Agriculture and the economy of Chile

Upon my research for information on the economy of Chile, I found an article on the SDSU library website. This was from a book title Agriculture Policy Monitoring and Evaluation 2013 OECD Countries and Emerging Economies. The reading was on Chapter 7 which is titles “Chile.” An interesting read on this report is how the Chilean government has been active in adopting policies to boost competitiveness, and small-scale farmers have high support, unlike other nations were faring is left to a few big corporations.

The article has graphs comparing agricultural figures from 1995-1997 to 2010-2012. The main takeaway from this is the “TSE as % of GDP” image, this shows how total support has decreased over time from 0.6% of GDP in 1995-1997 to 0.3% in 2010-2012. However, nominal spending constantly increased and half of it has been allocated to GSSE. There are very limited transfers to Single Commodity Transfer (SCT). In 2010-2012, SCT represented only 3% of the PSE.

With that said, the government policies are giving support to small scale farmers through budgetary allocations. In 2012, 54% of direct payments to farmers went to improving farm productivity and competitiveness. Most programs included in this category are designed to support small-scale agriculture and rural development. It is important to notice that the rural and territorial development program for indigenous communities (PDTI) has seen an increase year over year from 2010-2012.

Another important category of payments to farmers goes to soil recovery program, which in April 2012 was amended to better define and incorporate macro zones. The crop insurance program was also implemented and expanded in 2012, this covers 50% of the premium for medium and large scales farms, and up to 90% for small-size farms. The expansion in 2012 a livestock insurance was added, to help cattle producers to better manage animal death by decease, natural events, and civil responsibility. The second expansion to the program was the commodity price coverage that protects farmers from international price volatility.

              

Overall, policies keep getting introduced to help the economy, protect the agriculture business, and promote small-farming. This is huge for me because of the wealth being distributed amongst many farmers versus the elite. Small farming in the top nations has almost disappeared due to the governmental policies that promote giant corporations to monopolize the agriculture market.