Growing Mushrooms and Jobs in Hungary

In a remote corner of northeast Hungary in the village of Szendrolad, home to about 2000 people, of whom most are Roma, seasonal mushroom collection in the forest has been a tradition for many years. Now, a Roma NGO has turned this local tradition into a source of employment and income for the town. With assistance from the European Social Fund, pro bono help from accountancy firm KPMG, and direction from Open Society Foundations, the Bhim Rao Association, a Roma NGO, set up a mushroom factory in Szendrolad, which began operation in January of this year. The factory employs ten people at the moment and is already seeing interest build in both their produce and organization. Production in the factory can continue year-round, and the factory supplies both wholesale and retail traders. The factory also provides training courses to employees to ensure long-term investment in skills and knowledge.

Labor market integration of Roma continues to be poor in most countries in Europe. As a result, Roma are much less likely to have jobs than non-Roma, and Roma with jobs earn much lower salaries than non-Roma. While other segments of Europe are aging rapidly, the Roma population is comparatively young and growing. Creating sustainable jobs in the private sector or through small entrepreneurial activity is the most efficient route to Roma economic inclusion. This is why enterprises such as the mushroom factory set up by the Bhim Rao association are so important.

In working to achieve Roma inclusion, employment is one of the four priority areas along with health, education, and housing. Employment is not just about giving jobs to as many people as possible. It is also about the potential for development and the sense of purpose in life that jobs also offer. Public employment schemes in Central and Eastern Europe have a tendency to channel Roma workers into the most menial tasks, such as street cleaners.

Funds exist to kick start this kind of micro enterprise, but here too, challenges persist. Despite the European Commission’s call for member states to apply more European Union (EU) funds to programs aimed at integrating Roma before the close of the 2007-2013 EU budget period, many countries in Central and Eastern Europe have not done so. Some of them—such as Bulgaria and Romania—are among the slowest to make use of EU funds, particularly resources from the European Social Fund.

For example, Romania has received €4.5 billion ($5.9 billion) from the European Social Fund. But the estimated 1.8 million Roma in the country—who struggle with pervasive unemployment, poor living conditions, low life expectancy, and low rates of school attendance—have benefited very little from these funds. Indeed, in the sixth year of the current seven-year budget cycle, less than 10 percent of the funds have been used, and only a fraction of that for Roma.

Elsewhere, the Bulgarian government is spending EU funds very slowly. And, in Hungary, spending slowed when the current government deemed the previous government’s programs deficient.

Against this backdrop, success stories like the mushroom factory in Szendrolad confirm that with the strategic use of funding and a good business plan, microenterprises can offer a sustainable answer to creating Roma employment, strengthening community ties, and providing a worthwhile product or service along the way.

You can see a short video clip about the mushroom factory here.