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Many central government actors intervene in rural development

A broad number of national public actors intervene in rural development policies. As in many countries, policy towards rural areas in Chile is not the sole responsibility of a specific ministry or public agency. Chile’s Ministry of Agriculture (MINAGRI) is the main responsible body for the design, implementation, administration and regulation of national policies related to agriculture, livestock, forestry, food and rural development. This ministry, however implements its policies through the following 12 public agencies.

  • • The National Institute for Agricultural Development (Institute Nacional de Desarrollo Agropecuario, INDAP). The INDAP is the main agency providing support to small-scale agriculture. Its aim is to improve the competitiveness and market orientation of small scale/family agriculture. In order to carry out this mandate, the institute contributes to financing the investments and operational capital of small-scale producers. It also co finances technical assistance and management programmes for smallholders, and implements general assistance programmes for poor farmers. It has a network of 122 offices around Chile.
  • • The Agriculture and Livestock Service (Servicio Agricola Ganadero, SAG). The SAG is responsible for protecting, maintaining and improving the sanitary conditions of livestock and agricultural production; protecting, preserving and improving the natural renewable resources used in agriculture; and controlling the inputs and outputs for agricultural production, according to legal regulations and standards.
  • • The National Forest Service (Corporacion Nacional Forestal, CONAF). CONAF’s mission is to preserve and increase the country’s forestry resources. CONAF controls the enforcement of regulations concerning the use of forests. It also has a forest-fire control programme and manages the national system of forestry protected areas.
  • • National Irrigation Commission (Comision Nacional de Riego, CNR). The CNR co-ordinates all the institutions with irrigation activities and implements its own irrigation and drainage policies, programmes and projects. It also manages the funds available for promoting the construction of private irrigation and drainage projects; and promotes public actions oriented to agricultural development and training in the areas that benefit from irrigation projects. [1]
  • • National Institute for Agricultural Research (Institute Nacional de Investigaciones Agropecuarias, INIA). INIA’s mandate is to create, adapt and transfer innovation and technological knowledge to improve the competitiveness of agriculture.
  • • Foundation for Agrarian Innovation (Fundacion de Innovacion Agraria, FIA). The FIA promotes innovation in Chilean agriculture by financing the development of programmes and projects that are oriented to the industrial transformation and commercialisation of agricultural and forestry products. It also provides extension services.
  • • Forestry Research Institute of Chile (Instituto de Investigacion Forestal de Chile, INFOR). INFOR’s mission is to carry out research projects, prepare statistics, and transfer scientific and technological knowledge related to the sustainable use of forest ecosystems, the management of its resources and the commercialisation of its products. It supports the development of small and medium-sized forest owners, and technological innovation among small and medium-sized wood- product companies.
  • • Foundation for Agricultural Communication, Training and Culture (Fundacion de Comunicacion, Capacitacion y Cultura del Agro, FUCOA). FUCOA is in charge of the communications of the Ministry of Agriculture and its agencies.
  • • Natural Resources Information Centre (Centro de Informacion de Recursos Naturales, CIREN). CIREN’s function is to compile, update, maintain and integrate statistics and cartographic information related to the country’s natural resources; and to provide timely and useful information for the analysis of different sub-sectors.
  • • The Agricultural Insurance Programme (Comite de Seguro Agricola, COMSA). COMSA is financed by the Ministry of Agriculture and administered by CORFO. Under this programme, a subsidy is given to farmers who take out crop insurance and pay a corresponding premium. Risks covered are those caused by climate hazards.
  • • Chilean Agency for Quality and Food Safety (Agencia Chilena para la Calidad e Inocuidad Alimentaria, ACHIPIA). It advises the President of the Republic in all matters related to the identification, formulation and execution of policies and programmes associated to food quality and safety.

