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OECD Review of Agricultural Policies: Chile 2008

image of OECD Review of Agricultural Policies: Chile 2008

This Review measures the level and composition of support provided to Chilean agriculture, and evaluates the effectiveness of current measures in attaining their objectives. The 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.

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Policy Evaluation

Since the restoration of democracy in 1990, successive governments have kept faith with the broad commitment to open markets, notwithstanding some significant exceptions in import-competing agricultural sectors. At the same time, the Chilean government has been increasingly active in adopting policies to boost competitiveness, help poorer and less competitive farmers, and protect the country’s environment and natural resource base. Thus while Chile’s agricultural trade policy is essentially liberal, the overall approach to policy making is by no means laissez-faire.

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