Measuring the Size of the Renewable Resource Sector: The Case of Chile

Abstract

As a percentage of national gross domestic product (GDP), farming is typically small in middle‐income and wealthier countries. But national accounts include only on‐farm activities, giving both the public and policymakers an impression that the food sector is a minor actor in the economy. Much of past development literature, using household expenditures, considered that farming generated few positive externalities, with few backward and forward linkages to other sectors, inviting the conclusion that stimulating agriculture was a low priority to boost economic development, especially in Latin America. Using national accounts, this study employs a concept of an expanded value added to capture agricultures intersectoral linkages, yielding a more useful measure of sector size. In the case of Chile, the expanded primary sector's contribution is approximately double that of simple national accounts, with forward links far exceeding backward. A more refined division of labor and economic specialization, perhaps enhanced by trade openness, appears to explain in part agriculture's declining share in national GDP and the growth of sectoral linkages.

Tapping the Potential of Bolivia's Agriculture and Food Systems to Support Inclusive and Sustainable Growth

“…During 2000-17, growth in agricultural GDP in Bolivia averaged 3.0 percent per year, higher than in most of the country's regional peers, and among the top rates of its structural peers, particularly during the present decade (Fig- Those forward and backward linkages are rarely estimated, however, although such estimates would provide a more accurate picture of the relevance of agriculture in an economy. To understand the "real" importance of agriculture, an "expanded agricultural value added" is estimated based on the methodology provided by Foster and Valdes (2015). Box 2 shows the results for Bolivia.…”

Agricultural and Forestry Land and Labor Use under Long-Term Climate Change in Chile

“…Primary, farm-level production has accounted for a decreasing share of national GDP in national accounts, but, due to the labor intensity of Chile's crop mix, primary production plays a much larger role than its value-added share both in terms of direct employment and as the base on which a large and dynamic food sector has evolved and currently thrives [13]. Official government statistics show that the primary production of the agriculture and forestry sectors currently accounts for approximately 3% of Chile's GDP, but also, agriculture employs, annually, approximately 12% of the total national workforce [14]. Furthermore, primary agriculture contributes significantly to downstream activities [14], and primary and processed agricultural and forestry products contribute significantly to national exports, representing about 15% to 20% of Chile's annual merchandise export earnings (updated statistics may be found at Ref [15]).…”

“…Official government statistics show that the primary production of the agriculture and forestry sectors currently accounts for approximately 3% of Chile's GDP, but also, agriculture employs, annually, approximately 12% of the total national workforce [14]. Furthermore, primary agriculture contributes significantly to downstream activities [14], and primary and processed agricultural and forestry products contribute significantly to national exports, representing about 15% to 20% of Chile's annual merchandise export earnings (updated statistics may be found at Ref [15]). Given the prominence of the food system in national income generation and employment in Chile, as in other middle-income countries with large export-oriented agrifood sectors, the likely impacts in the event that projected climate changes occur have elicited considerable interest among policymakers and private sector actors.…”

Towards Sustainable Agriculture in Chile, Reflections on the Role of Public Policy

“…1 This means that during this period the sector has grown, on average, at the same rate as the rest of the Chilean economy, at a rate of 3.4% per year. Moreover, when the sector's forward and backward productive linkages are added, its contribution to national GDP doubles (Foster and Valdés, 2015).…”