permission

quota statement, specifying quotas;

intervention purchases and sales;

changing the decisions taken during previous procedures;

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1.1.1. Assessing request for support

Claim Processing steps according to the Act XVII of 2007

The allocation process of resources can be:

single-phase, restricted only for assessing the conformity of the legislation and

payment relating to the amount;

two-phase, assessing the conformity of the legislation and payment as well as

verifying conditions of the payment process;

The allocation of resources to clients in the single-phase procedure is untied. As a result of

this process clients obtain the area payments and specific supports for quality and

environmental improvement.

Submission of

application (38.§)

Admission of application

(39.§)

Correction of obvious

errors

(40.§)

Completion of

application (41.§)

Modification of

application

(42. – 43.§)

Certain checks related to

the action

(46. – 54.§)

Decision (55. – 56.§)

Changing decision,

withdrawal (57.§)

Statement of client (44.§)

Succession (45.§)

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A two-phase process is applied by ARDA for the placement of funds for investment purposes.

First, the agency verifies if the applicant meets the criteria specified in the Regulations

regarding support scheme, the intensions are to be implemented according to the objectives of

the Regulation, and after a successful implementation the results will be used effectively. The

evaluation criteria must be determined in each case in advance.

The single-phase process and the first stage of a two-phase process can be initiated after

receiving a request or tender application. In case of applications, the eligibility criteria has to

be determined by a ministerial decree at least. The single-phase procedure is closed down as

eligibility is defined or not available.

In case of a two-phase application process the evaluation, the assessment of the request and

the competition rules applied have to be based on law issued at Ministerial or higher level.

Additional information on the application can be provided for clients exclusively related to

technical issues.

Considering tenders, the assessment, evaluation and competition rules can be specified by a

lower level legislation than a ministerial one.

During the procedure based on request Community legislation, Act XVII of 2007 on the

provisions of Administrative Procedure shall be applied. Accordingly, clients and

stakeholders should be informed via injunctions and decisions regarding the determination of

eligibility and evaluation.

In the tendering system mailing is a sufficient method to communicate the decision (regarding

the obligation to fulfil all or part of the claim for payment) to the applicants. There is no need

for sending a decree instead of a notice. Of course, the strict management using injunctions

and decisions can be applied also in case of tendering.

In the tendering system the notification about the decision itself does not provide a legal basis

for the support request. It must be confirmed by a support contract between the applicant and

ARDA. Thus, the tendering procedure has actually three, not two phases since additional

provisions may also be required for contracting (e.g. proof of existence of financial resources

out of support).

The contract on support is in force under the rules of the Civil Law by the violation of it by

the client. As the support is provided (on the basis of the contract) by a public fund, in case of

violation by clients the Civil Law shall be replaced by the Act on Administration and the Act

on Public Finance providing additional protection on the use of public money. In case of an

assumed violation by ARDA, clients can lay a complaint which should be judged in an

administrative procedure (rejected or corrected) or may go to court for remedy. The latter is a

more advantageous option for the client as the proceedings are free of charge in case of

winning.

1.1.2. The payment of support determined in the legislation and evaluation process

In case of a one-phase process payment comes about after the positive judgement of the

application. In case of the second phase of the two-phase processes (or third phase if there is a

three-phase application including a support contract) ARDA has to evaluate the requests and

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in case of compliance has to fulfil it. ARDA has to examine the following three

circumstances:

the existence of eligibility criteria (only for parameters available in the National Spatial

Monitoring System),

completeness and adequacy of documents submitted with the application;

acceptable collection on the payable amount submitted by third parties (mainly ARDA,

state budget, court as executor).

In case there is no mistake or failure revealed during the investigation, process of

measurements starts working with the decision on payment done by the agency. At the end of

these activities the transfer is launched by ARDA via the Hungarian State Treasury.

An essential element both in case of the support process and payment of the aid is the

completion of application which makes possible to correct errors in a client friendly way. The

completion does not mean the endless expansion of the process that is why certain aspects of

the application (e.g. the value of the support is based, the amount of aid, certificate of

entitlement, etc.) cannot be the subject of correction.

1.1.3. Permission

Quantitative expansion of some activities and conditions related to food economy (e.g.

planting vineyard, plantation of certain fruits, exports and imports of certain products to third

country) are limited by domestic and EU legislation. To comply with these conditions it is

necessary to have updated information about the activities. This can be achieved if all the new

clients and clients completing the procedure through ARDA. The authorization is subject to

fulfilment of conditions, but the performance itself is not sufficient to obtain the permission. It

is also necessary that certain amount should not be fixed or should be certainly released.

ARDA may set a rank among applications on the basis of criteria pre-announced by the

supervising ministry in case of volume constraint and may refuse the application of those at

the bottom of the rank.

1.1.4. Setting quotas

Authorized bodies of the EU in activities related to the permission and intervention process

and the Hungarian authorities can establish quantitative limits for certain products even

producer-by-producer. These quotas will appear in EU legislation and in national legal

interpretations. The responsibility of ARDA is to evaluate and rank the applications regarding

the utilization of the quotas on the basis of the criteria determined by law.

Regarding certain products – in Hungary typically in the case of sugar beet - the EU supports

the elimination of production, namely the reduction of the national quota. Examination of

such support applications is the responsibility of the ARDA.

1.1.5. Intervention buying and selling intervention stocks

The Common Agricultural Policy takes into account that surpluses are generated periodically

in certain products due to weather conditions and market reasons. It is a common interest to

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lead out these surpluses from the market at an average price covering costs of production and

store as long as prices become favourable for selling, or sent as an aid to the poorest countries.

Intervention buying is a basic tool for controlling the market directly, and is closely connected

with the organization of storage and the competitive sale of products.

The first step of intervention procedures is that ARDA announces intention of buying with the

purchase prices and condition of delivery (quality parameters, date, period, delivery, storage

space, etc.). At the same time external contractors are competed to take over and store

production and ARDA makes contract with them. ARDA controls the storage process and the

storage itself in the intervention warehouses. ARDA organizes the sale of stored production

time to time by announcing the volume and "target price", assesses the offers arrived and give

permission for the transfer.

1.1.6. Change of decisions taken in previous proceedings, remedy, complaints

The status of clients and other circumstances may change from time to time which may

influence the elements related to formal and/or technical, economical (financial) content of

previously made decisions of ARDA. Reasonable amendments in compliance with the

relevant changes are beneficial not only for the client but also for the member state and

European Communities, therefore, ARDA is willing to fulfil such requests. In addition, there

may be some cases when ARDA should act flexible and not only rationally (vis maior, illness,

death of the client, extreme market events, etc.). According to the experiences the

modification of the technical, economic contents of the decision is acceptable in case of more

than 10% of the projects with multiannual maintenance.

Another initiative to change decisions is remedy. This procedure shall be started on the basis

of the clients’ appeal not on the basis of the clients’ application to ARDA. It is essential that

none of the stakeholders of the original decision do participate in this process in any form.

Most of the appeals stems from the lack of eligibility criteria and ranking which has negative

result regarding the client. In some cases only the differences in the interpretation of the

legislation or a real or presupposed mistake of the agency or its’ administrator stand for a

claim.

1.2. Procedures initiated by ARDA

1.2.1. Control procedures

ARDA as a national and EU public paying agency has monitoring obligations related to

ensure the legality of payments.

There are basically three types of supervision related to subsidy payment: so-called

administrative (done by administrators and automatically), physical (on-the-spot check,

laboratory test, monitoring and remote sensing) and document-based controls. The aim of the

audit is to reveal the unauthorized requests, and in some cases to monitor whether the usage of

already disbursed funds is in line with regulations.

If there is no legal regulation, regulatory requirement for a full and comprehensive on-the-

spot check for all clients, projects are chosen by a higher risk criteria. If it does not risk the

purpose of the inspection, preparatory notice may be sent before. These inspections

(controlling, sampling) can be carried out only by a person who has valid mandate for it

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including the task, the name and the identity of the inspector. The process is focused primarily

to the information of the request concerned but the entire project must be taken into account.

On-the-spot checks without support of remote sensing are underpin with the recorded

information, the attached documents, and the photographs in a minutes. The comments of the

client, the facts regarding any missing documents and the deadlines for the completion of the

application should also be included.

