It is estimated that there are around 180 mills producing flour in Austria. The amount of flour produced by these mills working with the capacity of 80 per cent exceeds 500 thousand tons. And in Hungary, there are around 40 firms and 60 mills processing grains. One out of four of the firms in question is estimated to carry out more than 80 per cent of the flour production in the country. A small European country with the land area of 83 thousand km2 and the population of 8,5 million people, Austria is land-locked country and borders Germany and Czech Republic to the North, Slovakia and Hungary to the East, Slovenia and Italy to the South and Switzerland and Liechtenstein to the West. The strategic geographic location of the country provides an advantage commercially and taking the historical connection into account; Austria is the closest Western trade partner for especially the Eastern European countries. The land area of Hungary is 93 thousand km2. Home to 10 million people, Hungary’s capital city is Budapest. Most of the territories of the country is formed by fertile lands allowing a large variety of products to be grown. 63% of the lands is suitable for agricultural production. This percentage increases up to 83% including the forestry and fishery. Hungary borders Austria and Slovenia to the West, Slovakia to the North, Romania and Ukraine to the East and Serbia and Croatia to the South. The country is a member of OECD, NATO, EU, Visegrád Group and Schengen area. GENERAL ECONOMIC OUTLOOK Considered as one of the poorest countries in Europe after the Second World War, Austria has succeeded to become one of the most prosperous countries of the world over the last 20 years. With the Marshall Plan came into effect in 1948, Austria was aimed at being turned into an independent economy. The industrial sector of the country was formed by financial state enterprises. While the Austrian economy has highly been diversified, the services sector creates two out of three of the added-value and the employment. In contrast to other developed countries, the industry sector in Austria preserved its share in the total output and formed 28,6% of the entire Total Domestic Product in 2014. The agriculture sector forms 1,5% of the output acquired from the total of the economic activities. Hungary is the country that has the most open economy in the region with its significant sectors tightly connected to Europe through commerce and foreign investments. The domestic market of the country is comparatively small. However, the country’s economy is still in the 3rd place after Poland and Czech Republic in the region in terms of its size. Three out of four of the commodity exportation is towards the EU countries. Strong demands from the EU countries directly affect the country’s economy. Looking at the fundamental macroeconomic data recorded in 2014; the Gross Domestic Product (GDP) is 137 billion dollars. Analysing the composition of GDP; the greatest share is supplied by the production sector, mainly producing for exportation. POSITION AND IMPORTANCE OF AGRICULTURE Main cultivated areas of Austria are the plains, located by the Danube River in the North of Alps and stretching across the eastern border of the country. Agriculture in Austria is continued to be carried out in small scale. On the other hand, as the small-scaled farms have to withdraw from the production over the last decade, a regular inclination has emerged towards bigger-scaled agricultural production units. 13% of the cultivated areas is utilized by organic farms, the number of which is around 20.000, and this makes Austria one of the biggest producers in Europe in terms of organic agricultural production per head. The number of agricultural enterprises of Austria has decreased %20 after the membership to EU. 1,35 million hectares used for agricultural purposes are available in Austria as of 2014 and this area equals to 16,1% of the total land area of Austria. 59,9% of the cultivated areas was used for grain production in 2014. Agriculture and viticulture have traditionally a significant position in the economy of Hungary, which has convenient climate and fertile lands. The country is self-contained in terms of many agricultural products. A regular and robust increase has been experienced in the exportation of agriculture products. The basic products are wheat, corn, dough, sunflower seed, sugar beet and various vegetables and fruits. Hungary has an agricultural land of 5,9 million hectares, which constitutes 63% of the land area of the country. 75% of the cultivated area, which increases to 7,7 million hectares including forests, belongs to private owners. On 45% of the cultivated areas; production was performed by organizations such as companies or cooperatives. GRAIN PRODUCTION IN AUSTRIA According to the data of the UN and the Food and Agriculture Organization, FAO; most produced grain products are corn and wheat. The highest production amount over the last 10 seasons was accomplished in 2012/13 season with 2,351 million tons. Having produced 1,6 million tons of corn in 2013/14 season, Austria increased this amount in 2014/15 season and acquired 2,334 million tons of corn production. Wheat production of Austria in the last 10 seasons does not reach 2 million tons. The country produced 1,275 million tons of wheat in 2012/13 season and this amount increased to 1,597 million tons in 2013/14 season. The production amount in 2014/15 season reached the highest amount of the last 10 seasons with 1,804 million tons. Other grain product which is produced in high quantities is dough. The dough production in the last 10 seasons differed from 600 thousand to 900 thousand tons. The highest production amount was acquired in 2006/07 season with 914 thousand tons. The production in 2014/15 season is 845 thousand tons. Other grain products produced in the country are rye, oat, millet and sorghum. The highest rye production in the last 10 years was accomplished in 2013/14 season with 234 thousand tons; and the highest oat, sorghum and millet production was accomplished in 2013/14, 2015/15 and 2009/10 seasons with the production amounts of 109 thousand tons, 18 thousand tons and 20 thousand tons, respectively. GRAIN PRODUCTION IN HUNGARY According to the data of the Food and Agriculture Organization of the United Nations; grain products produced with the highest amounts in the country are corn and wheat as in Austria. Having produced 4,762 tons of corn in 2012/13 season, Austria increased this amount in 2013 season