Due to the importance of agricultural activities in Chile’s economy, MINAGRI and some of the public agencies particularly INDAP play an important role in rural activities with a widespread presence in rural areas. However, this ministry does not oversee or coordinate rural development in broad terms,8 and does not intervene or exercise much authority in other policies directly related to rural development such as fisheries, rural tourism, renewable energy, economic development or fight against poverty in rural areas. The following ministries and public agencies also play a significant role in rural activities in Chile:

  • • The Undersecretary of Fisheries is integrated in the Ministry of Economy. It regulates and administrates fish-related activities, including for industrial fishing, artisanal fishing, aquaculture and leisure fishing.
  • • The Undersecretary of Tourism also depends on the Ministry of Economy. It supports tourism development and promotes tourism training to small and medium entrepreneurs.
  • • The National Tourism Service (Servicio Nacional de Turismo, SERNATUR) is a public agency linked to the Ministry of Economy, responsible for promoting and disseminating the development of tourism in Chile. Under the direction of the Undersecretary of Tourism, it manages the National Tourism Policy and is in charge of safeguarding the sustainability of tourism activities. The National Office is in Santiago and has representation in all the regions and in some touristic localities or territories such as San Pedro de Atacama, Easter Island, Chiloe or Puerto Natales.
  • • The Economic Development Agency’s (Corporacion de Fomento de la Produccion, CORFO) mission is to promote the development of productive activities across all sectors of the economy. It promotes management improvements, innovation, the generation of capital and the creation of new businesses. CORFO provides long-term credit at preferential rates for agriculture and rural development initiatives. It has sponsored some successful producer associations, and programmes to support the salmon and wine clusters.
  • • The Technical Co-operation Service (Servicio de Cooperacion Tecnica, Sercotec) is a corporation under the Ministry of Economy whose mission is to promote and support initiatives for improving the competitiveness of micro and small enterprises and develop the management capacity of small-scale entrepreneurs. This service has an important role in rural areas, offering training, support and seed-founding programmes and initiatives.
  • • The Ministry of Public Works (Ministerio de Obras Publicas, MOP) is in charge of planning, designing, building, expanding, repairing, maintaining and operating the national public infrastructure system, including roads, bridges, tunnels and large and medium irrigation works. The MOP is responsible for improving the connectivity and infrastructure of isolated and sparsely populated areas. The Water Directorate under the Ministry of Public Works is responsible for the management and administration of water resources and the granting of property rights for water use. It has a programme for improving access to drinkable water in rural areas (Programa de Agua Potable Rural). In turn, the MOP’s Hydraulic Works Directorate (Direccion de Obras Hidraulicas, DOH) provides water and irrigation infrastructure services.
  • • The Ministry of Environment (MMA) was created in 2010 to replace the former National Environment Commission (CONAMA). It designs and implements environmental policies, programmes and plans, including those for protecting and preserving the biodiversity and the natural and hydrological resources. It also coordinates the national plans for climate change mitigation and climate change adaptation in the sectors of agriculture, forestry and fisheries. It is responsible of the administration of the System of Environmental Impact Evaluation (SEIA) and approving environmental impact studies and declarations. The SEIA evaluates and certifies public and private initiatives, including those related to: tourism, energy, mining, agro-industry, forestry projects and transport infrastructure.
  • • The Sub-Secretariat for Regional Development (SUBDERE), belonging to the Ministry of Interior, co-ordinates territorial affairs and regional development across Chile, including rural development. It defines the regional distribution of the FNDR resources. It implements several rural targeted programmes including the Programme of Rural Sanitation (Programa de saneamiento rural) and the Programme of Rural Infrastructure for Regional Development (Programa de infraestructura rural para el desarrollo territorial, PIRDT).
  • • The National Corporation for Indigenous Development (Corporacion Nacional de Desarrollo Indigena, Conadi), under the Ministry of Social Development, coordinates and executes state initiatives for the development of indigenous people.
  • • The Social and Solidarity Investment Fund (Fondo de Solidaridad e Inversion Social, FOSIS) is a public agency public agency under the Ministry of Social Development that finances activities that contribute to poverty reduction. It implements targeted programmes for improving the incomes of small producers in rural areas.
  • • PROCHILE: Institution belonging to the Ministry of Foreign Affairs responsible for promoting international trade and exports of Chilean products abroad, and contributing to the dissemination of foreign investment and tourism promotion.
  • • The Ministry of Energy (Ministerio de Energia) designs and co-ordinates the plans, policies and norms related to the energy sector, including those relative to renewable energy sources. The ministry has a programme targeted at reducing the energy gap of rural areas and vulnerable sectors, prioritising the use of renewable energy sources (Programa de Energizacion Rural y Social, PERYS).
  • • The Ministry of Mining supports the development, growth and sustainability of mining activity in Chile.
  • • The National Service for Training and Employment (Servicio Nacional de Capacitacion y Empleo, SENCE) is a public agency under the Ministry of Employment that promotes the competitiveness of enterprises and individuals through training programmes.