In case of suspected irregularity and discrepancy which cannot be clarified administratively

on-site inspection can be ordered.

It is possible to repeat each on-site inspection regarding supports. The purpose primarily is the

assurance of its quality. National and EU bodies controlling the work of ARDA can also

repeat optionally on-the-spot checks.

1.2.1.1. Administrative control

Administrative control means to verify the formal and content criteria of the data indicated in

the application. In terms of implementation two types can be distinguished: so-called manual

(by administrator) and the automated administrative controls.

First, the format of the data, the completeness of the application (missing certificates,

documents, insets to be attached, signatures) and the determination of obvious mistakes (e.g.

sums) is carried out by the administrator, and the examination of the content on the basis of

the documents submitted is to be done.

The automated, so-called cross-check control is carried out by a software program which is

able to compare the data of the application with other basic information and claims even in a

longer time period. As a result of the comparison the so-called duplicate claims can be filtered

out easily, but the existence of the object in the application (agricultural plot, farm animals,

etc.) or even the applicant can be checked.

1.2.1.2. On-the-spot inspection

The observation covers the followings:

Inspection and measurement of quantitative and qualitative characteristics (e.g. in case of

cultivated crops and farm animals the purpose of production, species, variety); simple

methods applied to measure volume (number, weight, area) regarding land, crop, plant

vegetation, farm animals, crop production, product, food, machinery, equipment, buildings,

infrastructure, software, existence of IT application.

Checking of the existence of supporting qualitative and quantitative documents for the

examination of records – available in paper and electronic form - (seed labels, contracts,

technology descriptions of machinery equipment, technical documentation, regulatory

approvals, etc.) and in some cases, documents to examine economic activity and grant

eligibility criteria (business plans, accounts, accounting, contracts, etc.).

The "simple measurement method" in some cases may cover sophisticated technology, e.g.

GPS technology.

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On-site inspections are three main types: on-site visit, on-the-spot checks and ex-post

controls.

In case of all projects related to investment an on-site visit has to be carried out at least once.

It should focus primarily to the supported operations (e.g. machine purchase) and the visit of

investment area (e.g. in case of construction), with the aim of recording what can be seen and

usually the examination of a few, randomly selected original document is controlled. In case

of investment projects a pre-development visit may be needed to make the decision regarding

the application.

On-the-spot checks involving all support activities mean detailed examination of all the topics

related to the project. The spot check covers all commitments and obligations of the

beneficiary and the examination of documents.

Especially in case of ex-post verifications concerning investment the controllers have to be

sure that the beneficiary actually implemented the investment, the same investment has not

been financed national or Community sources irregularly, and in case of projects involved in

operational obligations the beneficiary operates it in line with the Community and national

policy targets.

1.2.1.3. Laboratory analysis and verification with remote sensing

In cases specified by the EU Commission quantitative and especially qualitative

characteristics of the used land area, cultivated plants, crop vegetation and crop production

cannot be determined visually as the aim is to identify and verify the nutrition content. Special

tools, materials, procedures, conditions and expert knowledge with an authority of

accreditation is needed to carry out this kind of examination which is not available on the

spot. However, to complete the analysis collection of the right quantity and quality of sample

is essential. For items where sampling is necessary, requirements are presented in detail. In

most cases sampling is not carried out independently, but during the on-the-spot check as a

first step. Sampling can be carried out by contributors or by contracted parties not only by the

staff of ARDA.

Remote-sensing control is a special control procedure aiming to determine the utilization of

the earth's surface (cultivated area covered by crops and crop species) by processing and

evaluating aerial and satellite images. The method is based on the reflected radiation of

wavelength range of the different ground elements recorded in analogue or digital way which

allows the identification of land cover and the measurement of the area. The basis of the

remote sensing checks is the time series of high -resolution satellite images. Checking the

eligibility criteria means to overlap the data submitted and the ones collected with GIS tools

on the computer screen.

1.2.1.4. Document -based verification

This process is typical in case of those titles for which the support is related to the

implementation of operational obligations. The subject of the audit in this case is the report of

the client regarding to the annual operation and liabilities related to it (e.g. specified number

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of employment). Based on the report it should examine whether the tasks can be fulfilled up

to the expiry of the operation. Based on the information obtained from reports the inspector

can initiate a special on-site inspection.

1.2.2. Irregularity management

Multi-level procedures should be carried out by ARDA in connection with the management of

irregularities which can be closed at the end of each section, depending on the statement.

In the first phase the suspicion itself should be examined, rejected or confirmed. In case of

rejection the process is terminated.

If there is any justifiable irregularity, its fact and extent should be determined in the second

phase. Further questions are whether the elimination can be carried out or there is a need for

applying sanctions which generates claims towards the client. It can even endanger an

existing contractual relationship.

1.2.3. Sanctions

Sanctions can be started after closing the irregularity procedure, provided that the necessity of

the sanctions is laid down. Sanctions may be conducted solely on the basis of statutory

authorization, government or ministerial decrees within the framework of the legislation

(amounts, value limits, repeatability, the combination of more sanctions, etc.). The sanction

always must be communicated as a decision to the customer concerned.

1.2.4. Enforcement of claims

Claims of ARDA can be a result of payments in advance, the management of irregularities

concerning non-compliance with contracts and intervention sale or storage losses. The most

common cases of claims: repayment of advance payments, grant repayments, fines, penalties

and claims for damages, forfeit, incorrect payment. Significant, tens of thousands claims

related to insurance fee occurs in each year.

Moreover, in line with Act XXXVIII of 1992 on Public Finances the amount of the unpaid

debts from the support according to the National Tax and Customs Office (NAV) has to be

withhold by ARDA.

The claim can be indorsed by ARDA via debt collection, compensation and recovery. During

the enforcement ARDA acts as a government body as the amount indorsed is part of revenues

of the national or EU budget.

1.2.5. Public procurement

ARDA as a public organization is bound to this procedure in line with the law in case of

purchasing goods and services. In some cases of outsourcing the most suitable and

economically viable contractors should be selected within the framework of a public

procurement procedure.

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1.2.5.1. Official agreement

The contracting authority should make an agreement with the candidate in the public

procurement if there is only one acceptable candidate for the implementation of a high-value,

long -term task providing the fact that costs are not covered by ARDA but by European

and/or national funds.

1.3 Specifications for the new programming period 2014-2020

Related to the 2014-2020 programming period managing authority tasks in connection with

the implementation of EMVA and ETHA programs have been delegated from the Ministry of

Agriculture to the Prime Minister's Secretary of State for Rural Development. The

implementation related to the two resources has also been changed compared to the previous

period. The application and payment management in the new programming period is no

longer based on KET but on PTK. Government Decree 272/2014 contains regulation

concerning application and handling single payments regarding the 2014-2020 programming

period. Annex 1 of this Regulation contains the Operation Manual which should be uniformly

applied by all parties participating in the implementation.

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2. The connection of funds and programs

Various programs and resources between 2004 and 2020

Plan Program Source Period

SAPARD Plan

SAPARD Program SAPARD (Pre-

accession)

2000-2004

National

Development Plan

(NFT I.)

AVOP

(Operational programs)

From structural

funds. EMOGA,

HOPE

2004-2006

National Rural

Development Plan

(NVT)

EMOGA 2004-2006

National

Development Plan

(NFT II.)

New Hungary Rural

Development Programme

within the frame of Darányi

Ignác Plan (ÚMVP)

EMVA 2007-2013

Operational Programme for

Fisheries (HOP)

EHA 2007-2013

Partnership

Agreement

Rural Development

Programme (VP)

EMVA 2014-2020

Hungarian Operational

Programme for Fisheries

(MAHOP)

ETHA 2014-2020

Direct payments EMOGA, EMGA 2004-

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Funds managed by ARDA and their sources

Common Agricultural Policy

European Agricultural Guarantee Fund

(EMGA)

Internal market measures

External market measures

Intervention

Direct subsidies

European Agricultural Fund for Rural Development

(EMVA)

“New Hungary Rural Development

Programme” within the framework of

Darányi Ignác Plan (ÚMVP 2007-2013

Rural Development Programme (VP)

2014-2020

European Fisheries Fund (EHA) 2007-2013

Operational Programme for Fisheries (HOP)

European Maritime and Fisheries Fund

(ETHA 2014-2020)

Hungarian Operational Programme for

Fisheries (MAHOP)

National sources

National support National additional payments

(Top-Up)

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2.1. The EMVA and EMGA

As regards the Community funds in the agriculture significant changes have been introduced

from the financial year of 2007 affecting the financial background of agricultural subsidies

and other common agricultural market measures. The essence of the new CAP funding system

is that the European Agricultural Guidance and Guarantee Fund providing financial resources

is replaced by two new funds: the European Agricultural Guarantee Fund and European

Agricultural Fund for Rural Development.

