E. Europe's Neglect Of Farmers Sows New Seeds of Dissent

WITH soil this rich, farmer Gabor Noniusz could be forgiven for thinking he should be wealthy.

But he's not, and while his land has great potential, many farmers like him have never had it so rough. As manager of the agricultural cooperative in Pusztaszabolcs, a village of 6,500 southwest of Budapest, Mr. Noniusz says the past four years ``was the toughest period of my life.''

Since 1989, he and millions of other farmers across Eastern Europe have had to adapt to the collapse of the East bloc's trading system, a reduction in subsidies, an overhaul of land ownership, and a drought that has led to residential water rationing across Bulgaria and ranks as one of the worst in Hungarian history.

Noniusz has squeaked through these challenges - barely. ``There was bad weather, drought, and everything else on top,'' he says. ``It was hard on everybody. Our goal was simply to survive the transition period.''

Good relations between prewar landowners and latter-day cooperative members allowed Noniusz to compensate those whose property was nationalized without destroying the farm. After shedding nearly 20 percent of its cropland and 40 percent of its work force, the farm is recovering.

But Noniusz's case is exceptional. While some cities glitter as emerging capitalist success stories, vast swaths of Eastern Europe's population lag behind, largely because rural areas are not a priority for reformists.

``People in the countryside are suffering. They can't earn enough to sustain themselves,'' says agricultural economist Csaba Forgacs of the Budapest University of Economics.

But agriculture could help lift eastern countries out of poverty. At the start of the decade, agriculture and the food industry accounted for a fifth of the gross domestic product in Hungary, Romania, and Bulgaria.

Agriculture ``could serve as an experiment on how to go about integrating with the European economy,'' says Mr. Forgacs. ``The chance of Hungary successfully becoming a full member of the European Union will decrease if agriculture isn't allowed to play a role in the process.''

Aspirations for EU membership aside, an estimated 5-10 percent of Eastern Europeans, as much as 10 million people, depend directly on agriculture to survive.

Skyrocketing unemployment in agriculture - almost 50 percent in Bulgaria and Hungary - has brought discontent to rural areas. In Poland, Slovakia, Hungary, and Bulgaria, the rural vote has helped return ex-communists to power in elections.

Production of agricultural goods has declined by 20-30 percent in recent years. Much of Hungary's rich cropland lies fallow, and the countryside is littered with abandoned farm buildings.

``The government announced it would return land to original owners,'' says Forgacs. ``The process has taken years, and all that time the cooperatives weren't farming land because they couldn't be sure if they really owned it.''

The EU is encouraging Eastern European countries to work toward joining, but its trade and agriculture policy is beating them back. The EU represents 57 percent of Hungarian exports - about $3 billion annually. But last year Hungary had a $1 billion agricultural trade deficit.

The reason: The EU gives producers subsidies - almost 50 percent of cost - that allow them to undercut Eastern European prices. Hungarian farmers receive only a 7 percent subsidy, almost the world's lowest.

``Hungarian products are being displaced on the domestic market by EU imports,'' says Rifat Barokas, country director for Agricultural Cooperative Development International (ADCI), a US government-supported nonprofit group based in Washington. ``Now they're starting to institute countermeasures, but in a trade dispute, the weaker player is in a poor bargaining position.''

But private enterprises and restructured cooperatives are recovering. The Pusztaszabolcs cooperative formed a joint venture with a US investor last year to produce high-quality popcorn kernels, and sold the first crop for a healthy profit.

``The seeds we used turned out to be drought-resistant,'' says Noniusz, who found a US partner with ACDI assistance. ``We're expanding production next year.''