Agricultural Policy Monitoring and Evaluation 2024

7. Chile

Main findings

Support to agriculture

Chilean support (Producer Support Estimate - PSE) amounted to 2.8% of gross farm incomes in 2021-23, down from 7.3% in 2000-02 and well below the OECD average. Tariff reforms in the 1990s, led to the near elimination of Market Price Support (MPS) such that domestic producer prices are aligned with world prices. Single Commodity Transfers (SCT) are small and limited to sugar and beef, for which they amount to 3.4% and 1.7% of respective gross farm receipts.

Budgetary support to producers represented 47% of total support in 2021-23 and was mostly targeted to small-scale farmers. This support includes payments for on-farm fixed capital formation, on-farm services and variable input use.

Support for general services (General Service Support Estimate, GSSE) represented an average 3.3% of the agricultural value of production in 2021-23, equalling the OECD average. This support focusses on off-farm irrigation infrastructure, inspection and control, land reform through acquisition and redistribution, and agricultural knowledge and innovation systems.

Total agricultural support represented 0.3% of Gross Domestic Product (GDP) in 2021-23, half of the OECD average (0.6%) and lower than in 2000-02 (0.6%).

Key recent policy changes

In 2023, the National Sovereignty Strategy for Food Security was developed within the framework of the National Commission on Food Security and Sovereignty (CNSSA). The Strategy aims at strengthening the national food system by achieving food security and protect the right to food.

The Ministry of Agriculture developed a Traditional Seed Programme to protect and add value to traditional varieties, which includes research, promotion and strengthening of conservation and sustainable use, capacity building, and regulation. Its implementation will be overseen by different services of the Ministry and coordinated by ODEPA.

A new update of the irrigation law 18.450 was signed to promote private investment in irrigation and drainage works for an additional seven years. The objective of this law is to enhance water security and improve the efficiency of agricultural water use. A support programme for irrigation projects was also launched, targeting small-scale farming women from indigenous groups. Moreover, modifications were approved to the Law 21.623, which amends the broader Law 21.075 that regulates the collection, reuse and disposal of grey water, to promote its use in agriculture, with special focus on promoting new water sources for small agriculture in scarcity areas, a key group to guarantee the country’s food security.

The Promotion and Strengthening of Sustainable Production of Traditional Crops programme was launched. This programme, which reinforces the Sow for Chile (Siembra por Chile) initiative, provides subsidies to small-scale farmers subject to compliance with good agricultural practices with the view to increase the planting and production of specific crops.

The first Chilean Climate Mitigation Plan for Agriculture defines how the sector will contribute to national and international climate goals. The plan establishes measures to keep emissions within the sectoral carbon budget assigned by Chile’s Long Term Climate Strategy. The Adaptation Plan for the Forestry and Agricultural sector, which began development in 2020 with the support of the Green Climate Fund, went to public consultation in February 2024.

In 2023, Chile signed three collaboration agreements with the People’s Republic of China (hereafter “China”), covering the following topics: organic certification of agricultural products from both countries; electronic certification of agricultural products; and stone fruit expansion protocol for peach and apricot.

Assessment and recommendations

• The Chilean innovation strategy for sustainable agriculture is led by the Agricultural Research Institute, INIA and the Foundation for Agrarian Innovation (FIA). Better co-ordination between these institutions would better serve farmers’ needs, particularly with respect to adaptation to climate change, water management, and environmental protection. Furthermore, the reach of the strategies needs to cover a larger number of farmers in the national territory.

• Subsidies to farmers are well tailored and targeted to small-scale farmers and vulnerable populations, such as indigenous and women farmers. Their effectiveness for improving productivity, competitiveness, and the recovery of degraded soils should be assessed to ensure their continued effectiveness. Furthermore, these subsidies should be conditioned to not only good agricultural practices but also practices that protect the environment, with a view to progressively shifting towards outcome-based policies.

