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Jorge Temer Cuevas: Ideas from the "Old World" aid agriculture in Chile

Jorge Temer Cuevas’ company is based at Victoria in the middle of Chile. Servicios Agromalleco Spa is a major agricultural machinery dealership there. This businessman is also proud to be a member of the DLG, recognising it as a platform for innovation in agriculture: ideas offering new efficiencies for farming in his country.

Servicios Agromalleco operates in a region where rural wellbeing currently faces substantial challenges. These include the survival of family farms, their production under changing climate conditions including increased incidences of drought, unseasonable frosts and hailstorms. Another ongoing problem features political unrest in the agricultural sector. “Our region used to be called the granary of Chile. Now people refer to it as the red zone.” Instead of small and medium-sized farms concentrating on production efficiencies, there’s damaging violence and unrest between different groups in rural areas. Some want redistribution of land farmed by descendants of settlers from Germany, Italy, Spain, Switzerland and France. But food production still has to be increased.

This businessman sees one solution in closer contact with innovative European machinery makers and agriculture researchers - one reason why he wants some German speakers in his company!

1. Señor Cuevas, what developments and ideas from Europe look especially promising for your region of Chile?

First of all, smaller farms in particular are struggling through a legacy of traditional and inefficient agricultural methods. "The match" was a prominent cultivation tool for 40 years here, with straw burning after harvest followed by direct drilling.

Starting some years ago, visits to Agritechnica and information from other DLG events and publications demonstrated the advantages of incorporating organic matter (harvest residues) in the soil through minimum cultivations followed by pneumatic drilling. The benefits are plain to see. It’s therefore no surprise that demand here for the appropriate European machinery grows steadily. In fact, I believe there are about nine makes of tillage and seeding implements (often combinations) of European origin now on the market in Chile.

2. Your area of the country is renowned for fruit production. Does this continue as an important enterprise?

Definitely. Despite the climate changes, our central region still enjoys Mediterranean-type weather. Chile is the world’s biggest exporter of grapes and also of some tree fruit such as plums. But increasing dry periods have meant investment has stagnated. Evidence is a drop in sales of agricultural inputs. Labour and energy input costs have also increased.

While we tend to have plentiful water in our region, with many rivers and a good irrigation infrastructure, the rural violence here currently discourages investment. Big producers and processors are moving further south instead. But all this adversary encourages efficiencies. Farmers are experimenting with different crop varieties and varying sowing dates to make better use of ambient conditions. Labour costs are reduced with bigger tackle. For instance, the average size of tractor has increased in the last 10 years from 90 HP to 200 HP.

3. As in other countries, farmers in Chile earn very little from their produce compared with the price paid by consumers in the market. Is the agricultural sector appreciated enough by customers in the shops?

There are very few players in the market and this controls farmers’ prices to a certain extent. For instance, there are only four important buyers of grain in the country. As for fruit and vegetables, Chile has a scenario similar to that of Europe with mega retail chains taking the biggest slice of profits.

When it comes to customer appreciation of good, fairly-priced, food there is a distinct lack of consumer knowledge of national food production. The fact is that people here have never experienced major food crises, or wars on the scale of European conflicts. The population, therefore, has never been without food and does not give it the value that our agriculture deserves.

4. What do you think is needed now to encourage farming in Chile?

If there is one special factor I and my business colleagues learn on our trips to the "Old World", it is that cooperation is a key to economic survival. Remember, our farmers get hardly any other help: no government assistance is offered and there are no tax or credit benefits.

5. As an important agricultural machinery dealership, what is your company’s strategy for succeeding in this sort of environment?

Servicios Agromalleco has been in the business of selling machinery for just 10 years. Four years ago, we also started an agricultural contracting service. Being relatively new in the sector means we have been right at the front of a generation change, playing a leading role in introducing innovative machinery for new ideas. Soil structure is improving.

We’ve had very good results and built ourselves an important market position in this respect. Now, we’re striving to change this short-term gain into a long-term advantage by working to consolidate customer relationships into lifetime partnerships.