The Rural Development Funds have been separated from the European Agricultural Guidance

and Guarantee Fund (comprised by the National Rural Development Plan in Hungary), and

the structural nature of the Agricultural and Rural Development Operational Programme was

terminated (comprised with other operational programs with the National Development Plan).

All agricultural rural development funds are now compiled in the European Agricultural Fund

for Rural Development. Thus, the second pillar of the Common Agricultural Policy, the rural

development fits into a single programming and financing framework and thereby consistency

and transparency may increase.

The remaining part of the EAGG transformed to the European Agricultural Guarantee Fund

which serves as the first pillar of the Common Agricultural Policy i.e. provides support to the

income of farmers including the direct producer subsidies, internal and external intervention

measures.

Basic Commission regulations for the programming period 2014-2020 came into force on 17

December 2013 regarding the European Agricultural Fund for Rural Development. The Rural

Development Programme compiled on the bases of regulations was adopted on 10 August

2015 by the Commission.

2.2. European Fisheries Fund 2007-2013

Council Regulation on the European Fisheries Fund entered into force on 27 July 2006. The

legislation established the European Fisheries Fund and determined the frame of Community

support regarding the fisheries sector, fisheries areas and the framework for the sustainable

development of inland fishing. The European Fisheries Fund operates as a source of supports

within the framework of the Operational Programme for Fisheries.

2.3. European Maritime and Fisheries Fund 2014-2020

The Commission Regulation on the 2014-2020 programming period came into force on 15

May 2014. Pursuant to the Regulation the Hungarian Operational Programme for Fisheries

was adopted on 07 December 2015 by the Commission.

.

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3. Funds managed by ARDA

3.1. Market measures

3.1.1. Internal market measures

The aim of the market measures is to support the production, processing, marketing and

private storage of certain agricultural products in the European Union. It also includes market

measures (quota management) related to production and processing. Internal market measures

include the following product lines: grape, wine, milk, fruit and vegetables, natural

sweeteners, honey. In addition, there are measures concerning several product lines funded by

national programs like animal diseases and elimination of zoonosis.

3.1.2. External market measures

The aim of external market measures is to offset differences related to higher internal market

prices and lower world market prices by establishing market conditions outside the European

Union with third countries. ARDA operates export licensing and export refund schemes for

the following products: live cattle and beef, pork and pork products, milk and dairy products,

grain and grain products, sugar, poultry and poultry meat, eggs and (processed food).

3.1.3. Intervention measures

The aim of the intervention measures is to manage and prevent market disturbances in case of

cereal, rice, sugar, alcohol, dairy and meat products. A significant amount of product can be

extracted temporarily from the market by acquisitions financed by the Community and stored

privately which is sold after the cessation of market disturbances. The EU announces

intervention prices which in most cases are below the average internal market prices and only

partially cover the costs of production. If the market price falls below the intervention price

producers may offer unlimited amount of products subject of intervention to ARDA for

intervention buying. Long-term intervention prices have a significant impact on the internal

market prices.

3.2. Direct payments

3.2.1. Single area payments and other direct subsidies

The system of direct payment is funded by two separate sources which are inter-related to

each other:

The Single Area Payment Scheme (SAPS) is financed by the European Agricultural

Guarantee Fund (EAGF). Utilized agricultural land area eligible for subsidy in SAPS system:

arable crops, forage areas, grasslands, as well as vineyards and orchards.

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The additional funding (top-up) is connected to the single area payment scheme, but its source

is the Hungarian budget. It includes direct area, livestock and other income compensation

measures. These are as follows (2014):

Dairy premium (based on a historical database)

Cow keeping support (related to production)

Ewe keeping support (related to production)

Support for extensification of cattle keeping (based on a historical database)

Additional support for keeping ewes on less-favoured area (based on a historical

database)

Fatty bull holding support (based on a historical database)

Support of Burley tobacco production (based on a historical database)

Support of Virginia Tobacco cultivation (based on a historical database)

Support of production of nuts (related to production)

Direct subsidies from EU sources:

Separate sugar payment

Separate fruit and vegetable support

Tobacco restructuring support

National support schemes

National support schemes consist on the one hand of subsidies financed by the national

budget which is harmonised and maintained by Hungary after accession to the EU. On the

other it includes low amount subsidies (de minimis) that do not distorte the competition

between EU countries and do not have to report to the EU; and new subsidies introduced with

an authorization of the EU and are in line with EU directives.

3.3. “New Hungary Rural Development Programme” within the frame of Darányi

Ignác Plan

The aims of the program are to create an agriculture which is competitive, maintain a

sustainable development and management, the diversity of enterprises, a viable holding

structure and rational land use, encourage market-orientation and increase qualification level.

In total about 5 billion euros EU fund, i.e. nearly 1,300 billion Hungarian Forint is available

for the period 2007-2013 including co-financing for the development of agriculture,

environment and rural development.

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Grants of the European Agricultural Fund for Rural Development are distributed along four

groups of measures (axle).

The first axis can be spent on improving the competitiveness of agriculture, food processing

and the forest sector.

The second axis contributes to the improvement of the environment and rural area. This

includes agro-environmental and the Natura 2000 measures.

The third axis was created to improve the quality of life in rural areas, encourage

diversification which means the implementation of bottom- up initiatives, strategy plans

established with the participation of municipality governments, businesses and civil

organizations.

The fourth axis is the LEADER program. The aim of the EU's most successful rural

development initiatives is to use the internal resources in a sustainable and innovative manner.

3.4. Rural Development Programme

The aim of the program is to create such an agriculture which underpins the competitive

sustainable development, maintains the diversity of enterprises, holding structure, rational

land use, encourages market-oriented approach and increases the qualification level.

In total about 4.145 billion euros EU fund, i.e. nearly 1250 billion Hungarian Forint is

available for the period 2014-2020 including co-financing for the development of agriculture,

environment and rural development.

Found from the European Agricultural Fund for Rural Development is allocated along the

following measures within the Rural Development Plan:

1. Transfer of knowledge and actions related to provision of information

2. Advisory services, farm management services

3. Agricultural products and food quality schemes

4. Investments in tangible fixed assets

5. Restoring agricultural production potential causes by natural damages and

introduction of appropriate prevention measures

6. Development of farms and businesses

7. The renewal of basic services and villages in rural areas

8. Development and investments to improve the viability of forests areas

9. Setting up of producer groups and organizations

10. Agro-environmental and climate-related operations

11. Organic farming

12. Natura 2000 payments and payments linked to the Directive of Water Framework

13. Payments related to less favoured areas or other disadvantages

14. Animal welfare

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15. Services related to forest, environment and climate, conservation of nature

16. Co-operation

17. Risk management

18. Financing complementary national direct payments in case of Croatia

19. Support of local development in the context of LEADER (local development

directed by community)

20. Technical assistance

3.5. Operational Programme for Fisheries (HOP)

The Operational Programme for Fisheries is based on the Hungarian National Strategic Plan

for Fisheries in line with the Council Regulation 1198/2006 (EC) on the European Fisheries

Fund and Commission Regulation 498/2007 (EC) regarding its implementation.

The primary objective of the Operational Programme for Fisheries is to increase fish

consumption in Hungary, as well as to improve the competitiveness of the Hungarian fisheries

sector at national and international level.

Since Hungary has no sea or sea-fishing fleet and there are no settlements which long-term

viability is depending mainly on fisheries, only measures defined in axes II., III., and V. of the

Regulation on the European Fisheries Fund are supported.

