Tropentag, October 5 - 7, 2004 in Berlin "Rural Poverty Reduction through Research for Development and Transformation"

Consumer Preferences as a Guide for Development Strategies for Small Farmers in Chile: The Model Promoted by the Institute of Agricultural Development (INDAP)

¹University of Talca, Department of Agricultural Economics, Chile
²Institute of Agricultural Development (INDAP), Food Safety and Good Agriculture Practices, Chile

Abstract

Small-scale food and agriculture production in Chile involves about 65,000 small companies. They are the main suppliers of fresh produce in national markets and provide about 70 percent of the raw material in the agricultural industry. Small agricultural production requires changes in strategy that allow it to successfully become involved in the opening of trade under the current patterns of economic development based on the increasing opening of trade and development of exports.

From this perspective, these are essential in the business development of this sector: first, the law of supply and demand; and, second, making the most of its comparative and competitive advantages. Meeting the Chilean Agricultural Policy supported by the advantages that the country offers, the strategy of differentiation based on quality can be seen as the best option for competitive development of the country's food and agricultural sector.

This strategy aims to move the centre of national agricultural activity from commodity supply to a specialised supply with large degrees of differentiation in which the determining factors would be qualities of innocuousness and value, as an answer to what today constitutes the standard of consumer use and preference in foreign and domestic markets.

The ability of small agricultural companies to react and successfully face this process of transformation in the markets is mediated by a long series of structural deficiencies and market imperfections. Considering the social significance and economical contribution that this sector makes to the harmonious development of the country, Chile has assumed the task of creating conditions and opportunities for all the participants that operate in the chain and that offer competitive potential.

The objective of the study is to present the operating proposal and analyse the main results of the sector policy implemented by the Institute of Agricultural Development (INDAP-Ministry of Agriculture) at the level of small-scale agricultural production, with regards to the development of a competitive development strategy based on consumer demands.

Keywords: Agricultural policy, consumer preferences, food safety and quality

Contact Address: Pablo Villalobos, University of Talca, Department of Agricultural Economics, Campus Lircay, Talca, Chile, e-mail: pvillalutalca.cl