Technological progress can provide several solutions to the most significant challenges faced by agriculture. Precision agriculture (PA) technologies have been recognised as one of the rare win-win solutions for environmental and socio-economic goals. Although they have been available for decades, their diffusion progresses at a slow rate. Therefore, in recent years, precision farming has been receiving more attention from agricultural economists. Perceptions of Hungarian FADN arable farms about precision farming were collected through a survey in order to compare with cost-benefit analyses. The survey not only revealed the details of the application of different technologies but also their impacts perceived compared to a baseline situation. For the main crops, the results confirmed that precision farming leads to increasing yields and has profitability benefits compared to conventional farming. According to the respondents, the high investment cost is the main barrier to diffusion, while subsidies and more appropriate information could foster it. Therefore, a specific subsidy package implemented both in the ‘greening’ component and in the Rural Development Programme of the European Union’s Common Agricultural Policy would be a stimulating factor for the wider spread of PA.

Hungarian cereal production is situated in the zone of Europe which is most vulnerable to the effects of changes in climatic conditions. The objectives of this paper are to present the calibration and validation of the 4M crop simulation model using farm-level observed representative values, and to estimate the potential yields of winter wheat and maize production for the next three decades. Analysing the differences between the estimated and observed yields, we identified as key influencing factors the heterogeneity of technologies and of land quality. A trend of slightly decreasing yields is projected for the next three decades for both cereals. The precise impact of environmental change on crop yields will depend on which climate scenario occurs.

This paper examines the effects of territorial differentiation of damage to wheat, maize, barley, sunflower and rapeseed production caused by drought and heavy rain. Our study evaluated the differences between LAU1 micro-regions in Hungary in the effects of the weather on agricultural production and found that there are extremely high differences in the probabilities of damage occurring. Therefore the design of agricultural insurance products should be based on different absolute deductibles and different insurance premiums for micro-regions. Furthermore, we found that within a micro-region individual producers face a very high diversity of risks which implies that in the long term only a bonus-malus system developed for individual agricultural producers can mitigate different risks, and that this can be the basis of a well performing risk management system that is suitable for a wide risk community.