Overview 

Agriculture is one of the main economic activities in Chile, accounting for 24.4 percent of total exports ($21.9 billion), and 9 percent of total GDP. The sector grew by 1.9 percent in 2021 and employs approximately 10 percent of the country’s labor force. The country is one of the largest global agricultural and food exporters for fresh fruit, wine, meat, dairy, olive oil, as well as forestry and fishery products. Chile has favorable geographic and climate conditions for food production and because of the country’s location in the southern hemisphere, agricultural production is counter-season for the main consumer markets in the northern hemisphere. The extensive network of trade agreements, among them the U.S. - Chile Free Trade Agreement, allows preferential access of Chilean products to approximately 88 percent of global GDP.

The agribusiness sector is under pressure to increase sustainable productivity by efficiently using scarce natural resources, such as water. Climate change is causing severe negative effects, including a historic mega-drought in its 14th year. Chilean agriculture uses 72 percent of the country’s water resources and will need to lower water usage. The impact is worse in northern and central Chile, where rainfall deficits ranges between 20 percent and 90 percent, depending on the region. In southern Chile, farmers have invested in irrigation projects to maintain production levels during the dry summers, adopting new technologies to facilitate ground perforation at deeper levels and extraction of larger volumes of water depleting the aquifer. Agriculture and food producers must satisfy well-informed consumers who demand that crops be produced and processed in a sustainable manner. Circular Economy (CE) initiatives are a tool that the industry is implementing to close nutrient loops and reduce negative discharges to the environment.

Over the last several years, labor availability has become a challenge because workers are choosing better paying and less intensive jobs. In 2020 and 2021, the availability of labor was partly impacted by the government’s Covid-19 social subsidies, which ended in 2022. Illegal immigration has become a sensitive issue further impacting the availability of foreign works that the sector relays on. Farmers estimate a decrease in the availability of labor for the upcoming September – March harvesting season of between 40 percent and 60 percent.

Agriculture machinery and equipment from the U.S. has a reputation for quality and reliability and is designed for intensive and long-lasting use. U.S. advanced technology and innovation are also well-recognized. However, the Chilean market is small and competitive. The U.S. is the third most important supplier, with imports accounting for 12.3 percent of the market, behind Italy, leading with 25 percent and China with 24 percent market share. A drawback for U.S.-made machinery and equipment is that it is designed for large farms and high production volumes. Most farms in Chile are small with small production volumes that better match European designed and manufactured machinery. Since the cost of energy is one of the highest in Latin America, energy-efficient equipment is required for Chile to reduce production costs and remain competitive in the international market. Due to the COVID-19 pandemic, raw materials and shipping costs have increased, impacting the price of most equipment and tools used in agriculture production.

Units:  US$ millions 
Source:  Global Trade Atlas (HTS 40116100, 40119200, 84193200, 84248100, 84248110, 84248190, 84248900, 84321000, 84322100, 84322900, 84323000, 84324000, 84328000, 84329000, 84331100, 84331900, 84332000, 84333000, 84334000, 84335100, 84335200, 84335300, 84335910, 84335930, 84335990, 84336000, 84336010, 84336090, 84339000, 84341000, 84342000, 84349000, 84351010, 84351090, 84361000, 84362100, 84362900, 84368000, 84369100, 84369900, 84371000, 84378000, 84379000, 84391000, 84395900, 84399100, 84651000, 84659100, 84659110, 84659120, 84659190, 84659200, 84659300, 84659400, 84659500, 84659600, 84659910, 84659900, 84659990, 84678100, 84679100, 84781000, 84789000, 84792000, 84793000, 84793010, 84793020, 84793090, 85082000, 87011000, 87019011, 87019012, 87019019, 87019090, 87162000, 87169010)

Leading Sub-Sectors 

Water 

• Irrigation infrastructure is required to maximize efficiency of water usage. Highly efficient and cost competitive irrigation systems; efficient water management systems and data processing; water saving devices/systems; water flow sensors and control systems and equipment.

• Water storage systems/equipment; water transportation systems and supplies, for example, canal linings, tunnels, and underground reservoirs. Large portable water storage systems that can replace water reservoirs; systems for water transportation and storage; rain-collecting systems and storage technologies; data collection and processing.

Smart technology 

• Smart agriculture equipment: General agriculture machinery that replaces labor; technology and equipment for agriculture processes such as planting, watering, fertilizing; data collection and processing systems/software.  
• Precision agriculture equipment and accessories to utilize minimum resources, achieve optimum performance with minimum environmental impact.
• Agriculture production data collection, sensors, processing/analyzing and transmission equipment.
• Equipment/drones to monitor production conditions, propose improvement processes, and increase crop yield; drones to act on detected challenges (for example, apply pesticide when detecting specific pest/disease) 
• Technology, equipment, and supplies for crop traceability.