• Chile should consider scaling up public investments that help the sector become more sustainable, productive, and resilient. Additional and targeted investments in extension services, innovations favouring sustainable productivity growth, and climate-smart agriculture should be considered. Investments in irrigation systems must account for the changing climate and use principles of sound water management to ensure its sustainability.

• Better co-ordination across ministries and agencies that support the agricultural sector or rural populations would ensure an efficient use of public resources. Improved co-ordination, communication, and accountability are also needed between regional and national governments to avoid duplicating efforts.

• Chile’s National Adaptation Plan for agriculture includes measures to foster resilience in the agricultural sector. However, the country should take specific actions to facilitate the necessary transformation to more climate-resilient farming structures and production methods, in addition to shorter-term absorption of climate-related shocks.

Development of support to agriculture

Figure 7.1. Chile: Development of support to agriculture

Table 7.1. Chile: Estimates of support to agriculture

Million USD

	2000-02	2021-23	2021	2022	2023p
Total value of production (at farm gate)	4 806	13 099	13 988	12 331	12 979
of which: share of MPS commodities (%)	72.86	83.54	78.28	83.11	89.22
Total value of consumption (at farm gate)	4 118	11 573	12 117	11 169	11 433
Producer Support Estimate (PSE)	369	387	382	349	429
Support based on commodity output	227	19	49	4	3
Market price support¹	227	19	49	4	3
Positive market price support	228	19	49	4	3
Negative market price support	-1	0	0	0	0
Payments based on output	0	0	0	0	0
Payments based on input use	140	307	306	290	325
Based on variable input use	21	66	60	63	77
with input constraints	0	0	0	0	0
Based on fixed capital formation	85	165	167	153	175
with input constraints	66	78	79	77	80
Based on on-farm services	35	75	79	74	73
with input constraints	7	34	37	34	31
Payments based on current A/An/R/I, production required	1	62	27	56	101
Based on Receipts / Income	0	0	0	0	0
Based on Area planted / Animal numbers	1	62	27	56	101
with input constraints	1	62	27	56	101
Payments based on non-current A/An/R/I, production required	0	0	0	0	0
Payments based on non-current A/An/R/I, production not required	0	0	0	0	0
With variable payment rates	0	0	0	0	0
with commodity exceptions	0	0	0	0	0
With fixed payment rates	0	0	0	0	0
with commodity exceptions	0	0	0	0	0
Payments based on non-commodity criteria	0	0	0	0	0
Based on long-term resource retirement	0	0	0	0	0
Based on a specific non-commodity output	0	0	0	0	0
Based on other non-commodity criteria	0	0	0	0	0
Miscellaneous payments	0	0	0	0	0
Percentage PSE (%)	7.31	2.88	2.67	2.76	3.20
Producer NPC (coeff.)	1.05	1.00	1.00	1.00	1.00
Producer NAC (coeff.)	1.08	1.03	1.03	1.03	1.03
General Services Support Estimate (GSSE)	103	436	449	412	447
Agricultural knowledge and innovation system	22	69	72	63	74
Inspection and control	3	112	109	101	124
Development and maintenance of infrastructure	67	246	258	239	239
Marketing and promotion	10	9	10	9	9
Cost of public stockholding	0	0	0	0	0
Miscellaneous	1	0	0	0	0
Percentage GSSE (% of TSE)	22.00	52.96	54.03	54.12	50.99
Consumer Support Estimate (CSE)	-317	-61	-137	-24	-22
Transfers to producers from consumers	-226	-19	-49	-4	-3
Other transfers from consumers	-92	-42	-88	-20	-19
Transfers to consumers from taxpayers	0	0	0	0	0
Excess feed cost	1	0	0	0	0
Percentage CSE (%)	-7.51	0.50	-1.13	0.21	0.19
Consumer NPC (coeff.)	1.08	1.01	1.01	1.00	1.00
Consumer NAC (coeff.)	1.08	1.01	1.01	1.00	1.00
Total Support Estimate (TSE)	472	823	831	762	876
Transfers from consumers	318	61	137	24	22
Transfers from taxpayers	245	804	782	758	873
Budget revenues	-92	-42	-88	-20	-19
Percentage TSE (% of GDP)	0.63	0.26	0.26	0.25	0.26
Total Budgetary Support Estimate (TBSE)	244	804	782	758	873
Percentage TBSE (% of GDP)	0.33	0.25	0.25	0.25	0.26
GDP deflator (2000-02 = 100)	100	279	262	279	297
Exchange rate (national currency per USD)	621.08	824.41	759.82	873.25	840.16