Accordingly, the Operational Programme for Fisheries subsidies are structured around the

following priorities:

Priority Axis II.: Aquaculture, inland fisheries and processing and marketing of

fishery and aquaculture products;

Priority Axis III.: Measures of common interest;

Priority Axis V: Technical Assistance.

The financing plan of the Operational Programme for Fisheries defines the annual

commitment of the European Fisheries Fund included in the Operational Programme for

Fisheries separately by regions and convergence objective eligible and not eligible for

support. It can be said that for the convergence objective regions the European Fisheries Fund

part is 34,291,357 Euro complemented by 11,430,453 EUR of national support, so the total

amount of aid is 45.72181 million EUR (75 per cent of which is coming from European

Fisheries Fund). The largest part of the total amount can be used for measures of Priority II.,

total value of Euro 31,605,897.

In case of one region not under Convergence objective the amount available much less. The

total grant is 1,119,006 Euro makes up half national and half European Fisheries Fund,

according to 50 percent co- financing ratio.

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3.6. Hungarian Operational Programme for Fisheries (MAHOP)

15.5 billion HUF is available for the development of the fishery sector within the Hungarian

Operational Programme for Fisheries up to 2023 which is percent higher than in the previous

period.

The key objective of the development of fish farming is to support the competitiveness of

small and medium producers and traditional fish pond production. In addition to preserving or

increasing biodiversity, the use of alternative energy sources and reduction of the

environmental impact applied to maintain sustainability of aquaculture.

Another important goal is to include new species into the production, to support intensive fish

production using innovative technologies, to support of fish processing. Campaigns will run

to stimulate fish consumption in the future, taking great to include more fish dishes into the

catering sector.

3.7. National Development Plan (AVOP)

Hungary designed to ensure the realization of objectives in agriculture and rural development

covering the period 2004-2006 within the framework of the Agricultural and Rural

Development Operational Programme developed to use Structural Found according to the

National Development Plan. The main objective of the program is the modernization of

agriculture, improvement of the efficiency of production and rural areas.

The Agricultural and Rural Development Operational Programme benefited from two sources,

the Guidance Section of the European Agricultural Guidance and Guarantee Fund and the

Financial Instrument for Fisheries Guidance.

The payment of Agricultural and Rural Development Operational Programme is completed,

109 billion HUF was payed to 6582 clients until 29 November 2009.

3.8. National Rural Development Plan

Hungary's National Rural Development Plan includes rural development measures financed

by the Guarantee Section of the European Agricultural Guidance and Guarantee Fund. It sets

the objectives for sustainable development of rural areas and measures of their

implementation as well as activities eligible for support within it. The National Rural

Development Plan promotes environmentally friendly agricultural production, provides

support for farming in less favoured areas, increase forest cover of the country. The actions of

the plan will contribute to the economic viability of semi-subsistence farms, as well as the

setting up and operation of producer groups.

The National Rural Development Plan does not cover all rural development measures for the

funding period of 2004-2006. The complex rural development plan is realized in different

documents in harmony with each other (National Development Plan and its operational

programs in particular the Agricultural and Rural Development Operational Programme).

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3.9. SAPARD Program

SAPARD (Special Accession Programme for Agriculture and Rural Development) - pursuant

to Council Regulation 1268/1999 of 26 June 1999 entered into force on 1 January 2000 – in

addition to the PHARE and ISPA programs – is one of the aid programs to help associate

member countries of the European Union for the preparation of membership.

The aim of SAPARD was twofold. On the one hand to assist the candidate countries to take

over) EU law (acquis communautaire) including the Structural Funds, in particular

preparation to be able to receive the European Agricultural Guarantee Fund, and secondly to

contribute sustainable development of agriculture and rural areas.

Payment of SAPARD is completed, 60 billion HUF was payed to in 2646 clients until 19 June

2007.

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4. Data management of ARDA

4.1. Registration of clients applying for support

Chapter III of Act XVII of 2007 sets out the rules of the registration of clients applying for

support. Based on these rules, the core data of the individual clients are registered in the

Uniform Agricultural Client Registration System.

ARDA has to record the core data necessary for the identification of the clients affected by

the individual actions/legal titles in the Uniform Agricultural Client Registration System. The

following data should be provided for entry into the registry and the generation of a client

identification number:

a) For private individuals:

a.1. Name

a.2. Mother’s maiden name

a.3. Place and date of birth

a.4. Birth name

a.5. Citizenship

a.6. Tax identification number

a.7. Residence (official seat in the case of sole traders)

a.8. In the case of a person under legal age, the data of the statutory representative, while

in the case of an incapacitated or partially incapacitated person, the data of the

guardian (based on the list above)

a.9. The place of storing documents, if different from residence

a.10. Correspondence address, if different from residence

a.11. In the case of electronic contact, e-mail address

b) For legal entities:

b.1. Name

b.2. Tax number, or if the client is a foreign company, the tax number established by the

competent authority of the state where the client is resident

b.3. Official seat

b.4. Name, short company name

b.5. Name and residence of the person authorized to act on behalf of the company

b.6. Site or sites

b.7. The place of storing documents, if different from official seat

b.8. Correspondence address, if different from official seat

b.9. In the case of electronic contact, e-mail address

b.10. In the case of a budgetary organization, its type and PIR (Financial Registry

System) number

b.11. Statistical code

b.12. Start date of operation

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In the case of a foreign natural person or a foreign company, besides the above-listed data, the

tax number established by the authority of the state in which such person or company is

resident, as well as the name and residence (official seat) of the Hungary-based delivery agent

of such person or company, also, in the case of a foreign natural person or a foreign company

that takes part in any action involving financial consequences, with no Hungary-based

residence or official seat, these data should be provided.

ARDA has the following responsibilities as part of keeping the client registry:

1. performs the official tasks related to the keeping of registry

2. establishes the client identification (registration) number

3. performs data supply from the registry, authorized by a specific law, in a scope defined by

the statutory authorization

4. runs the IT system of the client registry

5. records the client’s classification, which may be:

5.1. entered into the register

5.2. entered into the register at request

6. issues an official certificate on the registered data for clients entered into the register at

request

The application for entry into registry should be submitted to ARDA in a form regularly used

for this purpose (No. G001).

Continuous access should be provided to the client registration system, furthermore, in order

to conduct the inspections related to the individual cases and procedures, to the extent

required for such, ARDA and the competent authority, as well as the food chain supervisory

authority mutually provide access to their professional systems for each other. The personal

data thus received can only be handled for the purpose of conducting the inspections, by the

end of the fifth year after the closing of the case affected by the inspection.

During participation in the actions/legal titles, the individual identification of the client is

ensured by the client identification number. Only one client identification number is to be

established for both the natural person clients and the other clients. The client registration

system qualifies as a public register with regard to the client identification number.

Only those clients may participate in any actions/legal titles involving financial consequences

who (which) have reported the classification of their company according to the Act on Small

and Medium Enterprises and the Support to be Provided for their Development, as well as

their payment account number and the currency type of such account in their application for

entry into registry but at the same time as submitting their application for an action involving

financial consequences at the latest.

For reporting the payment account number, a copy of the payment account statement not older

than two months, which certifies the existence of a payment account owned by the client, or a

statement by the payment service provider keeping the account not older than two months

prior to the date of submitting the application, should be attached, which contains the data

required for the identification of the client and the payment account for the client’s name.

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A foreign company or a foreign natural person client may also provide an international

payment account number. ARDA will refuse to effect the payment and will adopt a negative

decision if the client or another person submits an application for the execution of a payment

to a payment account registered under a different name recorded in the client register and

under the name of the client.

The client gives an authorization or a commission for their representation, the client or their

authorized representative should report anything to the client registration system in the

regularly used form either by mail or in person.

The client is obliged to report the withdrawal or termination of the authorization or

commission in the regularly used form without delay. The termination of the right of

representation may be reported by either the authorized person or the agent. The formation

and termination of the right of representation are valid from the date of the receipt of such

report.

The client is obliged to report any changes in their data specified in the client register, as well

as any decisions on the client’s windup, the client’s being under a bankruptcy, voluntary

liquidation, liquidation or debt settlement procedure, or the termination of the existence of a

legal entity or another organization.

