The huge fields of wheat and corn around this farming center are a model of high productivity. Enterprising families in its Lenin Cooperative Farm are raising pigs for a tidy profit. Freewheeling managers have diversified into forestry, manufacturing and machinery repair and now are bankrolling a venture in computer software.
Hungary's reforms of its socialist economy have wrought dramatic and often welcome changes in the ways people work and earn here. Yet after four lean years and with a prospect of more austerity, even a community proud of its showcase status has little to celebrate.
"We are unable to grow as we planned," said Bela Szabo, president of the 21,000-acre Lenin Cooperative that shapes most economic activity here. "We haven't invested as much as we wanted. Conditions have gotten more difficult. World prices are down. Our costs are rising. The money's just not there for us."
Despite its diversification, high crop yields and opportunities for private enterprise, the Lenin Cooperative's profits have dropped 30 percent in the last four years and production has been below targets. The cooperative's new five-year plan calls for a 25 percent reduction in investment and no increase in crop harvests, despite a new series of incentives for agriculture planned by the government.
Like workers and planners around the nation, the businessmen and farmers here are discovering that years of austerity and market-oriented innovation have failed to create prosperity or the prospect of rapid economic development. Instead, Hungary seems to be stymied by the same obstacles of scarce resources, low efficiency and declining competitiveness that drove it to push ahead with the Soviet Bloc's most ambitious reform policies seven years ago.
"Everyone in Hungary can feel in their pockets how hard it is to make ends meet," said an official of the ruling Hungarian Socialist Workers Party, who asked not to be named. Added a western diplomat: "You have a perfect combination here for low growth, and that's not changing."
For most of the last five years, Hungary has had one of the lowest growth rates in Eastern Europe, and this year expansion has been all but halted by a sharp drop in exports and foreign earnings, a hard winter and a disappointing harvest. Real wages and living standards are declining again, continuing a trend dating to the late 1970s.
Moreover, Hungary's plan for the coming five years foresees only a modest 3 percent annual gain in output and even slimmer improvements in incomes for its 10 million people. Even those goals depend on a sharp increase in industrial efficiency and an expansion of exports that officials concede may be difficult to achieve.
As a result, government officials here say they are concerned that the continued hard times -- and increasing social unrest -- may discredit their restructuring of the economy. "We are convinced that without the reform moves our situation would be worse," said the Communist official. "But not all the strata of public opinion are convinced of that. For the population, you have the danger that the reform measures will be connected with the unpleasant effects of austerity on the people."
The fate of Hungary's reform program is particularly important because it has served as both a model and a test case for Soviet Bloc leaders seeking reform in their economic systems. Hungary's policies seek to loosen central government control of production and adopt some of the tools of capitalism by freeing prices, linking wages to productivity, encouraging profits and competition and allowing private enterprise in services and small industry.
At the root of the continuing trouble, say economists and govern-ment officials, are the classic ailments of a resource-poor country dependent on trade for growth and modernization and yet suffering from increasingly poor conditions in world markets. A relatively high foreign debt of $9 billion compounds the difficulties by forcing the country to seek a trade surplus, largely at the expense of imports and internal consumption.
The austerity of the last four years has allowed Hungary to increase its trade surplus and reduce its debts. At the same time, however, it has lost an estimated $600 million in world markets through declining prices for its products, and a steep fall in investments at home has prevented needed upgrading of factories or the production of better-selling goods.
The reforms, experts in Budapest say, have simply not been able to ease the choke on internal growth or halt the trend of Hungary's declining ability to compete. "One of the problems is that in this period since 1978 we have achieved relatively little in improving efficiency," said Tibor Antalpeter, director general of the Ministry of Foreign Trade. "Because we had to limit investment, it was impossible to introduce structural changes in industry."
While these barriers have primarily affected Hungary's trade with the West, developments in the Soviet Bloc have also worsened conditions. Like all Eastern European countries, Hungary is under pressure to export more to the Soviet Union while accepting a virtual freeze on Soviet supplies of energy and raw materials. Consequently, Hungarian officials are planning only a small increase in trade within the Soviet Bloc in the coming years and say they must depend on western trade to spur national growth.
Whether that growth will come, officials here said, will depend largely on the government's ability to earn more in its western trade and channel the funds into investments that will modernize factories and create new, more competitive export goods. "It is a very delicate tightrope act," Antalpeter said. "Our trade may be high enough to introduce a certain dynamism in the economy, but until we have some changes in the structure of the economy, low growth would seem to be the optimum."
Both the higher trade levels and the increases in investment, in turn, may depend on whether the internal reforms contribute more to efficiency and productivity than they have until now. Party leader Janos Kadar and other top officials have stressed that the liberalization of the economy will continue in the coming years, and officials say one major measure -- the introduction of competition into banking and credit -- may be introduced next year.
However, some economists and diplomats say the reform program may still be too cautious and gradual to produce the needed results. "A good case can be made that the slowness of growth is due not to the reform failing, but to it not being carried through," a western expert said. "Things have gone very slowly, and a lot of industry has not really been affected."
At the Lenin Cooperative, director Szabo expresses the challenge in the reform's own language. "Our prices are lower, so our task is to find ways to carry our production more effectively and with less costs," he said, "because the decisive factor here is profits."