The complex number of ministries and agencies involved in rural policy at the national level is also replicated at the regional level with regional representatives of the main national ministries and public agencies. Most national ministries and those public agencies with sub-national operations have regional delegations (ministerial regional secretaries - SEREMI - in the case of ministries, regional directors in the case of public agencies). These deconcentrated institutions are responsible for carrying out national level policies and programmes within their region. SEREMI and regional directors are nominated and depend from their national ministry or public agency, but in the region they report to the intendente (in the case of SEREMI) and to both the SEREMI and intendente (in the case of regional directors of national public agencies).

Broad-based rural development demands co-ordination arrangements. The presence of numerous institutions playing a role in rural development is normal in OECD countries. Given the broad nature of rural areas, rural policies cannot be the sole responsibility of a specific ministry or agency. Yet, the confluence of numerous actors intervening in the rural development process makes it particularly crucial to develop institutional and planning frameworks that promote a coherent approach between them.

There are few institutionalised mechanisms for promoting rural policy articulation

Chile currently lacks a unified and comprehensive rural development strategy. As was discussed in Chapter 2, rural policy is now currently seen as applying to households and firms in rural areas which are only weakly integrated into the national market economy. Rural policy in this context is part transfer payments to compensate for low-market incomes and part support to help these people and firms become more competitive. While there are strong sectoral policies to support larger commercial firms that are located in rural territory, this is not seen currently as being part of rural policy. This makes it very difficult to articulate or develop coherence around common goals, and to the actions and strategies of the different ministries and public agencies that intervene in rural areas.

The lack of a unified and comprehensive definition about rurality further challenges rural policy coherence. Each ministry or public service dealing with rural development has its own approach to rural development. In principle, all ministries and institutions accept the INE definition about rurality. As argued in Chapters 1 and 2, this definition is very restrictive and far from capturing the demographic and socio-economic characteristics of rural areas. Moreover, ministries often implement their rural development programmes applying a different criterion about rurality. This lack of a shared definition challenges the generation of synergies between different policies implemented in rural areas. For example:

  • • The programme of rural drinkable water of the Ministry of Public Works defines rural localities subject to receive investments from this programme as those with a population between 80 and 3 000 inhabitants and a minimum of 8 households per km2.
  • • The Ministry of Health classifies rural health centres as those attending localities that normally have between 2 000 and 5 000 inhabitants (with a limit of 20 000). [2]

