World Food Policy Volume 2, Number 1, Spring 2015 | Page 26

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

sales. As an illustration consider a very (2) Addition to the primary sector arising
simple case of an expanded VA measure in sector
as the sum of the national accounts VA,
⎡ X T ⎤ ⎡ X N ⎤
Sj
plus a proportion of the VA of related
⎥ ⋅ ⎢ TSj ⎥ ⋅ VA j

j = ⎢ 177
T
⎢⎣ ∑k =1 X kJ ⎥⎦ ⎢⎣ X kJ ⎥⎦
industries, where F represents the
“strength” of the linkage (0 ≤ F <1):
where
 XTSj represents the value of the
intermediate inputs used in activity j
(1) VA!"  !"#$%&!& = VA!" + F ∙ VA!"#$%&
from all sources, domestic and imported,

We measure the links forward coming from the primary sector S
by the participation of agriculture in the (agriculture, fruit, etc.). The term XTkj
costs of post-harvest activities where represents the value of the intermediate
farm products are intermediate inputs. inputs from any sector k used by sector
For backward linkages, we measure the j. The sum across all inputs k represents
relative importance of agriculture as a the total costs of intermediate inputs
buyer in comparison with the total use of used by activity j. The superscript T
products from other sectors.
represents the total amount of an input

One way to visualize the role from all sources, domestic or imported,
of the farm sector in other activities and the superscript N indicates domestic
is to imagine what would happen if inputs. The term VAj represents the VA
agriculture were to “disappear” causing a attributable to sector j. Equation (2)
decrease in the value produced by other measures the value of forward linkages of
sectors. Indeed, some industries would agriculture as a proportion of the VA of
disappear due to their direct dependence sector j, which is equal to the fraction of
on primary domestic production, such total costs due to domestic agricultural
as fruits and vegetables processing; other and livestock inputs.
industries, such as dairy products and
Similarly, to estimate the value
winemaking, would drastically shrink of backward linkages consider the
in size, perhaps surviving with imported following:
processed materials. This proposed
approach could also be applied for other (3) Addition to the primary sector arising
sectors, such as for mining, a case of in sector
nonrenewable primary production, or for
⎛ X TjS ⎞ ⎛ X NjS ⎞ ⎛ ∑ k X Njk ⎞
j = ⎜
⋅
⋅ VA j

⎟ ⋅
any other sector. One can compare these
⎜ ∑ X Tjk ⎟ ⎜⎜ X TjS ⎟⎟ ⎜⎜ TVO Nj ⎟⎟
⎝
⎠
⎝
⎠
⎝
⎠
k
expanded VA across sectors to gauge
relative degrees of integration into the

larger economy. In the following section, where XTjS represents the value of the
we compare the results for agriculture for products sold by sector j for use by the
those of the mining sector.
primary sector S (agriculture, etc.),

To estimate the value of forward and XNjS represents the value of sector
linkages with the value added (VA) of j’s products used by the domestic S
other sectors, we propose the following sector. The term TVO represents the
formula:
total value of output of the domestic
25