Note: p: provisional. NPC: Nominal Protection Coefficient. NAC: Nominal Assistance Coefficient. A/An/R/I: Area planted/Animal numbers/Receipts/Income. 1. Market Price Support (MPS) is net of producer levies and excess feed cost. MPS commodities for Chile are: wheat, maize, apples, grapes, sugar, tomatoes, milk, beef and veal, pig meat, poultry, eggs, blueberries, cherries and peaches.

Source: OECD (2024), “Producer and Consumer Support Estimates”, OECD Agricultural policy monitoring (database), https://data-explorer.oecd.org/.

Policy landscape

Main policy instruments

The Ministry of Agriculture (MINAGRI) is in charge of designing and implementing agricultural policies. The main agricultural policy objectives for the country are developing small-scale agriculture, improving sustainable productivity and competitiveness and conserving natural resources. As price support is not used, agricultural policies are based on budgetary transfers. About half of budgetary expenditures are direct payments to small-scale farmers, which are provided for purchasing inputs, capital formation, credit at preferential interest rates, improving degraded soils and on-farm irrigation investments. The other half of the budget is spent on general services to the agricultural sector focusing on expanding and improving irrigation systems, access to land (land acquisition and redistribution), agricultural research and development, sanitary and phytosanitary services and inspection services (MINAGRI, 2024[1]).

The main programmes administered by the Institute of Agricultural Development (INDAP), the agency in charge of designing and implementing agricultural policies for small-scale farmers are:

• Support for the development of poor areas, including subsidies for variable inputs such as seeds and fertilisers; subsidies for fixed capital assets such as equipment and machinery; and subsidies for on-farm services such as technical assistance.

• Territorial development programme for indigenous communities that provides subsidies for fixed capital formation in poor marginalised areas.

• Incentives for the development of agricultural investment, including subsidies for variable inputs as well as for fixed capital formation on the farm.

• Support for the development of productive and entrepreneurial capacities, that provides on-farm services such as technical assistance.

• INDAP also provides credit to smallholders at preferential interest rates and has a crop insurance programme, which covers up to 50% of the premium.

The country also has a soil recovery programme in place to recover degraded soils to make them appropriate for agricultural practices, the programme also has soil conservation practices. Around 70% of funds for this programme are administered by INDAP and addressed to smallholders, with the remainder administered by SAG (the animal and plant health agency) and given to medium and large-scale farmers.

Subsidies for irrigation are managed by the national irrigation commission (CNR). This has both on-farm and off-farm components. On-farm support, 40% of spending, provides subsidies to farmers to improve or newly install irrigation systems. The remaining 60% is used for community, regional or national investments. General services to the sector are dominated by investments on infrastructure mainly for irrigation and related to land and water rights for indigenous communities. After infrastructure, inspection services, R&D and agricultural schools are important.

In its Nationally Determined Contribution (NDC) Chile committed to carbon neutrality by 2050 and takes a carbon budgeting approach, although no specific target has been defined for agriculture. The Long-Term Climate Strategy (LTCS) contains nine objectives and 63 goals linked to the agricultural and forestry sector. These goals are related to capacity building, agricultural R&D, agricultural extension services, reduction of greenhouse-gas (GHG) emissions, increasing carbon sequestration, and strengthening climate change governance (MINAGRI, 2024[1]).

