The Poultry Slaughter and Processor Industry
| The Integrated Poultry Industry |
At this stage, so-called complete integration - whereby all production processes, from beginning to end, are in the same hands - is lacking in Hungary. Instead, there is a vertical structure held together by ownership links and relationships which best reflect common economic interests. The highest level of integration that the industry is striving to achieve is necessarily found where the whole vertical integration is operated with the participation of foreign capital [S Ga Foods Baromfiipari Rt. (S G Foods Poultry Industry Ltd.)]. S rv r has been able to integrate the feed sector too, but the interest driven integration of the feed industry is yet to take place in most cases.
Commercial relations are also undergoing transformation and vertical integration will not settle down until trading is carried out as an operation in its own right within the structure of large-scale and modern integrations comprising the whole vertical integration. In addition, sectoral integration is also an important concern in Hungary.The principal task of sectoral integration is to gather, store and circulate reliable information and also to provide the effective representation of common sectoral interests. Within this, it is very important to mointain relations with government institutions, advise on questions of agricultural legislation and to help develop legislation concerning matters within their competence. An additional task is interest representation at international level: that is, in connection with the process of transition towards EU legislation and norms. (Here we refer to the changing quota system introduced under the Partnership Convention.) The system regulates wellestablished economic relations and existing positions and is mutually beneficial for EU and Hungarian partners. 
The financing of this fundamental function of integration is today the responsibility of the slaughtering plants. Under this scheme, the terms of financing are stipulated at the time of the signing of basic material production contracts. As a rule, prefinancing is provided for day-old chicks and feed, other costs being born by the producer, and settlement under the contract is carried out upon completion of individual rotations. Hardly any traditional producers within the vertical integration have both full capacity and the means for self-financing. Producers of animals for slaughter are practically engaged in fattening on a contract basis and commission work, for which they receive an agreed payment.As will be clear from the above, complete integration is under way in Hungary, something in which international investors could play an important role. |
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