Any changes should be reported in the valid form within fifteen days from their occurrence by

adding that changes can also be reported electronically. The type of client identification

number may be modified at the same time when the application for launching a procedure

involving financial consequences is submitted.

If ARDA becomes aware of the change in any other way, the client should fulfil their change

reporting obligation by the deadline specified in the instruction issued by ARDA.

If the data modification obligation is missed, ARDA will instruct the client (the asset

manager, the liquidator, the receiver, or the trustee) to fulfil their obligations in a ruling, and if

the deadline for fulfilment required by the decision is missed, ARDA will oblige the client to

pay a default penalty.

Based on a statutory authorization, ARDA may compare the data of the client specified in the

Uniform Agricultural Client Registration System to the data specified in the records in

ARDA’s competence during the inspections related to participation in the individual actions.

If it is established that there is a difference between the client’s registered data and the other

records, the client will be instructed to clarify the reasons for the difference in data and to

certify the reported data.

If the data difference is established by ARDA based on the data of a public register, the data

specified in the public register will be entered into the client identification system (without

any instruction to certification and without any specific notice).

The client identification number of a client entered into the register at request should be

indicated in all the regular forms related to participation in the actions.

The application for entry into the registry can be refused without any meaningful inspection,

in a ruling if the data reported by the client are incomplete.

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For those clients who (which) did not submit an application for entry into the registry but such

submission is necessary for fulfilling their tasks defined by law, ARDA may establish a client

identification number to be able to identify the client.

A client classified as registered can request a change in its classification in the regular form

and by reporting the necessary data. If the classification is changed, the client identification

number will not be modified.

The data of the client entered into the register at request are maintained by ARDA, while the

data of the clients entered into the register are maintained by the body that initiated the

client’s registration.

If the client has missed their change reporting obligations related to the client registration

system, no entitlement can be established, no support amount can be paid until the reporting

and data supply obligations are fulfilled, or until the default penalty for missing to fulfil these

obligations is paid, and also, the new applications submitted by the client will be rejected

without a meaningful investigation.

4.2. Handling of the support data

For fulfilling the responsibilities in its competence, ARDA may manage:

1. the identification data, residence data and client identification number of the natural

person client,

2. the data created for the client in the procedure related to participation in the

individual actions,

3. the data collected as part of the monitoring data supply,

4. the data obtained on a third party during the inspection of the client until the right to

the execution of unauthorized participation in an action regarding the support legal

title in question expires.

ARDA may only use the data taken over from the register of a body or organization defined in

Act XVII of 2007 for the identification of the client, the establishment of eligibility for

support, the checking of criteria related to the actions, as well as for the clarification of facts

in procedures launched at the client’s request. If the delivery of data between ARDA and

another authority, or the takeover of data from the official registers is allowed by law, this

data supply can also be done electronically.

ARDA may deliver the support data related to the performance of the inspections within its

competence to the body that performs the assigned task within the expiry period of the right to

execute unauthorized participation in an action, or to the cooperating body, the competent

authority, and these bodies or organizations will manage these data.

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4.3. Data supply

If ARDA conducts or initiates a procedure in relation to supporting a deceased private

individual and in the course of this, the identity of the heirs should be known, the body that

conducts the probate inventory-taking will supply data on the fact of preparing the probate

inventory, as well as on the name and official seat of the notary public who conducts the

probate.

The notary public who conducts the probate informs the office of the identity of the heirs, by

specifying the natural person’s identification data necessary for such identification, or

provides information on the termination of the probate.

In order to conduct the necessary inspections and to take other actions, ARDA is obliged to

make the support data available to the bodies entitled to carry out inspections, as well as to the

paying agency of another member state. The data delivery obligation can be fulfilled on the

basis of a written inquiry and only to the extent necessary for performing the tasks of the

applicant specified in a law or in a separate agreement.

The client-related support data, which are related to farming, the utilization of soil, animal

husbandry, forest management, the storage and processing of agricultural products, as well as

other agricultural activities, or fishery, are delivered to the Central Statistical Office of

Hungary in a way that is unsuitable for individual identification, while the data related to the

amounts and utilization of the support are delivered free of charge, as aggregated data, for

statistical purposes to the same Statistical Office. The data delivery obligation can only be

fulfilled on the basis of a written inquiry, and to the extent necessary for the performance of

the tasks of the Central Statistical Office of Hungary as stipulated by law.

4.4. Special provisions on the protection of support data

Any data that are used for the substantiation of a decision according to the Act on the Right of

Informational Self-Determination and on Freedom of Information prepared or recorded in the

ARDA procedure is not deemed to be public support data.

Out of the support data managed by ARDA, the following will qualify as data of public

interest in the case of clients who receive support financed from the state budget, from the

European Agricultural Guarantee Fund (EAGF), the European Agricultural Fund for Rural

Development (EAFRD) or the European Fisheries Fund (EFF), disbursed by the agency on

the basis of a statutory authorization (Act XVII of 2007):

a) Surname and first name (company name), residence, official seat, site

b) The legal title of support

c) The amount of the disbursed support amount

d) The amount of repaid support due to unauthorized participation

The agency publishes the data regarding the support amounts disbursed from the first day of

the current year until the last day of the current quarter, as well as those on the support

amounts repaid on the basis of unauthorized participation on its homepage on a quarterly

basis, by the last day of the month following the quarter the latest. In this disclosed statement,

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the aggregate amount of the EAGF and EAFRD support amounts disbursed during the period

in question, as well as the total of the disbursed support amounts are also indicated.

ARDA provides such a search engine for the disclosed data which allows the users to search

the beneficiaries for name, administrative area, amount, or the combination of these.

As long as an employee or former employee of the agency, an expert involved in the

inspection or the procedure, or all other persons who are responsible for data supply,

registration, processing, inspection, the establishment of support amounts, debt collection,

foreclosure or use for statistical purposes, become aware of non-public support data or data

protected by law in relation to these responsibilities, they will be obliged to preserve these.

As long as the client uses advisory services for the compilation of their application for

participation in an action, it is the provisions set out in a specific law, in the directly

applicable community legal act, or in the agreement entered into with the client that shall be

applied with regard to the confidentiality obligation of the expert providing the advisory

services.

Non-public support data can only be used by a body other than the agency with a well-

grounded reason. Non-public support data are used with a well-founded reason:

b) if such use serves the control of the support amount.

c) if such data can be used by the agency and the bodies that are controlled by the official

statistical services for statistical purposes if the fulfilment of the confidentiality

obligation is ensured during the processing (unless this is otherwise provided by the

Statistics Act) and these data are made unsuitable for subsequent individual

identification.

d) if such non-public support data is communicated, at request, by this body to the tax

authority or the customs authority within the validity period of the right for

unauthorized participation in the action if such communication supports the disclosure

of a tax or customs burden, a tax deficiency, the establishment of the collectability

thereof, or is necessary for the performance of a customs or tax administration

procedure.

e) if the body in question is otherwise authorized to handle the data under a law, it may

provide information on the non-public support data:

1. to the court

2. to the public prosecutor’s office

3. to the investigation authority based on an inquiry approved by the public

prosecutor if such information is required for the launching or performance of

a criminal procedure

4. to the national security services acting in their competence defined by law,

based on an inquiry permitted by the competent national security organ

5. to the State Audit Office, the internal audit organization appointed by the

Government, the European Anti-Fraud Office (OLAF), the state tax authority,

and the customs authority if such information is required for the inspection

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6. to the European Commission, the European Court of Auditors, the European

Court

7. to the competent authority or the managing authority

8. to the organ that manages the budgetary chapter if such information is required

for the internal audit required by the Act on Public Finances

9. to an organ performing a public task in the scope necessary for performing

such tasks

10. to the Hungarian State Treasury in order to run the national support monitoring

system

f) if it is required or permitted by law.

g) if the client concerned gives their consent to the utilization of the data.

The agency is entitled to inform the authority responsible for performing post company audits

on the non-public support data if it is necessary for the post company audits of the procedure

that the client executed during their participation in the action.