Innovation for sustainable productivity growth

The Foundation for Agrarian Innovation (FIA) promotes innovation within the agricultural sector and forestry. Key roles of FIA are the promotion, articulation, capacity development and technological dissemination of initiatives that contribute to the sustainable development and competitiveness. The strategic guidelines of FIA are: 1) sustainable management of water resources; 2) climate change adaptation and mitigation; and 3) sustainable food systems.

In 2023, FIA promoted sustainable development through initiatives that included sustainable agri-food co-operatives through the AgroCoopInnova Programme, empowering young farmers via the Innovative Rural Youth Programme and supporting the advancement of rural women through the creation of the Innovative Rural Women Programme. Additionally, FIA also carries out research project financing with emphasis on sustainability, as well as technological innovation tours for farmers, and consultancy services.

In 2023, FIA implemented its Innovation Adoption Programme, which was initially designed and piloted in 2022. This programme helps farmers use knowledge and expertise generated from agricultural innovation projects supported by FIA. Targeting small-scale producers in the national forestry and agricultural sector, producer associations, co-operative companies, or groups sharing the same territory and sector, the programme helps bridge technological gaps by promoting sustainable and good agricultural practices as well as by promoting new technologies.

A new programme called “Sustainable Soil Management System” (SIGESS) will replace the current “Incentive System for the Agri-Environmental Sustainability of Agricultural Soils” (SIRSD-S). This new programme targets more efficient and sustainable use of natural resources, adaptation to new climate patterns, and making a positive contribution to the environment and society. The programme uses incentives and training to promote sustainable soil management practices by farmers and improve the chemical, physical and biological properties of soils.

The Transition to Sustainable Agriculture Programme (TAS) is a specialised technical advisory and training group of INDAP to help farmers create associations and co-operatives. Additionally, the programme provides subsidies for users to adopt good agricultural practices.

Lastly, the Agricultural Research Institute, INIA ascribe to the MINAGRI, focuses its work on six strategic axes: genetic resources, climate change, water resources, sustainable agriculture, healthy foods and technology transfer. At INIA they generate and transfer strategic knowledge and technologies on a global scale and with a territorial focus, to generate innovation and improve the competitiveness of the country’s agri-food sector. In practical terms, they develop varieties, produce seeds, and provide technical recommendations to increase the productivity, profitability, and sustainability of national agriculture (MINAGRI, 2024[1]).

Recent policy developments

Domestic policy developments in 2023-24

Key priorities of agricultural policies for 2023 were 1) food security and sovereignty; 2) sustainability; 3) water and climate emergency; 4) competitiveness based on R&D and technology transfer; 5) strengthening of family farming (small-scale farmers); 6) rural development and well-being; 7) forestry development; and 8) international co-operation and foreign trade (MINAGRI, 2024[1]).

In 2023, the National Sovereignty Strategy for Food Security was developed within the framework of the National Commission on Food Security and Sovereignty (CNSSA). The strategy aims at strengthening the national food system by achieving food security and protect the right to food. Its purpose is to guide the government towards food security, based on the principles of food sovereignty. Food sovereignty is understood as the protection of the right to food, through the strengthening of the five priorities that make up the base of the national food system:

• productive, natural resources and biodiversity

• agrifood and fisheries marketing channels

• human and socio-cultural heritage

• healthy diets

• sanitary and phytosanitary conditions and Food Safety.

In addition to these priorities, the strategy includes 10 transversal aspects, each of them with several lines of action. The transversal aspects to be addressed in the implementation of the strategy are: gender approach; sustainability; climate change; associativity and co-operativism; education and training; territory; fair socio-ecological transition; youths; research, development and innovation; and decent work. The implementation plan was defined in July 2023, specifying measures that ministries and public services will use to guide their management and actions.

In 2023, the Ministry of Agriculture developed a Traditional Seed Programme to protect and add value to varieties, which includes actions in the areas of research, promotion and strengthening of conservation and sustainable use, capacity building, and regulation. Its implementation will be overseen by different services of the ministry and co-ordinated by ODEPA.