Machinery 

• Mechanization of agriculture processes including fresh fruit harvesting equipment and other machinery to replace labor.  
• Post harvesting processing equipment:  Washing, selecting, packaging. 
• Energy efficient machinery and equipment (decrease energy consumption).
• Environmentally friendly machinery and equipment (reduce impact on environment and provide higher sustainability).
• Processing equipment with low water consumption requirement.

Other

• Natural, non-chemical fertilizers and pesticides  
• Natural soil enhancers; natural products for soil and animal health 
• Non-chemical aids for agriculture production 
• Urban agriculture infrastructure, technology, supplies and systems 
• Organic production related technology/supplies  

Opportunities 

In 2021, the Ministry of Agriculture and Ministry of Public Works budgeted $6 billion for the construction of 26 reservoirs and water dams and partially subsidized irrigation projects. The construction of water dams takes an average of 15 years from the design to completion, due to a lengthy bureaucratic process that includes environmental impact studies and authorizations from several government agencies and ministries. To streamline the permit process, legislation is under consideration to expedite permits for critical infrastructure construction. Desalination is used in northern Chile to supply cities and mining activities. Multipurpose water desalination plants are being built for human consumption, agriculture, and industry (including mining operations).

Chile is open to innovative technologies to replace scarce and high-cost labor and improve water efficiency usage. Automated equipment such as unmanned tractors (for planting, harvesting, fumigating, and weed removal), and robot/workers are being used and the market is eager for new and improved generations of robotic equipment. Drones are used to fumigate, apply pesticides, and collect data on soil condition, hydro availability, harvest conditions, and fertilizer presence. Next generation drones with improved capacity to act on detected problems will do well in the market. The current market for specialized and energy efficient machinery and equipment is a best prospect since, in addition to reducing labor, saves energy and lowers production costs. Productivity has improved in recent years but needs additional improvements using higher efficiency machinery, green technology, irrigation systems, natural fertilizers, and soil enhancers.

Chile’s agriculture is focused on sustainability, traceability, and production of products that comply with the standards of the ‘Chile brand’. Organic production continues to increase and has a good local and international market, increasing opportunity for natural fertilizers and pesticides. Chile’s agriculture production aims at being as green as possible to obtain better value for its exports while contributing to a healthy and sustainable environment. Urban and vertical agriculture have not yet developed, but there are opportunities for those systems and products to be introduced.

Trade Shows

• Expo Chile Agrícola, October 5-6, 2022, Lo Valledor, Santiago, Chile: Organized by the Ministry of Agriculture, this event will take place in person at Lo Valledor and online. The show brings together private and public agriculture sector players of all sizes to facilitate interaction between agriculture related suppliers, farmers, universities, and international entities.

• FruitTrade 2022, October 12-13, 2022, Metropolitan Santiago Convention Center, Santiago, Chile: FruitTrade focuses on fruit and vegetables production and exports. The event brings together producers, exporters, suppliers, and international buyers of fresh fruit, dried fruit, vegetables, and organic products. FruitTrade 2022 will include an in-person international convention featuring technical seminars on trade, technology, production, innovation, and management.

• Sago-Fisur 2022, November 17-20, March 2022, Osorno, Chile: Sago-Fisur trade show focuses mainly on dairy, livestock, and regional fruit production. The event is attended by suppliers, distributors, and service providers related to the agriculture sector, and includes technical seminars, and an exhibition of pedigree cattle and horses. The Chilean Association of Slaughtering Plants organizes a special seminar on the subsector.

Resources

• Ministry of Agriculture (MINAGRI)  
• Oficina de Estudios y Políticas Agrarias (Office for Agricultural Policy Studies, ODEPA)  
• Servicio Agrícola y Ganadero (Agriculture and Livestock Service, SAG)  
• Sociedad Nacional de Agricultura (National Association of Agriculture, SNA)  
• Instituto de Desarrollo Agropecuario (Institute of Agriculture Development, INDAP) 
• Corporación Nacional Forestal (National Forest Agency, CONAF)  
• Asociación Chilena de Riego y Drenaje (Chilean Association of Irrigation and Drainage, AGYRD)  

For additional information, please contact U.S. Commercial Service Chile Commercial Specialist Mary L. Lathrop.