Impact of farm protectionism on the use of agricultural inputs in Chile

  • Gabriel Pino Universidad de Talca, Facultad de Economía y Negocios, Av. Lircay s/n, Talca
  • Ariel Soto-Caro Universidad de Concepción, Escuela de Administración y Negocios. Vicente Méndez 595, Chillán
Keywords: government assistance, agriculture, elasticity of substitution

Abstract

Despite evidence highlighting the multiple benefits that liberalization can have in the agricultural sector, agricultural protectionism is abundant, especially in developing countries. Chile provides an interesting case on this topic because it implemented an aggressive liberalization in the agricultural sector during the 1970s and 1980s. This paper analyzes the impact of farm protectionism on the use of agricultural inputs in Chile. To do this, we estimated partial elasticities of substitution by incorporating government protectionism as a factor for agricultural production. Our findings reveal that increased protectionism decreases agricultural labor and promotes the use of fixed capital. In contrast, protectionism has no effect on the use of working capital and land. This information shows a clear transference from the government to farmers. Furthermore, our results are useful for anticipating the effects that varying levels of government protectionism can have on the Chilean agricultural sector over time.

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Published
2019-04-15
How to Cite
Pino, G., & Soto-Caro, A. (2019). Impact of farm protectionism on the use of agricultural inputs in Chile. Spanish Journal of Agricultural Research, 17(1), e0107. https://doi.org/10.5424/sjar/2019171-13696
Section
Agricultural economics