In 2023 a new update of the irrigation law 18.450 was signed to promote private investment in irrigation and drainage works for an additional seven years. The objective of this law is to enhance water security and improve the efficiency of agricultural water use. It aims to serve as a tool for climate adaptation, addressing the country’s productive and food-related challenges, while also fostering fair and sustainable rural development. In general terms, this new law has three axes:

• Fair development allocating public resources to reduce the productivity and water efficiency gaps among small and medium-sized farmers, indigenous communities, and poor territories, while continuing to provide support to water users.

• Sustainable development establishing new environmental and water efficiency conditions for irrigation projects and encouraging investments in water reuse projects, nature-based solutions, use of rainwater, sustainable production systems, among others.

• Emergencies and innovation incorporating special mechanisms to swiftly address irrigation disasters and encouraging innovation and new related technologies.

During 2023, a support programme for irrigation projects was launched, targeting small-scale farming women from indigenous groups. This support is within the framework of Law No. 18450. The aim is to provide subsidies to women to build their own irrigation systems to address water crises and the effects of climate change. Lastly, modifications were approved to the Law 21.326, which amends the broader Law 21.075 that regulates the collection, reuse and disposal of grey water, to promote its use in agriculture, with special focus on promoting new water sources for small agriculture in scarcity areas, a key group to guarantee the country’s food security. With this law, the Ministry of Agriculture will be able to establish guidelines and standards for projects in the forestry and agriculture sector.

To reinforce the Sow for Chile (Siembra por Chile) initiative, a new programme was created in 2023 called Promotion and Strengthening of Sustainable Production of Traditional Crops, which aims to increase the cultivated area of cereals, legumes, and potatoes under sustainable production conditions to increase their availability on the domestic market. The programme provides different subsidies to small-scale farmers subject to compliance with good agricultural practices (MINAGRI, 2024[1]).

Policies to facilitate climate change mitigation and adaptation in agriculture

In order to reduce agricultural greenhouse gas (GHG) emissions, during 2023, ODEPA started to design and co-ordinate the first Chilean Climate Mitigation Plan for Agriculture and to define how the sector will contribute to national and international climate goals. The plan establishes measures to keep emissions within the sectoral carbon budget assigned by Chile’s Long Term Climate Strategy. The plan contains mitigation actions in livestock, manure management, agricultural burning and the rice sector, along with other complementary measures to promote carbon capture in soils, and reducing food loss and waste, among others.

The Adaptation Plan for the Forestry and Agricultural sector, which began development in 2020 with the support of the Green Climate Fund, went to public consultation in February 2024. The Preliminary Project considers 12 measures and 63 actions, including some linked to heat waves, such as extending and optimising information systems and agroclimatic risk management, incorporating adaptative actions to reduce the risk of forest fires, developing monitoring systems of changes in productivity potentials, among others (MINAGRI, 2024[1]).

Trade policy developments in 2023-24

In 2023, Chile signed three collaboration agreements with China, covering the following topics: organic certification of agricultural products from both countries; electronic certification of agricultural products; and stone fruit expansion protocol for peach and apricot. This last protocol is currently being implemented, registering successful shipments of this type of fruit to the Asian country. In addition, the Advanced Framework Agreement was signed between Chile and the European Union, and negotiations with the countries of the European Free Trade Association (EFTA) were completed. In 2023, Chile also signed agreements with Mexico for the entry of Chilean citrus under a systems approach protocol, and with Brazil for the entry of Chilean pomegranates (MINAGRI, 2024[1]).

Policy context

Key economic and agricultural statistics

Agriculture’s weight in the economy accounted for 3.9% of GDP and 6.1% of total employment in 2022. The sector has a dual structure, in which small-scale farms co-exist alongside a large-scale commercial farm sector. Chile is an open trade country, which has helped it to become an important producer and exporter of agricultural and food products such as fruits, vegetables, pig meat and wine. Chile is a net exporter of agro-food products with a surplus of around USD 2.6 billion (excluding fish and forestry) in 2022. Agro-food products accounted for 14.2% of Chile’s total exports, and for 10.7% of its imports (Table 7.2).