4.5. Agricultural Land Parcel Identification System

In the case of the actions that are subject to Act XVII of 2007, the Agricultural Land Parcel

Identification System (Hungarian acronym: MePAR) is the national land area identification

system. MePAR qualifies as a public register. The database of MePAR is owned by the state,

over which the right of disposal, including the maintenance of the stored data, is exercised by

ARDA on behalf of the state. The statutory requirements related to MePAR are set out in

Ministry of Agriculture (FM) decree No. 71/2015. (XI. 3.).

It is the following terms that will be used in connection with MePAR:

Permanent grassland: an area as defined in the provision on the establishment of the

rules governing the direct payments to farmers on the basis of the support systems

under the Common Agricultural Policy, as well as in Point h), Section (1), Article 4 of

regulation (EU) No. 1307/2013

Block identification: a series of numbers combined with letters used for the specific

and clear identification of a physical block

Land cover coverage: areas separated from each other by taking the features of

surface coverage into account, which are used for different agricultural purposes, or

which differ from each other in other characteristics

Uniform application: an application prepared according to the ministerial decree on

the uniform application of the year under review

Physical block: coherent land area developed for the support procedures related to the

land area, with permanent agricultural cultivation for several years, with borders that

can be identified on the ground

Cadastral coverage: a non-certified non-public digital geographic information system

which is produced annually with a reduced data content from the state real estate

registry map-based database, which contains,

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o as a GIS coverage consisting of polygons, the land parcel borders, the

topographical numbers of the land parcels, the name of the settlement, as well

as the county, settlement and location codes, and

o as a GIS coverage consisting of points, an internal point of the land parcels, the

topographical numbers of the land parcels, the settlement codes, as well as the

coordinate of the internal points as per the Uniform National Projection System

Environmentally sensitive permanent grassland: an area as defined in Point 11,

Section 1(1) of Ministry of Agriculture (FM) decree No. 10/2015 (III. 13.)

Agricultural land parcel: a land area as defined in Point a), Section (4) of Article 67

of regulation (EU) No. 1306/2013

Non-supportable area: an area which is not compliant with the concept of

supportable area as defined in the decree

Ecologically significant area: an area delimited as an ecologically significant area in

the Agricultural Land Parcel Identification System (hereinafter referred to as: MePAR)

as defined in Points a)-h of Section 13(1) of Ministry of Agriculture (FM) decree No.

10/2015 (III. 13.)

Area with special features: a non-supportable area for which support can be applied

for on the basis of the laws on legal titles for support related to the use of the

individual land area

Supportable area: a land area as defined in Sections (2)-(6) of Article 32 of

regulation (EU) No. 1307/2013 of the European Parliament and of the Council

Thematic map layer: a subset that is part of the GIS system, containing logically

correlated data

Change management procedure: a procedure aimed at the modification of data

incorrect as a result of the deviation from the actual local condition

MePAR is the exclusive, national-level identification system of the procedures of providing

support to the use of land areas as per Section (2), Article 67 of regulation (EU) No.

1306/2013. A physical block is the reference point of land area identification. It is within the

individual physical blocks that the agricultural land parcels and the related ecologically

significant areas are designated.

The images that support the map representation of the MePAR physical block system are

orthophoto or space photos with a very high resolution. MePAR is a physical block-based GIS

system, as well as the database thereof. The map basis of the MePAR GIS system should be

prepared and updated in the Uniform National Projection System.

MePAR should be run in such a way that:

it should make it possible to define the location of the agricultural land parcels within

the physical block, which parcels constitute the basis for providing support, as well as

to define the location and determine the size of ecologically significant areas

it should provide the data necessary for the administrative control of the applications

submitted in the support procedures, especially for filtering the excess area claims and

double claims, the cross-checks between the legal titles of support, the review of the

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proximity of ecologically significant areas and agricultural land parcels, furthermore,

the data required for remote sensing tests and on-site inspections

it should be suitable for providing the GIS bases required for the management of

applications for support lodged to the Agricultural and Rural Development Agency

(hereinafter referred to as: ARDA), and

the correlation between the land parts in the cadastral coverage, the physical blocks,

the agricultural land parcels and the ecologically significant areas should be easy to

establish.

4.5.1. Data content of MePAR

MePAR’s core data are as follows:

the borderlines of physical blocks

the area measurements of physical blocks

the borderlines of areas which are supportable or non-supportable within the

physical block, including those with special features

the area measurements of areas which are supportable or non-supportable within the

physical block, including those with special features

the block ID

orthophoto or space photo with a very high resolution

the borderlines of ecologically significant areas

the area measurements of ecologically significant areas

the borderlines of the protected landscape elements

the area measurements of the protected landscape elements

Furthermore, MePAR contains the cadastral coverage, as well as the data on the individual

thematic map layers created or to be created on the basis of the law, the invitations to tenders

for the support co-funded by the European Fund for Agriculture and Rural Development, or

technical guidelines.

4.5.2. Definition of a physical block

Physical blocks are defined on the basis of remote sensing data recording and if necessary,

on-site data recording. Within the physical block, supportable or non-supportable areas,

including those with special features, the areas in the surface coverage, and the ecologically

significant areas are separated by taking the actual agricultural cultivation at the time of the

data recording into account.

In the physical block, the borderlines indicated in the law should only be developed if the

independent delimiting of the area bordered by them is required by law, the invitations to

tenders for the support co-funded by the European Fund for Agriculture and Rural

Development, or technical guidelines. A physical block may contain several agricultural land

parcels.

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4.5.3. Scheme-type renewal of MePAR data

The scheme-type renewal of the data defined in the law and of the thematic map layers is

performed through a repeated data recording. Such data renewal should take place at least

once in three years for all the territory of Hungary.

The ex officio supervision of map data because of their deviation from the local condition

may be initiated by ARDA and FÖMI (the Institute of Geodesy, Cartography and Remote

Sensing), the data may be modified by FÖMI with the approval of ARDA and the necessary

changes should be entered into the file copy of the core data as well.

It is FÖMI that is responsible for the entry of the cadastral coverages into the MePAR

database on the basis of the state real estate registration map database.

4.5.4. MePAR’s change management procedure

The client may launch a change management procedure if

the data do not agree with the actual on-site status existing at the time of lodging the

application for launching a change management procedure and the land parcel or area

affected by the change management reaches beyond the non-supportable area of the

physical block or another physical block by at least 3 meters in such a way that the

size of the areas affected by such extension reaches 0.05 hectares, or

the MePAR data do not agree with the actual on-site status existing at the time of

lodging the application for launching a change management procedure with regard to

the small lake, tree and bush group and a lonely tree that were reported by the client in

the uniform application in the current year as an ecologically significant area,

qualifying as a protected landscape element; and the real size of the area, the extension

of the small lake, tree and bush group, as well as the lonely tree show a minimum 0.01

hectare difference as compared to the status recorded in MePAR.

In their change management application, the client is obliged to inform ARDA of any and all

changes in the data concerning them, or those changes that were executed by them.

If the client initiates a change management procedure at the same time when the uniform

application is submitted, and it is established in this procedure that the data under Points a)

and c) of Section 4(1), as well as the data regarding the small lake, tree and bush group and a

lonely tree that were reported by the client in the uniform application in the current year, as an

ecologically significant area, qualifying as a protected landscape element do not agree with

the actual on-site status existing at the time of submitting the change management request,

then the data under Points a) and c) of Section 4(1), as well as the data regarding the small

lake, tree and bush group and a lonely tree reported as an ecologically significant area,

qualifying as a protected landscape element will be re-entered.

The change management request should be submitted as part of the uniform application

electronically, by the end of the period available for the submission of the uniform application

as stipulated by the decree on uniform applications of the current year.

The application for change management should contain the following data:

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data for client identification

the client identification number established in the Uniform Agricultural Client

Registration System

the description of the affected legal title for support

utilization code

the ID of the physical block including the land parcel reported in the uniform

application

the ID of the physical block affected in the change that is in direct proximity with the

physical block including the land parcel reported in the uniform application

the detailed description and justification of the report included in the change

management request

warning that in a change management application form, only one physical block that

includes the land parcel reported in the uniform application can be indicated

a recent block allocation map provided by ARDA, in which the change indicated in

the application should be clearly drawn and such drawing should be referred to by a

serial number in the change management request

With regard to the uniform applications submitted in the current year, it is exclusively the data

of the decision made about the change management application lodged by December 31 of the

current year that will be taken into account. If the change management application submitted

electronically between December 31 of the current year and the period available for the

submission of the annual uniform application in the year following the current year, or the

change management application filed as part of the annual uniform application of the year

following the current year are submitted with regard to the same or partly the same area, then

the affected applications will be jointly assessed by ARDA.