and accomplished 6,756 million tons of corn. The highest production amount accomplished in the last 10 seasons is 9,315 million tons in 2014/15 season. The wheat that Austria produced over the last 10 seasons does not exceed 5,6 million tons. 4 million tons of wheat was produced in 2012/13 season and this amount increased to 5 million tons in 2013/14 season. This production amount in 2014/15 season was 5,261 million tons. And with the production amount of 5,630 million tons in 2008/09 season, the highest production amount was accomplished. The other grain product which is produced in Austria more than 1 million tons is dough. The dough production over the last 10 seasons was around 1 million tons. The highest production amount was accomplished in 2014/15 season with 1,274 million tons. Other grain product produced in the country are oat, rye, sorghum, rice and millet. While the highest oat production was accomplished in 2008/09 season with 181 thousand tons over the last 10 seasons; the highest rye, sorghum, millet and rice production was in 2008/09 season with 112 thousand tons; in 2014/15 season with 19 thousand tons; in 2010/11 season with 17 thousand tons; and in 2009/10 season with 11 thousand tons, respectively. GRAIN TRADE IN AUSTRIA AND HUNGARY The leading product of Austria in the grain trade is wheat. According to FAO data; the country exported approximately 550 thousand tons between 2006/07 and 2009/10 seasons and this amount increased to 710 thousand tons in 2010/11 season. Having started to decrease again, the wheat exportation decreased to 619 thousand tons in 2011/12 season and to 587 thousand tons in 2012/13 season. The wheat exportation in 2013/14 season was 543 thousand tons. Another leading export product of Austria is corn. Approximately 360 thousand tons of corn was exported between 2005/06 and 2007/08 seasons. 360 thousand tons of corn was exported between 2005/06 and 2007/08 seasons. Corn exportation, which was approximately 450 thousand tons between 2008/09 and 2009/10 seasons, started to decrease again in 2010/11 and 2011/12 seasons and happened to be 320 thousand and 361 thousand tons, respectively. Wheat exportation of Austria reached the highest level of 9 seasons in 2012/13 season with 536 thousand tons and 450 thousand tons of wheat was exported in 2013/14 season. Other exported grains are dough, rice, rye and oat. Products in question are exported in small quantities. 77 thousand tons of dough, 3 thousand tons of rice, 10 thousand tons of rye and 9 thousand tons of oat were exported in 2013/14 season. The leading products of Austrian grain importation are corn and wheat. According to FAO data; 400 thousand tons of corn was imported between 2005/07 and 2009/10 seasons and this amount increased to 617 thousand tons in 2010/11 season. Having increased to 805 thousand tons, the corn importation decreased to 621 thousand tons in 2012/13 season. In 2013/14 season, 920 thousand tons of corn was imported. Another important import product is wheat. 200-300 thousand tons of wheat was imported between 2005/06 and 2008/09 seasons and this amount started to increase as of 2009/10 season and exceeded 500 thousand tons. The wheat importation in 2013/14 season was 581 thousand tons. Another import product is dough. Dough importation was in quantities not exceeding 200 thousand tons in 2005/06 and 2013/14 seasons. The highest importation was in 2013/14 season with 198 thousand tons. The leading product in the grain trade of Hungary is corn. According to FAO data; the corn exportation quantities of the country fluctuated between 1,8 and 4,9 million tons over the last 10 seasons. The highest exportation amount was accomplished in 2009/10 season with 4,9 million tons. Having been 3,3 million tons in the next season, the exportation quantity increased to 4,1 million tons in 2009/10 season. Even though the corn exportation quantity, which decreased below 4 million tons in 2010/11 and 2011/12 seasons, increased to 4,3 million tons in 2012/13 season; 2,1 million tons of corn was exported in 2013/14 season. Another important export product of Hungary is wheat. The wheat exportation of the country differed from 1,2 million to 1,3 million tons over the last 10 seasons. The wheat exportation, which was between 1,2 and 1,3 million tons in 2011/12 and 2012/13 seasons, was recorded to be 2,4 million tons in 2013/14 season. Another important exportation product is dough. The dough exportation was recorded to be 522 thousand tons in 2011/12 season; 299 thousand tons in 2012/13 season and 455 thousand tons in 2013/14 season. The leading product in the grain importation of Hungary is corn. According to the data regarding corn importation; the amounts started to increase as of 2011/12 season and exceeded 100 thousand tons. Having been recorded to be 146 thousand tons in 2012/13 season, the corn importation was 131 thousand tons in 2013/14 season. Corn is followed by wheat in terms of importation. The wheat importation is below 100 thousand tons. The wheat importation actualized in 2013/14 season was 73 thousand tons. FLOUR MILLING IN AUSTRIA AND HUNGARY It is estimated that there are around 180 mills producing flour in Austria. The amount of flour produced by these mills working with the capacity of 80 per cent exceeds 500 thousand tons. According to FAO data; the flour exportation of the country increased between the seasons of 2005/06 and 2013/14. Having exceeded 90 thousand tons in 2010/11 season, the flour exportation reached the highest level of the last 9 seasons with 98 thousand tons in 2011/12 season. The flour exportation, which started to decrease as of this date, was recorded to be 93 thousand tons in 2012/13 and 90 thousand tons in 2013/14 season. Austrian flour importation quantities gradually increase. Having reached 89 thousand tons in 2011/12 season, the flour importation decreased down to 83 thousand tons and was recorded to 91 thousand tons in 2013/14 season. In Hungary, there are around 40 firms and 60 mills processing grains. One out of four of the firms in question is estimated to carry out more than 80 per cent of the flour production in the country. The flour exportation quantities of Hungary gradually increase. The exported amount of flour in 2013/14 season is 189 thousand tons. The highest flour importation amount of Hungary over the last 9 seasons was accomplished in 2011/12 season with 79 thousand tons. The imported flour amount in 2012/13 was 75 thousand tons and this amount decreased down to 40 thousand tons in 2014/14 season.