This paper intends to explore current trends of rural development and rural policies in the light of the approaching EU accession; and tries to give some concrete recommendations to Hungarian policy makers. We state that, the EU policies communicate rather contradictory messages, urging for centralisation (institutional, legislative) and continued subsidies for industrial agriculture on the one hand; and supporting decentralisation and an integrated rural development approach on the other. As a result of EU influence and domestic forces, in Hungary local and central sub-systems for rural development are emerging in parallel. We believe that the main cause for the failure of current and future rural policies is that the local system is not supported sufficiently and there is no adequate co-operation between the local and the central level of rural development in general. As a result, central resources cannot be efficiently delivered and local development potential cannot be unlocked. We suggest that, policy makers should take a much more integrated, diversified and multi-sectoral approach to rural development, using available domestic and EU resources in order to change the course of current rural policy practice. The diversification of the rural economy, improvement of locally added value; the development of short food chains; together with possibilities for the support of environmentally sensitive agricultural production would allow for the unlocking of our full rural development potential. In this way Hungarian rurality, from being a lagging follower of the EU rural regions, could become a champion of the integrated rural development approach.