The situation of the Hungarian social and solidarity economy is embryonic and underdeveloped compared with West European countries. This is because the cooperative movement has historically been a reaction or a defense mechanism against pauperism and the liberal economic system in West countries; it is still considered as a very progressive way of organizing production and consumption. In Hungary the forced cooperative movement imposed during the socialist period was followed by a reaction after the fall of the regime.

There are still many negative perceptions linked to the concept of cooperatives. This is particularly true in rural areas and of agricultural cooperatives. Before 1989, about 14,2% of agricultural land was owned by private owners, 14,9% by the State, and 70,9% (approximately 5,7 million hectares) was owned by co-operatives. After the political changes occurred in the 90’s, over 5.1 million hectares of arable land and forest was privatized, creating about 2.6 million new parcels of land and an estimated 1.8 million new owners. But there are only about 50,000 farmers in Hungary with enough acreage for crop farming. A large number of agricultural cooperatives were liquidated, which resulted in a decrease in production – a fact aggravated by the loss of the former socialist markets – and la high rate of unemployment in rural areas. The current social and solidarity Hungarian economy is dominated by the so-called social cooperatives. They are cooperatives of at least 7 members whose main activity is to create work opportunities for the disadvantaged. Under cooperative law and other related regulations (accounting law, taxation law, etc), they are considered to be for-profit enterprise. Most of them are, or have at some point been subsidized by public funds. However, there are claims that even those social cooperatives that received significant grants from national and EU budgets for their launch have been abandoned, and their long-term sustainability does not seem to be ensured. Typical activities of social cooperatives are: outsourced local government services (gardening, cleaning, playground maintenance); services provided to the local community (laundry services, household and garden maintenance, transportation to/from work); care of the elderly; childcare (family, kindergarten and nanny services, free-time programs, clubs, handicraft activities, a wide variety of summer camps); traditional handicraft production; food processing (jams, syrups, dried fruit, sunflower and pumpkin seed oil); wood industry activities (carpentry, garden furniture production, collection of agricultural and wood production waste, production of biomass and biobriquets); construction or social groceries. It is their dual purpose – economic and social – that provides them with their legitimacy: they are designed to produce economic results and to employ the disadvantaged. Pol Vidal Executive Secretary, RIPESS-Europe