Managing Competitiveness in Food Production Towards EU Accession (Hungarian Case Study)

Hungarian companies in the food sector operate in an increasingly competitive domestic and international environment. These competitive forces will gather strength upon Hungary's integration into the European Union. Increasing management performance, quality enhancement, cost cutting and timely response to signals of a booming market are elemental interests of each Hungarian agri-business that wishes to be successful. The competitiveness of Hungarian food production is decisive factor of the agricultural policy. The competitiveness of food processing depends heavily on the level of development of raw material production. Food processing requires a solid agricultural base capable of producing high volumes of top quality raw material. The reverse side of this influence is also at play. High quality and efficient food processing capable of producing goods that meet world market requirements is a major driving force in the improvement of the competitiveness of agriculture. The position of agricultural producers and conditions of their operation are basically determined by the processing industry The future of Hungarian food production and specially of the three livestock (meat, poultry and dairy) branches studied depends on attaining higher levels of competitiveness. That requires continuous improvement of the performance of these branches and the related production of raw material. Increasing competitive capacity in the marketplace hinges on the level of understanding and meeting consumer requirements, on implementing best practice solutions in production, on improving productivity and on developing innovative products and cost saving methods of processing. Collaboration between the private sector, state agencies, and universities will be beneficial in bringing high-tech equipment and processing and marketing techniques. New products and new technology could be initiated by a stronger collaboration between state agencies, universities, research centers and the private sector. Contractual arrangement to develop new products or new packaging or new processing techniques would need multiplied. Large chains of super and hyper-markets have emerged in the early 90s, soon after the launching of economic reforms. Entrepreneurs in the food industry already know how the demands of retail industry. The absence of trade barriers for food products between Hungary and the EU after accession will call for an even more proactive new strategy to be developed by Hungarian food processors. The study using the methodology of the analysis is benchmarking, that is, a comparison at sector level, by taking into account the structures of the most developed EU countries and Hungary. Benchmarking is one of the means of furthering the above objectives as it aims at identifying and adopting superior business solutions that help realize competitive levels of performance. Benchmarking produces development programs and strategies that allow the application of these best practices of operation. The conclusions can drive the management decisions for agricultural enterprises.