Table 7.2. Chile: Contextual indicators

	Chile		International comparison
	2000*	2022*	2000*	2022*
Economic context			Share in total of all countries
GDP (billion USD in PPPs)	145	592	0.4%	0.4%
Population (million)	15	20	0.4%	0.4%
Land area (thousand km2)	744	744	0.9%	0.9%
Agricultural area (AA) (thousand ha)	15 110	10 596	0.5%	0.4%
			All countries1
Population density (inhabitants/km2)	21	27	52	64
GDP per capita (USD in PPPs)	9 440	29 866	9 363	25 965
Trade as % of GDP	22.3	33.6	12.3	16.6
Agriculture in the economy			All countries1
Agriculture in GDP (%)	5.7	3.9	2.9	3.8
Agriculture share in employment (%)	14.1	6.1	-	-
Agro-food exports (% of total exports)	17.0	14.2	6.4	8.0
Agro-food imports (% of total imports)	7.7	10.7	5.8	6.9
Characteristics of the agricultural sector			All countries1
Crop in total agricultural production (%)	68	59	-	-
Livestock in total agricultural production (%)	32	41	-	-
Share of arable land in AA (%)	12	12	32	34

Note: *or closest available year.

1. Average of all countries covered in this report.

Sources: OECD statistical databases; International Labour Organization (ILO); UN Comtrade; World Bank, WDI; FAO database and national data.

After a strong recovery in 2021 following the contraction due to the COVID-19 pandemic, Chile’s economy encountered an important drawback as GDP did not grow in 2023; and the country’s unemployment rate increased from 7.8% in 2022 to 8.5% in 2023. However, inflation decreased from 11.6% in 2022 to 7.5% in 2023 (Figure 7.4).

Chile’s agricultural and agro-food sector has been successful in adding value to the production of primary commodities, by producing more differentiated products such as temperate fruits, and processed products such as wine. In 2022, 86% of agro-food exports were products for final consumption, both primary and processed, and only 14% were products for further industrial processing. Agro-food imports were mostly processed products for consumption with a 56% (Figure 7.5).

Total Factor Productivity (TFP) has been the dominant driver for Chile’s growing agricultural production. While output growth averaged 1.6% over the period 2012-21, slightly below the global average (1.9%), Chilean TFP growth averaged 2.3%, more than double the world average (1%). Agriculture accounts for around 11% of Chile’s GHG emissions, similar to the OECD average. Around 6% of the total agricultural land is irrigated (Figure 7.6; Table 7.3).

Table 7.3. Chile: Productivity and environmental indicators

	Chile		International comparison
	1991-2000	2012-2021	1991-2000	2012-2021
			World
TFP annual growth rate (%)	4.0%	2.3%	1.7%	1.1%
			OECD average
Environmental indicators	2000*	2022*	2000*	2022*
Nitrogen balance, kg/ha	..	..	32.1	28.2
Phosphorus balance, kg/ha	..	..	3.3	2.3
Agriculture share of total energy use (%)	..	1.3	1.7	2.0
Agriculture share of GHG emissions (%)	19.3	10.6	8.7	10.1
Share of irrigated land in AA (%)	..	5.5	-	-
Share of agriculture in water abstractions (%)	..	..	47.0	49.5
Water stress indicator	..	..	8.7	..

Note: * or closest available year.

Sources: USDA Economic Research Service, Agricultural Productivity database; OECD statistical databases; FAO database and national data.

Historical trends in agricultural policies

Prior to 1973, agricultural policies in Chile followed an import substitution industrialisation model, with measures such as price and production controls for staples (e.g. wheat), import tariffs, and export restrictions. Longstanding institutions were created in this period, including the Institute for Agricultural Development (INDAP - the smallholders’ agency), the Agriculture and Livestock Service (SAG - animal and plant health institute), INIA (agricultural innovation agency), and others. This period also saw land reforms that provided land to small-scale farmers and landless people (Anderson, K. and Valdes, A., 2007[2]).