programmes with other institutions intervening in rural areas (SUBDERE, 2013a). This lack of co-ordination occurs among ministries with high involvement in rural areas (e.g. the Ministry of Agriculture, the Ministry of Environment and the Undersecretary of Fisheries). It also occurs between public agencies belonging to different ministries. There is no rural development inter-institutional co-ordination unit or body in Chile. Finally, the lack of horizontal co-ordination may even exist between public agencies belonging to the same ministry: in the case of the Ministry of Agriculture, for example, the activities, programmes and policies of its 12 public agencies are not necessarily planned and implemented in a co-ordinated fashion, which on occasion undermines the interaction among interrelated areas such as agricultural research, forestry research, irrigation and small-scale farmers development.9 There is often a lack of horizontal co-ordination among deconcentrated institutions at the regional level. SEREMI and regional representatives of national public agencies are in an awkward administrative position: SEREMI answer directly to their ministry, as they are regional representatives of sectoral policies; yet they also serve the intendente and work to implement sector initiatives at the regional level in line with the intendente’s priorities. While in theory the priorities of all parties should align, in practice SEREMI will tend to align priorities with their ministry in Santiago (OECD, 2013a). Something similar occurs with the regional representatives of national public agencies: regional offices depend on and are nominated by their national director in Santiago, though in their region they should report to their line SEREMI.10 Here as well, regional directors would tend to align priorities with their national offices in Santiago, where their planning units are located. This situation challenges horizontal co-ordination at the regional level, while putting further controls from Santiago to the policies implemented in the regions.

The presence of too many agencies and instruments makes inter-institutional co-ordination and the generation of synergies more complex. As an example, in the region of Bio-Bio there are currently 68 regional branches of national public agencies. Of course, not all of these institutions are directly involved in rural development issues. But this figure, and the absence of formalised rural development inter-institutional co-ordination instruments gives an example of the complexity of generating synergies between the broad variety of programmes and institutions with implications for rural development.

Institutional fragmentation and co-ordination failures often result in duplicity or overlapping of public programmes and resources in rural areas. There are different examples that could illustrate this: INDAP works in parallel to FOSIS for supporting subsistence farmer’s food self-sufficiency;11 many institutions intervene in providing irrigation and drinkable water in rural areas, including the MOP, INDAP, the National Irrigation Commission and the Ministry of Health,12 often with overlapping or uncoordinated actions; two institutions intervene in parallel for the provision of tourist signs in rural areas with the indigenous population: CONADI and the National Tourism Service (Sernatur).

There are efforts to improve inter-institutional co-ordination

The government of Chile launched strategic regional plans -Planes Presidenciales- containing the areas and productive axis in which the central government will focus its action in each of the 15 Chilean regions for the period 2010-2014. These plans are a good initiative for a better co-ordination of the different central government ministries and institutions related to regional development. However, even if some plans integrate actions and plans for rural development, the plans tend to have a sectoral focus missing an integrated view of rural development. At the same time, Sub-national actors took a secondary role in the elaboration of these regional plans, and the strategies lack a solid connection with the regional government’s development strategy.

There are several examples of voluntary inter-institutional co-ordination through joint plans and projects. These agreements occur both between different ministries and institutions, as well as between public agencies belonging to the same ministries, that voluntarily agree to co-ordinate efforts and resources towards a common rural development goal (Box 3.1). Moreover, given the broad distribution of INDAP’s offices in rural areas13 and their long-standing experience working in the field, sometimes in isolated areas and communities, sometimes they serve as a base or local headquarters for other public agencies. Yet these agreements and joint actions are very dependent on the personal relationship between the heads of the public agencies and institutions.

These efforts, however, tend to be the exception rather than the norm. Inter-institutional co-ordination in rural development is not the result of institutionalised planning frameworks, but rather a combination of ad hoc initiatives and the capacity and relationships established between the heads of different public institutions (OECD, 2009a). The fact that the heads of public institutions frequently rotate, and that some policy programmes do not transcend policy periods, leave this ad hoc inter-institutional co-ordination in a fragile position. In this regard, there is an extended feeling among public and private actors about a lack of inter-institutional dialogue, resulting in overlapping of initiatives (SUBDERE, 2013a).

Box 3.1. Some examples of inter-institutional rural development programmes and agreements

The Programme of Rural Infrastructure for Territorial Development (PIRDT) is managed by SUBDERE, jointly financed with resources from the regional governments’ FNDR, and operated by several public agencies of the MOP. The main objective of this programme is to improve access to basic infrastructure (water, sanitation, electricity), transport infrastructure and telecommunications of rural areas.

Recently CIREN carried out research to evaluate the soil erosion in the different regions and territories of the country. This research was financed by INNOVA-CORFO and counted with the participation of CONAF, the SAG and Odepa.

