Chile: Land Of Diversity

Chile

Over the last decades, Chile’s agricultural world has become a major protagonist, reaching outstanding levels of development in the region. An early adjustment to globalization has gained it a privileged position within demanding international markets. Additionally, its economic, political, and social stability are very attractive to generate trade alliances and new businesses. In this respect, Chile’s farming market has strict quality and food safety standards aimed at protecting consumers, workers, and the environment.

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A Variety Of Crops

Chilean total agriculture area – according to the last official agriculture and livestock census from National Statistics Institute (INE) in 2004 – is 846,000 hectares (Ha) mainly distributed as follows: 

Cereals: 648,000 Ha (80,000 Ha are field corn; approximately 20,000 Ha are for hybrid seeds production)
Row crops (potatoes, dry beans, black beans): 127,000 Ha

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Industrials (peanuts, sun flower, canola, sugar beet, and tobacco): 70,000 Ha

Besides the 846,000 Ha of eatable crops, the other major production area where imported agrochemicals and pesticides are included in importation data is forestry, with 1 million Ha, of which 75% is pine trees and 25% is eucalyptus.

Major annual crops are wheat, field corn, sugar beet, and potatoes. The most important fruit crops are wine and table grapes, pome fruits, stone fruits, citrus, and kiwi. Of increasing importance are crops such as olives (fresh fruit and oil) and berries (mainly blueberries). There is a tendency this year to increase cereals and oil crops, such as canola seed, due to higher international prices for bio-fuel crops.

Rigid Regulations

Given that Chile is mainly an exporter of fresh and processed foods, exporters are certified by Good Agriculture Practices (GAP). Therefore, all the inputs used must be recommended with official support of the Agriculture Ministry, which has obligated use of only agrochemicals with specific recommendations for each crop, which must be specified on the product’s label. This has resulted in a restriction of the amount of replacements, mainly for fruit crops. Replacement products are also used on the basis of Maximum Residue Limits (MRLs) of buyer countries.

Chilean efforts are focused at becoming an agro-alimentary power of worldwide importance. This is the reason for rigid regulations for use and sales authorization of pesticides, with Chilean regulations some of the most demanding in Latin America.

In Chile, pesticides are mainly provided by importation of formulated products. Given diversification of the market and low import taxes, there are few local formulators, as it is difficult to compete with countries that have free trade agreements with Chile. Therefore, most of the imports are end-use products, with a small percentage of active ingredients.

There is only one main local formulator, which has very modern facilities and also manufactures for export. Other local formulators manufacture basically sulfur-based dust and WP formulations, as well as cupric pesticides.  

The market in CIF value of formulations and active ingredients has grown from US $97 million in 2002 up to US $160.4 million in 2006. According Customs, 76 companies or individuals imported pesticides in 2006.

There are six main national distributors of products provided by multinationals, and some direct imports. A group of local retailers, associated and acting as one unique buyer, count on similar prices and conditions by the importers that provide them. There are also companies seeking specialization in producing foliar fertilizers and micronutrients, aimed mainly at high-value crops.

Fertilizers (which are exempt from registration) are very important in a country such as Chile with limited agricultural area, as they allow yield improvement of annual crops. For example, in a field corn crop, the dosage used is 1 Kg urea per Ha, plus 230 units of P2O5, plus 150 Kg of K2O. When growers use this dose of fertilization, yield is above 15 tons/Ha, reaching sometimes even a yield of 20 tons/Ha.

Estimated bulk imports of fertilizer are 1.8 million tons, of which 50% is urea and the rest is made up of phosphate (P) fertilizers and potash (K), which is provided mainly by local production of potassium nitrates.

Chile’s Agricultural Future

The cost of hand labor has constantly risen, and safety policies implemented by GAP have resulted in lowering growers’ margins. In addition, other players in the fruit market such as Peru, Argentina, and Brazil – which produce grapes, apples, and berries – are becoming competitors mainly because they manage lower hand labor costs.

Having achieved worldwide recognition for the open comprehension of many kinds of markets’ tastes and needs, Chile has focused its efforts on becoming a specialties market, with a broad crop variety allowed by its fortunate geography and climate.

On the other hand, Chile does not stop researching new possibilities, crops, or products which may be historically unusual, but are technically possible due to the experience gained as result of the last decade’s international success. Food exports grew stably and the trend is to add value to Chilean products, assuring the safety of the food produced.

A group of Chilean companies in the biotechnology field has developed innovative solutions for human-safe and environmentally friendly crop protection – and has discovered new uses for already existing products – that have been patented and successfully sold in the US and Europe.

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