World Food Policy Volume 2, Number 1, Spring 2015 | Page 33

World Food Policy

The primary agro food sector presented the calculation results with the
second and third expanded definitions
extended

of VA. One notes a difference between
the popular perception of what are
flagship Chilean agricultural products
and what are included in calculating
the agricultural VA defined by national
accounts. Economists and laymen not
familiar with the details of national
accounting would mention wine, milk,
and meat as agriculture products. Some
important
“agricultural”
policies—
for example, the work of the agency
concerned with sanitary and phytosanitary regulations, inspections, and
certification (SAG)—have important
impacts well beyond the primary sector.
But it is clear that policy decisions and
programs for primary agriculture directly
affect important downstream activities.
From the standpoint of the Ministry of
Agriculture many of the activities that are
of special interest to what in politicians’
minds is agricultural policy are simply
outside of the formal coverage of the
sector in national accounts.

Comparing the magnitude of the
linkages in 2008 under the definitions
(a) and (b) of primary and basic food
activities, the sum of chains backward
and forward—the strength of the bond,
F in equation (1)—remains constant at
around 2.0%. In terms of absolute value,
however, the total expanded VA under
definition (b) is much higher, due to
the incorporation of the values added
of various activities not included in the
primary group (a). The expanded VA
under the definition of basic food (b)
reaches 7.93%. Interestingly, forward
linkages under the definition (b) are of
less total value than backward linkages.
One reason is that fruiticulture and

U

p to this point, we have only
included the agriculture and
forestry primary sector and
nonextractive fisheries. In this study,
the proportion of VA corresponding to
imported inputs is subtracted, as well
as adjusted for the proportion that the
agricultural product represents in the cost
of each sector’s production. Regardless of
the coverage of sectors, estimates using
this method of this study will be always
lower than simply adding the sectors’
values added. To include the food chain in
a broader sense beyond simply farming,
and in order to understand the links
among agro-forestry-food industries—
from the primary sector to processing—
the study re-calculated the expanded VA,
classifying all activities in three broad sets
of activities:
a. A primary set, which includes
agriculture, livestock, fruit, and
forestry.
b. A basic food set, which includes
primary production plus meat, milk,
domestic spirits (pisco), and domestic
tobacco products.
c. An expanded food and forest
products set, which includes the
previous two sets plus the following
domestic activities: grain milling,
sugar refining, edible oils, beer (which
uses malt from domestically produced
barley), basic wood products, and
paper.

The calculations presented above
in Table 5 correspond to the first group
(a), the primary sector, and below is
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