In recent years, SENCE and INDAP have reached an agreement to provide training to farmers in different regions of Chile. During the 1990s they jointly carried out a programme to train and improve the entrepreneurial skills of youth indigenous inhabitants of rural areas (Durston, 2001).

These inter-institutional agreements and programmes are often carried out between public agencies belonging to the same ministry, like INDAP and INIA (INDAP, 2013a), or CONAF and INDAP (Infoandina, 2013).

Finally, often these agreements are reached at a regional level, where representatives of different institutions decide to join forces and resources to work towards a common goal. For example, in O’Higgins there was an agreement between INDAP and the Ministry of Housing and Urbanism (MINVU) to jointly provide information to rural dwellers about the characteristics and requisites of housing programmes in rural areas.

Sources: Durston, John (2001), “Capacitacion microempresarial de jovenes rurales indigenas en Chile: Lecciones del CTI del Programa ‘Chile Joven’ (SENCE/INDAP) en dos comunidades mapuches”, Economic Commission for Latin America and the Caribbean (ECLAC), United Nations, Santiago, INDAP (2013), “INDAP e INIA tamel aike generan trabajo conjunto para fortalecer atencion de pequenos productores agropecuarios”, INDAP, Santiago, 13 June, para-fortalecer-atencion-de-pequenos; INDAP (2013), “Pequenos productores agricolas podran capacitarse tras firma de convenio con sence”, INDAP, Santiago, 13 May, productores-agricolas-podran-capacitarse-tras-firma-de-convenio-con-sence; Infoandina (2013), “CONAF e INDAP firman alianza por el medio ambiente en Chile”, Infoandina, Lima, Peru, 11 June,

In recent years, some institutional initiatives, programmes and governance reforms also suggest a move towards greater emphasis on the regional dimension. This was the case, for example, with initiatives like the regional agencies for productive development or the programme “Chile Emprende”. In this regard, aware of the importance of including a place-based approach in national policies, national ministries and institutions have launched different programmes and strategies that search to strengthen vertical co-ordination between national and sub-national planning priorities and which give a higher salience to the participation not only of sub-national governments, but of the communities subject to benefit from these initiatives, as it can be the case with INDAP’s Local Development Programme (Prodesal).

But, as in the case of horizontal inter-institutional co-ordination, vertical interaction between central and sub-national government institutions and actors tend to occur in an ad hoc manner. Often it depends on the strength, independence and regional attachment of the given intendente or head of the public service, or in the relationships or the capacity of the given municipality or mayor to influence the decision of national institutions.

Given the strong centralism of Chile, the role of sub-national actors tends to be still subsidiary, more focused on approving plans and models previously decided by the national actors than on actively participating in the definition of these plans. Encouraging more active participation of sub-national actors in these initiatives would be crucial to reflect the specific territorial needs and realities, and to gain the buy-in and support of local actors to these central government initiatives (OECD, 2009a; 2013a).

The following section focuses on examining the different elements to promote efficient institutional frameworks for generating co-ordination and synergies between the different actors and policies that currently intervene in rural development in Chile. The section after that, in turn, will focus on how to increase the involvement of sub-national actors in rural development, as a way to strengthen bottom-up initiatives closer to the needs and realities of the diversity of the rural territories of Chile.

  • [1] Office of Agricultural Policies and Studies (Oficina de Estudios y PoliticasAgrarias, ODEPA). ODEPA advises the Ministry of Agriculture on policiesrelated to production and international trade. It also provides services such aslegal advice, evaluation and monitoring of the budget of the ministry’s agencies,and co-ordination of international technical assistance and co-operationprogrammes.
  • [2] The Ministry of Education considers a school rural if it is located beyondfive kilometres of the urban limit. There is a lack of fluent and institutionalised interactions between the many actorsthat intervene in rural development. Each institution has its own vision, and oftenoperates in silos without interacting and co-ordinating its actions, policies and
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