From the 2026 budget audit
Your tax pays for irrigation equipment on someone else's farm.
3.5 billion Ft a year subsidises on-farm irrigation — a private capital improvement whose productivity gain accrues to the landholder, paid for by every taxpayer.
Roughly 879 Ft per taxpayer per year — 3,515 million Ft total, overwhelmingly capital — to fund an improvement that increases the value of private agricultural land.
What you see — and what you don't
The seen: irrigation infrastructure installed on agricultural holdings, raising yields and land values. The unseen: the urban wage-earner whose payroll taxes fund a capital improvement to a private asset they will never own — while the landholder captures the full productivity gain.
Objection
"Without irrigation support, smaller farms cannot afford to adapt to drier summers — and food security suffers."
Answer
A farm that installs irrigation captures higher yields and a higher land value — those gains are the return that makes the investment worth financing privately. Agricultural credit, retained earnings, and supplier finance are the ordinary channels for on-farm capital. The subsidy transfers the cost of a private asset to the general taxpayer while the landholder retains the full gain.
Share if you think private farmland improvements should be financed by the farm, not the taxpayer.
The analyst's verdict
Irrigation-use development
Rationale
This line subsidises the development of irrigation capacity — overwhelmingly a capital line (3,434.5 millió Ft of 3,514.9). Irrigation infrastructure on agricultural land is a private capital good: it raises the productivity and value of the holding it serves, and the gain accrues to the landholder. A farm that installs irrigation captures the higher yield; there is no reason the cost of that private capital improvement should fall on the general taxpayer rather than on the landholder, who can finance it through the same channels — retained earnings, agricultural credit, supplier finance — that fund every other on-farm investment. The subsidy concentrates benefit on the landholders who receive it while spreading the cost across all taxpayers, including the urban wage-earner whose payroll taxes fund a capital improvement to a private asset they will never own. Phase out over five years to let in-flight projects and multi-year commitments run their course; new capital subsidy stops.
Transition mechanism
Linear phase-out over 5 years. The horizon honours irrigation projects already approved and part-built under prior commitments — those run to completion — while no new capital-subsidy approvals are issued. By Year 5 the line is at zero; farm irrigation investment is financed privately thereafter.
Affected groups
Landholders who would otherwise receive irrigation capital subsidy — they retain the option to invest, financed privately, and keep the full productivity gain. In-flight project counterparties are protected by the run-off horizon.
Free Society Institute
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