Chile: Advantages to become agri-food power

05/01/2015

Chile is the main exporter of copper in the world, which is classified as "Chile's salary". There are hundreds of industries linked to mining, both domestic and foreign, that move the national economy, not without a high cost of environmental damage.

Due to this reality, and because the mineral resource is entering the phase of exhaustion both in quality and quantity, it is necessary to turn the course of the economy and national production to the agri-food industry.

The former rector of the University of Talca, Álvaro Rojas, along with Villalobos and Leporati, were the first to headline "Chile: food power" as a country dream, as a national strategy for the economy, and in 2006 they wrote: "The development strategy that implies materializing this new paradigm, of accessing a vanguard place among the most important exporting nations of agricultural products in the world, involves moving the central axis of the agro-export development, from a position of advantage of comparative advantages (static and bounded), based on low value-added products (agricultural commodities), to a stage of development of competitive advantages (dynamic and unlimited), based on high-value products (foods differentiated by quality)".

From the 2006 to date, in the field of fruit production has changed a lot, not only in quantity and quality, but mainly in variety of supply. Today we can no longer talk about commodities, in the case of fruit growing, but today we must speak fully of the fruit industry.

The fruit industry has been able to take advantage more quickly of the opening of international markets, the demand for differentiation, the application of science and technology to its products, and the advantages of globalization in every aspect.

powerhousefood2 According to data from the Central Bank and the Industrial Development Corporation, Sofofa, until the 2011 the export of food had grown at a rate of US $ 1000 million per year, doubling its exports in the last ten years, becoming a important exporting force and currently the second source of foreign currency for the country. At present, with the international drop in the price of copper and the higher operating cost that costs to produce it, the food item has a much more important second place for national income.

Within the export advance of the food item, the fruit industry, together with the vegetables, cover more than half of the total of national exports.

The main markets for fruit exports are almost four exact quarters, with a first destination to Latin America, another equal percentage for Europe and a third to the US, the fourth percentage is distributed in all other destinations, including Asia.

Advantages

Currently, Chile appears within the first fifteen countries in terms of food export value, out of a universe of more than two hundred countries, so it is in an unbeatable position to take the great leap that is needed to become a world power. At the beginning of the eighties the country exported US $ 50 million, today it is more than sixty times that volume.

powerhousefood3 Chile is a country with a Mediterranean climate, which is the ideal environment for plants and the germination of flowers and fruits. This climate allows the different varieties of plants and new crops, or genetically modified, to adapt, with greater ease. In addition, Chile, having such a varied geography, has the advantage of being able to produce different crops, with different maturation and harvest times, therefore, it can offer its fruit products to the various markets practically all year round.

In the world, only the 0.5% of the territories can enjoy the Mediterranean climate, among which is the south and the coasts of Spain, Italy and those of the countries bordering the Mediterranean Sea on its northern shore, and also in some fringes of southern Africa and Australia.

This climatic quality is an opportunity and comparative advantage of Chile in the perspective of the development of the agro-fruit industry.

On the other hand, Chile is among the first countries in which food production has a relevant importance in GDP, in a list headed by New Zealand.

Finally, in the reliability aspect, Chile is ranked number fifteen in the business environment ranking prepared by the Economist Intelligence Unit, EIU, so the country is in an advantageous position that can allow it to make the necessary jump to become a global agri-food power in this decade.

Source: FAO, Odepa, Sofofa, Central Bank