Global value chain governance and smallholder livelihoods: A case study from Chile

Chile has been a ‘pioneer’ of neoliberal reform over the past three decades, and as a result of the opening of its economy, the Chilean countryside has been fundamentally transformed. The agricultural sector is marked by export orientation, productive consolidation and land concentration, as the state has actively promoted and facilitated foreign direct investment in the sector and access to global markets for Chilean produce. Increasingly this has involved the promotion of integration along global value chains for a raft of high-value ‘non-traditional’ agri-exports, including fruits, wine, oils and flowers. While consolidation and concentration are the overriding trends in the major agri-export sectors (e.g. wine, pip-fruit, stone-fruit), the Chilean state has also sought to promote niche opportunities for an ever-declining population of small scale producers. One such example is the production of export berries (particularly raspberries and blackberries) in Chile’s central regions, where smallholder growers have certain competitive advantages. Despite state support and farmer efforts, however, consolidation among transnational retailers, and the resultant fortification of buyers’ governing power, poses critical challenges. The paper reflects that, as in other agri-food chains, increasingly stringent and widely enforced private standards are likely to exclude many existing and potential participants from small-scale export agriculture unless state support mechanisms and programmes are substantially reformulated and up-scaled.