No change management procedure can be launched if the client did not claim any direct area

payment for a land block or protected landscape element reported in the uniform application,

which was requested to be supervised, in the current year. If the total area of the land blocks

reported in the specific physical block exceeds the supportable area of the specific physical

block, ARDA will launch an ex officio supervision regarding those land blocks for which the

client has not claimed any direct area payment.

ARDA is entitled to review whether the data defined in Section 4 of the effective decree are

right and if necessary, to initiate that they be modified by FÖMI. FÖMI is entitled to launch

an ex officio supervision with ARDA regarding whether the data are right. After the data

modification that becomes necessary as a result of such supervision has been approved by

ARDA, it is FÖMI that will take care of entering the data into MePAR.

4.6. Uniform Registration and Identification System (ENAR)

According to the laws on the operation and updating of the individual subsystems of the

system, these activities are performed by the National Food Chain Safety Office (NFCSO).

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During the execution of the individual legal titles, it is the eligibility conditions defined in the

decree on legal titles that are controlled. ARDA checks the quantities (the number of animals)

claimed by the client in the application for support. The data required for such control are

delivered to ARDA by NFCSO in the framework of a cooperation agreement.

In this cooperation agreement, it was stipulated as a result of which actions, by what deadline

and with what data content the data were supplied. Since the two offices use the uniform

client registration system, the connection between the different databases is provided by the

individual client identification numbers.

4.7. Area payments and other related support types

It is Ministry of Agriculture (MA) decree No. 5/2015 (II. 19.) on Single Area Payment scheme

financed by the European Agricultural Guarantee Fund and on certain issues relating to the

use of temporary national support that regulates this.

Terms:

Ewe: each female animal belonging to the species of sheep which has yeaned on at least one

occasion, or is at least one year old

Suckler cow: a cow belonging to the meet-breed type or born of crossing with a meet-breed

type, which belongs to the livestock kept for raising calves for meat production, or is a female

type of cattle older than eight months of age, one that has not yet yeaned, one that belongs to

the meet-breed type or born of crossing with a meet-breed type

Assignment: the sale of the total of animals reported in the application for support to a

recipient within the period of keeping the animals on the land allotment, and assignment

pursuant to decree No. 106 of 2007 (IX. 24.) FVM of the Ministry of Agriculture and Rural

Development concerning historic entitlements (FVM decree No. 106/2007)

Assigner: a farmer whose animals reported in the application for support were assigned to

another farmer, and who is a deliverer according to the Fundamental Decree (i.e. Ministry of

Agriculture (FM) decree No. 5/2015 (II. 19.))

Recipient: a farmer to whom all the animals reported in the application for support are

assigned, and who is a recipient according to the Fundamental Decree (i.e. Ministry of

Agriculture (FM) decree No. 5/2015 (II. 19.))

Keeping animals on a land allotment: keeping the requested animal at the breeding farm of

the applicant for a period of time defined for the individual legal titles

Reported land block: the smallest coherent, uniformly cultivated land area, as reported by

the client in the uniform application, which is not intersected by any coherent area affected by

any commitment

Closed area: a land area on which the client did not indicate any reported land blocks in the

uniform application in the year preceding the current year by two years, or the agency did not

establish any areas affected by entitlement to support with regard to the specific reported area

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after the inspections in the year preceding the current year, and the client did not indicate any

reported land blocks in the uniform application in the year preceding the current year, or the

agency did not establish any areas affected by entitlement to support with regard to the

specific reported area after the inspections in the current year

Uniformly cultivated area: a coherent, uniformly cultivated land area used by several clients

for the cultivation of the same plant crop, within which the borders of the areas utilized by the

individual farmers cannot be separated during the on-site inspection

Upper limit of individual support: the amount of entitlements to support registered on the

basis of the ministerial decree on the entitlement of a farmer to support linked to the number

of animals (Ministry of Agriculture (FM) decree No. 82/2005), as well as the ministerial

decree on the conditions of claiming support entitlement linked to the number of animals from

the national reserve (Ministry of Agriculture (FM) decree No. 30/2006)

Uniform application: an application as per the current year ministerial decree on the uniform

procedural rules concerning the use of the individual support amounts financed from the

European Agricultural Guarantee Fund or the central budget (Uniform Application Decree,

Ministry of Rural Development (VR) No. 28/2014)

Utilization: growing the plant crop, plant species, plant type or a mix thereof in the

agricultural land area, as required by the ministerial decree on the specific legal title for

support, or the uncultivated agricultural land area, by taking the set of criteria required for

sustaining the “Good Agricultural and Environmental Condition” to be achieved for applying

for the single area payment scheme and certain rural development aids.

Utilizer: the farmer utilizing the area reported in the uniform application

Supplementary historic entitlement: an entitlement as per the ministerial decree on the

establishment of supplementary historic entitlement (Ministry of Agriculture and Rural

Development (FVM) decree No. 160/2008)

Farmer: a natural person, legal entity or organization without a legal entity who or which

pursues the agricultural activity in an area defined in Point a), Section (1), Article 4 of

regulation (EU) No. 1307/2013 of the European Parliament and of the Council establishing

rules for direct payments to farmers under support schemes within the framework of the

common agricultural policy and repealing Council Regulation (EC) No. 637/2008 and

Council Regulation (EC) No. 73/2009 adopted on December 17, 2013 (hereinafter referred to

as: regulation (EU) No. 1307/2013)

Area temporarily used for non-agricultural purposes: an area defined in Section (3), Article

32 of regulation (EU) No. 1307/2013 of the European Parliament and of the Council

establishing rules for direct payments to farmers under support schemes within the framework

of the common agricultural policy and repealing Council Regulation (EC) No. 637/2008 and

Council Regulation (EC) No. 73/2009 adopted on December 17, 2013 (hereinafter referred to

as: regulation (EU) No. 1307/2013)

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Reference area:

a specific physical block,

a supportable area of a specific physical block,

a non-supportable area of a specific physical block,

a uniformly cultivated area,

the area of a specific thematic map layer,

ecologically significant area delimited in MePAR

Size of reference area:

the size of a specific physical block,

the size of the supportable area of a specific physical block,

the size of the non-supportable area of a specific physical block,

the size of the uniformly cultivated land area measured during the on-site inspection,

the size of the area of thematic map layers,

the size of an ecologically significant area delimited in MePAR

Current year: the calendar year of the support period with regard to which the farmer fulfils

the conditions for receiving support and applies for support, or in which the historic

entitlement and the supplementary historic entitlement that are the basis for payment are

available to the beneficiary

Supportable area: an area defined in Sections (2)-(6), Article 32 of regulation (EU) No.

1307/2013, which meets all the criteria for support

Productive area: an agricultural land parcel where at least 50% of the plants are capable of

producing yield

Breeding farm: a breeding farm entered into the register under the decree of the Ministry of

Agriculture and Rural Development on the national system of registration for cattle raising

sites, breeding farms and the related specific data (decree No. 119/2007)

Aid decoupled from production: a type of aid the basis for which is the historic base available

to the farmer

Aid linked to production: a type of aid the criterion for receiving which is the keeping of a

supportable animal as set out in this decree

Historic base: the measure of a production unit defined for a reference period (the number of

animals, area, ton, kg), which is the basis for aid decoupled from production

Historic entitlement: an agricultural right representing assets established based on the client’s

historic base

4.8. Single area payment

Regarding any issues not regulated in the decree, it is the provisions set out in the Uniform

Application Act and the decree on the rules of using the direct payment to be provided to

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farmers that are to be applied for the submission and assessment of the applications for single

area payment.

Pursuant to the decree, it is the supportable areas that should be regarded as areas serving as

the basis for single area payment.