Economic and agricultural policies shifted in 1973 with the military coup. Chile was the first country in the developing world to adopt market oriented open-economy reforms and structural macroeconomic reforms. These reduced the role of government in the economy and liberalised trade (OECD, 2008[3]).

From 1973-83, general reforms such as macroeconomic stabilisation were advancing more rapidly than agricultural sector-specific reforms. However, marketing boards and price control agencies for agricultural products were dismantled, import tariffs were reduced and export restrictions were lifted. From the mid-1980s, the government took measures to improve competitiveness and stimulate production and exports, with general services to the sector playing a central role. Several agricultural institutions related to innovation and irrigation were created, but smallholder development, the environment and resource use received little attention (Anderson, K. and Valdes, A., 2007[2]).

Since the restoration of democracy in 1990, agricultural policy focuses on three objectives: (1) increasing competitiveness, (2) achieving more balanced agricultural development by better integrating poorer, less-competitive, farmers into commercial supply chains, and (3) preserving the environment through sustainable use of resources. Tariffs were further reduced and numerous Regional Trade Agreements (RTAs) were signed, granting trade preferences to partners for agricultural products (OECD, 2008[3]). In 2022 the new government emphasised policies to address inequality issues in the sector, as well as on sustainability and water management (Table 7.4).

Table 7.4. Chile: Agricultural policy trends

Period	Broader framework	Changes in agricultural policies
Prior to 1973	Import substitution industrialisation model Closed economy	High import tariffs Price controls (e.g. minimum prices of main agricultural products such as wheat, fixed consumer prices, fixed marketing margins) Export quotas, licenses and export bans on main staple foods Subsidies to some producers (e.g. milk) Interventions in input markets Investments in agricultural infrastructure (e.g. slaughterhouses, storage and processing facilities, roads) Establishment of key agricultural institutions (e.g. INDAP, SAG, INIA, COTRISA) Land reform
1973-1990	Reforms for trade liberalisation	Removal of agricultural price controls Dismantling of marketing boards and price control agencies, except for wheat, milk and oilseeds Rapid tariff reduction on most imports Introduction of a uniform, non-discriminatory tariff system Elimination of export restrictions Establishment of price stabilisation mechanisms (price band systems) for imported products (wheat, sugar and oilseeds) Creation of further agricultural institutions (e.g. FIA, CNR)
1990-2022	Return to democracy continues with open markets model	Most Favoured Nation tariff reduction up to 1% by 2020 for all agricultural products Many free trade agreements signed Dismantling of the price band systems for sugar and oilseed Increase in budgetary allocation to support smallholders and for investments in general services
2022- present	More emphasis on inequality issues addressing small-scale agriculture, women, indigenous people and youth. Greater emphasis on sustainability and water management.	While the country continued with open markets, more emphasis on small-scale agriculture has taken place, by providing greater resources to INDAP. Law modifications on water management. Law modifications on soil programmes Development of National Strategy of Sovereignty for Food Security Agriculture sustainability programmes.

After the almost total elimination of the market price support (MPS), producer support declined from close to 10% of gross farm receipts at the end of the 1990s to below 4% throughout the 2010s, and averaged 2.26 for the period 2021-23. Support payments related to agricultural input use have partly replaced MPS, and these are targeted to small-scale agriculture. More funding is also provided for the provision of general services, which today account for half of Chile’s total support estimate to agriculture.

References

[2] Anderson, K. and Valdes, A. (2007), Distortions to Agricultural Incentives in Latin America, World Bank, Washington DC, http://documents.worldbank.org/curated/en/518211468170062688/Distortions-to-agricultural-incentives-in-Latin-America.

[1] MINAGRI (2024), OECD Annual Country Report. Government Report.

[3] OECD (2008), OECD Review of Agricultural Policies: Chile 2008, OECD Review of Agricultural Policies, OECD Publishing, Paris, https://doi.org/10.1787/9789264042247-en.