Highlights & Policy Recommendations | Policy Brief | Synthèses
Chile’s agricultural sector has played an important role in the country’s economic development, helping to raise incomes and reduce poverty. The sector has benefited from a stable macroeconomic climate and an open trading environment, and exports have grown rapidly,notably for high value products such as wine and fruits. A current priority of the government is to broaden the basis of agricultural growth by successfully integrating the country’s smallholders into commercial structures.
This Review measures the level and composition of support provided to Chilean agriculture, and evaluates the effectiveness of current measures in attaining their objectivesThe study finds that Chile provides much lower support and protection to its agricultural sector than most OECD countries, even though government expenditures on the sector have trebled in real terms over the past ten years. About half of that spending is on public goods such as infrastructure and irrigation, while the other half consists mostly of measures that seek to make Chile’s poorer farmers more competitive.
This report suggests ways in which the effectiveness of these policies might be enhanced, including by systematic evaluation of policy performance, by closer co-ordination across government agencies, and by framing policies for smallholders and salaried farm workers in an economy-wide context, so that agricultural policies can focus on potentially competitive farmers and be effectively distinguished from other development and social policies.
Chile has made important progress in raising incomes and reducing poverty, and more recently in narrowing income inequality too. The key to this strong economic performance has been sound macroeconomic management, institutional and structural reforms, trade openness, and the prudent management of mineral resources (principally copper). The agricultural sector, in conjunction with related downstream activities, has played a key role in Chile’s economic success. Yet while the incomes of agricultural households have increased, smallscale farmers have seen little change in their farm incomes, with most of the gains coming from improved off-farm opportunities.
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