On 13th December 2002 Heads of State and Government of the EU and ten candidate countries reached an agreement on a formula to enlarge the EU by ten new member states by the year 2004. Hungary will join the EU on 1st May 2004. The Hungarian agricultural subsidiary system is different from the EU's and it is important to help the agricultural sector preparing for the integration. Thus, Hungarian agricultural subsidies aim to help increasing and improving the sector's competitiveness and profitability. The subsidies are essential and account for a significant percentage of the financial resources of smallholders. In the European Union, the farms are classified by different methods. One is the European Size Unit (ESU) with a subsidy of 1,200 EUR/unit. In Hungary the smallest unit is 2 ESU. More than 90% of the Hungarian agricultural farms belong to the first category and only about 70,000 farms' agricultural area exceeds 5 hectares and have more than 5 standard animal-units. This analysis is based on the data of the Hungarian Farm Accountancy Data Network.