Support amounts can only be paid on the basis of an application for single area payment if the

supportable area indicated in the application for single area payment reaches or exceeds 1

hectare. If the supportable area consists of several reported land blocks, the supportable area

of the individual reported land blocks should reach 0.25 hectare.

In establishing the area serving as the basis for single area payment, the area that cannot be

considered as one serving as the basis for receiving the possible aids under the Uniform

Application Act cannot be taken into account.

It is only on the basis of an application for single area payment that support amounts can be

paid for the same reported land block.

As regards supportability, the period for utilization for other than agricultural purposes in the

case of areas which are temporarily used for non-agricultural purposes should be chosen in

such a way that this should not jeopardize the primary agricultural activity and its duration

should not exceed sixty days per year. The duration and nature of non-agricultural activities

should be reported by the lawful land user farmer to the Agricultural and Rural Development

Agency within ten days after starting such activity, in the electronic form regularly used by

ARDA.

Arable lands can only be used temporarily for other purposes other than the vegetation

periods of the plant crops reported and indicated in the uniform application. The following do

not qualify as areas temporarily used for non-agricultural purposes:

a lawn area used for sports and recreation,

military practice site,

an area used for leisure time activities.

If repeated and intentional non-compliance is established in relation to the supportable area

under the single area payment system with regard to Points 7 and 8 of Appendix 1 of Decree

No. 50 of 2008 (IV. 24.) FVM of the Ministry of Agriculture and Rural Development laying

down requirements for the conservation of the “Good Agricultural and Environmental

Condition” to be complied with for the application for subsidies under the single area

payment system and certain subsidies of rural development, and determining the conversion

rate of animals into livestock unit, such area will become delimited as a non-supportable area

in the Agricultural Land Parcel Identification System by March 1 of the calendar year that

follows the establishment of this repeated and intentional non-compliance. If the area

concerned meets the relevant statutory requirements again, it can be qualified back to a

supportable area in line with the provisions set out in the decree on the Agricultural Land

Parcel Identification System.

The extent of support is determined in the ministerial decree on the support amounts related to

the individual legal titles.

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The maximum amount of the single area payment that can be made to a farmer for a specific

year based on the authorization given to the member state in question in Section (1), Article

11 of regulation (EU) No. 1307/2013 is 176,000 euros.

Based on the authorization given to the member state in Section (1), Article 11 of regulation

(EU) No. 1307/2013, if the amount of the single area payment that is to be made to the farmer

for the year in question exceeds 150,000 euros, then the part of the single area payment that

exceeds 150,000 euros will be reduced by 5% of the part exceeding 150,000 euros.

The support amounts should be determined as set out in Section (3), Article 6 of Commission

Implementing Regulation (EU) No 809/2014 of 17 July 2014 laying down rules for the

application of Regulation (EU) No 1306/2013 of the European Parliament and of the Council

with regard to the integrated administration and control system, rural development measures

and cross compliance (hereinafter referred to as: regulation (EU) No 809/2014).

The resolution on the subject of the single area payment should contain the following:

the size of the area claimed in the application for single area payment,

the size of the area established on the basis of the inspections,

the size of the supportable area,

the support amount that the farmer is entitled to, and

the applied legal consequences, according to the EU legal acts.

4.9. Transitional national subsidy related to the single area payment scheme

A transitional national subsidy related to the single area payment scheme can be used under

the following legal titles:

a) supporting the raising of fattened bulls,

b) milk subsidy,

c) subsidy provided for keeping suckler cows,

d) subsidy provided for,

e) subsidy provided for keeping ewes,

f) subsidy provided for keeping ewes in areas with unfavourable characteristics,

g) supporting the growing of Burley tobacco,

h) supporting the growing of Virginia tobacco.

On the basis of the legal titles in Points a), b), d), f), g) and h), support decoupled from

production, while on the basis of the legal titles in Points c), e), support linked to production

can be used.

Transitional national subsidies can be provided for the following at most:

the area indicated in the uniform application,

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it can be established based on the number of animals indicated in the application for

support, by taking the upper limit of the client’s individual support, as well as the

historic entitlement and supplementary historic entitlement specified in ARDA’s

registry into account.

4.9.1. Supporting the raising of fattened bulls

The aid provided for the raising of fattened bulls is determined on the basis of historic

entitlement and supplementary historic entitlement, decoupled from production. A farmer is

entitled to receive support on the basis of the available individual historic entitlement at the

extent defined in the Quantity Decree. A farmer is not obliged to raise fattened bulls if they

use this support.

4.9.2. Milk subsidy

The milk subsidy is determined on the basis of historic entitlement, decoupled from

production. A farmer is entitled to receive support on the basis of the individual historic

entitlement at the extent defined in the Quantity Decree. A farmer is not obliged to produce

milk if they use this support.

4.9.3. Subsidy provided for keeping suckler cows

In the case of keeping suckler cows, it is the aid linked to production defined in the Quantity

Decree that can be used. The aid related to keeping suckler cows is defined on one occasion,

by individual animal, by calendar year and farmer, by taking the upper limit of individual

support into account.

4.9.4. Subsidy provided for keeping extensification cattle

The subsidy provided for keeping extensification cattle is determined on the basis of historic

entitlement, decoupled from production. A farmer is entitled to receive support on the basis of

the individual historic entitlement at the extent defined in the Quantity Decree. A farmer is

not obliged to keep extensification cattle if they use this support.

4.9.5. Subsidy provided for keeping ewes

The subsidy for keeping ewes can be used for each ewe, linked to production, to the extent

defined in the Quantity Decree. A farmer is obliged to keep ewes. The aid related to keeping

ewes is defined on one occasion, by individual animal, by calendar year and farmer, by taking

the upper limit of individual support into account. The minimum supportable animal number

is ten individuals.

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4.9.6. Subsidy provided for keeping ewes in areas with unfavourable characteristics

The subsidy provided for keeping ewes in areas with unfavourable characteristics is

determined on the basis of historic entitlement, decoupled from production. A farmer is

entitled to receive support on the basis of the individual historic entitlement at the extent

defined in the Quantity Decree. The supplementary aid for keeping ewes in areas with

unfavourable characteristics can only be used up to the eligible animal number serving as the

basis for defining the amount of subsidy provided for keeping ewes linked to production

regulated by the valid FM (Ministry of Agriculture) decree (No. 5/2015).

4.9.7. Supporting the growing of tobacco

The support provided for growing Burley and Virginia tobacco is determined on the basis of

historic entitlement, decoupled from production. A farmer taking part in the structural

transformation scheme under Section 3 of FM (Ministry of Agriculture) decree 53/2015. (IX.

14.) on the national tobacco structural transformation scheme and the definition of the criteria

for receiving the related low amount subsidies (hereinafter referred to as: the Structural

Transformation Decree) will be entitled to receive support on the basis of the individual

historic entitlement at the extent defined in the Quantity Decree. If the historic entitlement is

assigned in the current year, the recipient will become eligible to support, if the other

conditions of receiving the support amount are fulfilled.

4.10. Procedural rules of the transitional national subsidy

In the case of the support legal titles as listed in Points a), b), d), f), g) and h) of the

transitional national subsidy related to the single area payment, the entitlement to support is

established by ARDA from the register that it keeps, based on the historic entitlement and

supplementary historic entitlement available to the farmer in the current year.

In the case of the support legal titles as listed in Points c) and e) of the transitional national

subsidy related to the single area payment, the applications for support should be submitted to

ARDA electronically, through the client gate on the Uniform Application Platform.

In the case of the transitional national subsidy related to the single area payment, the

resolution (including the decisions made for aid decoupled from production) on support

should include the following:

the area claimed in the context of the specific support legal title, the animal number,

the historic entitlement, the supplementary historic entitlement,

the area serving as the basis for the support, the animal number, the historic

entitlement or the supplementary historic entitlement, or the upper limit of the

individual support, and

the amount of support, the extent of redistribution applied during the calculation

thereof and the factors contributing to the reductions of the support amount.

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4.11. Data supply obligation

Pursuant to the provisions set out in Article 9 of regulation (EU) No. 809/2014, the Member

States have a data supply obligation for the prior calendar year, which should be fulfilled by

July 15 each year. The inspection data and statistics should be supplied electronically via the

e-Damis system according to the technical requirements set by the Commission.

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