World Food Policy Volume 2, Number 1, Spring 2015 | Page 29

World Food Policy

Table 4: VA of the sector (current prices) agriculture and its linkages, 1986, 1996,
2003, and 2008
Participation in VA
total (%) in year

VA
agriculture

1986
1996
2003
2008

7.49
3.72
3.07
2.53

Value of
forward
linkages
2.22
2.09
1.42
1.69

Value of
backward
linkages
0.71
0.78
0.73
0.55

Total
10.42
6.59
5.21
4.78

Source: Calculated by the authors (Central Bank data) and figures for 1986 and 1996 in Table 1 Anríquez,
Foster, and Valdes (2005), figures for 2003 are Foster and Valdes (2013). Note: National Accounts before
2008 corresponds to area #1 (agriculture), #2 (fruit growing), and #3 (livestock). Agricultural sector for
2008 corresponds to the first nine sectors; annual crops, vegetable crops, cultivation of grapes, other fruit
crops, cattle breeding, poultry farming, breeding other animals, and support activities to agriculture and
livestock. Total represents the percentage of this component in the total VA of the economy.

As seen in Table 4, the share of
primary agriculture declined from 7.5%
in 1986 to 2.53% in 2008. The size of the
forward linkages also declined from 2.2%
to 1.69% of the value aggregate national
total. On the VA of agriculture links
below rose from 30%to 67%. Before the
industry sold a higher proportion directly
to consumers, while agriculture now sells
more to processors and other sectors. It
is emphasized that the backward links
are smaller than the links below and have
decreased compared to 1996 and 2003.

In contrast, we examine the case
of copper. In 1996, copper accounted for
about 6% of GDP, while in 2003 it rose
to 7.4%, growing faster than the rest of
the economy. In 2008, the copper mining
sector accounted for 14% of total VA of
the country. What about the importance
of the sector’s integration with the rest
of the economy? In 1996 forward links
accounted for only 0.13% of national
GDP, and in 2008 these grew to 0.9%.
This reflects the fact that this exportable,
resource-based s ector is weakly linked to
downstream processing. But in contrast
to agriculture, the copper sectors links

backward are relatively more important;
in 2008 backward links represented
1.26% of national VA, reflecting primarily
the demand for energy and commercial
services. Overall, agriculture is more
integrated with the rest of the economy
than copper mining; the expanded value
of the primary agricultural sector was
88% greater than the official VA, while
the expanded VA of copper was only 15%
higher than the official statistic. Primary
agriculture is an important supplier of
raw materials to other domestic sectors,
while copper is much less.

Table 5 presents the expanded VA
agricultural sector disaggregating crops
(referred to officially as “agriculture”),
fruit, and livestock, and a new sector,
support for agriculture and livestock,
adding both the forestry and fishing
sectors, which are relatively large in Chile.
Adding forestry and fishing within the
renewable resourced sector raises its share
in total VA by 1.3% (0.82% forestry and
0.47% fishing). In terms of the expanded
VA of renewable resource sector, the VA
contribution almost doubles, from 3.82%
to 6.41%.
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