Growing pains in the puszta

The British investors couldn't lose - 15,000 arable Hungarian acres going cheap. But then the great bustards landed...

When Stuart Knight gave up managing a modest farm in Gloucestershire to take on the challenge of a 15,000-acre chunk of the puszta - the Great Plain of Hungary - he anticipated difficulties.

For a start, he didn't speak a word of Hungarian. The farm he was taking on - a former state collective - was poorly equipped and hopelessly inefficient. The 100-strong workforce was mistrustful and unco-operative. But the last thing he expected was a bruising encounter with the great bustard, a bird he had never heard of.

Mr Knight's first awareness of the bustard came late last year when local nature conservationists wrote ordering him to stop cultivating about a third of his newly-acquired acres because they were part of the endangered bird's core mating and nesting area and were subject to a restriction order.

The letter was "a tremendous shock", said Mr Knight. "Naturally prior to purchase we had tried to find out whether there were any restrictions on the land and had been assured there were none."

Mr Knight's anger was shared by all five of the British investors who originally took the decision to spend more than pounds 2m buying the land in Hungary, and who had drawn up their business plan on the basis of being able to farm nearly all of it. Having first felt they had picked up a bargain, they suddenly had doubts.

Investigation revealed that the managing director of the Hungarian company from whom they had bought the farm had indeed given a written assurance that he would not plough the land where the bustards were nesting. He just hadn't mentioned it to them, they said.

To make matters worse, the British farmers then found themselves being cited in the Hungarian parliament as an example of rapacious foreigners riding roughshod over the country's wildlife heritage.

If the disadvantages of farming in Hungary caught Mr Knight and his partners by surprise, the advantages did not. After clearing the debts of the bankrupt business from which they bought the farm (and paying a firm of solicitors in Budapest a six-figure sum to ensure that no pre-communist owner was going to appear and reclaim the property), Mr Knight and his partners acquired their land in Biharkeresztes for just pounds 150 an acre. Not bad compared to around pounds 3,000 an acre they could expect to pay for choice bits of Gloucestershire.

Apart from the price, they were attracted to Hungary by its low wages (agricultural labourers are paid 50-75p an hour), the fertile black soil of the puszta and the tantalising prospect that within as little as five years the country could be joining the European Union.

"There was no way we could have acquired this amount of land in the UK," said Mr Knight. "It looked a no-lose proposition. In our first enthusiasm we thought we would be in profit within a year."

The reality has turned out to be slightly different. Like the Germans, Scandinavians and Austrians who have gone into farming in eastern Europe in a bigger way, the British investors at Biharkeresztes have discovered that turning round a former collective farm is a tall order. For a start they had to spend almost pounds 1m on state-of-the-art tractors, combine harvesters and seed drills. Then they had to confront communist-style work practices.

"When I first arrived labourers would be hanging around in the yard in the morning doing nothing until I told them," said Mr Knight. "Many of them were in Mickey Mouse-type jobs; by 10 o'clock some were already drunk. Stealing was rife: fertilisers, diesel fuel, seeds: they were all considered perks of the job."

The worst offenders were quickly dismissed, as, more gradually, were others who did not want to move with the times. The original workforce of 101 is now down to 58 and those who have remained have begun to acquire a new work ethic.

"After initial suspicion about me and what we were trying to do here, many of the men have now come round," said Mr Knight. "At first they didn't want the new machines - but when they saw what they could do they were won over."

Arable crops - wheat, maize, sugar beets and peas - are the farm's mainstay, but it also boasts a 450-strong dairy herd. The main market remains the internal Hungarian one, but Mr Knight and his partners are already looking further afield, in the short term towards Poland, the Baltic states and other former Soviet republics, and longer term to the lucrative EU markets.

"At the moment there are a lot of barriers to selling our produce in the EU, but when Hungary eventually joins the Union we will hopefully gain equal and fair access," said Mr Knight. "Realistically we now think we will begin to see a return on our investment in three to five years."

While many Hungarians remain strongly opposed to foreigners being allowed to own land here at all, the country's ruling Socialists recognise that, with sights set on joining the EU, Hungary's poorly structured agricultural sector could benefit from western know-how and investment. "It's good for us and it's good for you too!" enthused Sandor Oravecz, a senior figure in the agriculture ministry.

That said, the EU still feels a long way from the flatlands of the Hungarian puszta close to the borders with both Romania and Ukraine. Mr Knight admits that, for all his acres, he sometimes misses the cosiness of the Cotswolds.

He is, however, making progress - even on the vexed question of the great bustard. Although the bulk of the bird's grazing land remains uncultivated, the British farmers have persuaded the local nature conservationists to lift their objection to some of the land being ploughed and are hopeful that, eventually, they may even qualify for some form of compensation.

"Coming here has meant going through a steep learning curve," said Mr Knight, who has acquired a stake in the company managing the farm as part of the price for uprooting to Hungary. "Back home I was in danger of slipping into the 'comfy zone' - life had become too comfortable. I wanted a fresh challenge and certainly got it. I just hope it will prove to have been the right business decision."