Chile - Review of ten-year national development program (Vol. 2 of 3) : Part II : Chapters 4-8 agriculture, industry, mining, fuel and power, building and urban development

RETURN TO R E S T R I C T E D FOtPORTS DESK ~~j 0iPORTS DESK !1 r raDv ~~~Report No. WH-116b WITHIN r COY r ONE WEEK This report was prepared for use within the Bank. It may not be published nor may it be quoted as representing the Bank's views. The Bank accepts no responsibility for the accuracy or completeness of the contents of the report. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT A REVIEW OF CHILE'S TEN-YEAR NATIONAL DEVELOPMENT PROGRAM Part II: Chapters 4-8 Agriculture Industry Mining Fuel and Power Building and Urban Development April 9, 1962 Department of Operations Western Hemisphere  TABLE OF CONTENTS PART TWO (CfhAFTEFS 4-8) CHAPTERS PAGE (numbering is self- contained within each chapter) 4. AGRICULTURE The Government Program ............................... 1 The Present Agricultural Situation ................... 6 Mlission Recommendations .. ...... *. 10 Sunmary of Conclusions . ............ ....... ......... ... 29 Appendix Table 4: Details of Agricultural Investments, 1961-70 .. ................. . 36 5. INDUSTRY Current Status . ...................................... 1 The Government Program ....... ........................ 3 Specific Aspects of Program .......................... 8 Appendix 5-A: Projection Techniques .................. 15 Appendix 5-B: Forest Products ....................... 20 Appendix 5-C: Probable Steel Consumption ........... 28 Appendix 5-D: Beet-Sugar Refining ................. . . 32 Appendix 5-E: Fish N4eal Industry .................... 34 Appendix Table 5: Ten-Year Development Program for Manufacturing Sector, with Projections of Financing Methods and Foreign Exchange Expenditures .......... 39 6. MINING Recent Trends ........................................ 1 The 'Program ....... 0.0........................... 4 Evaluation ,.,......*.* ........* 6 7. FUEL AND POWER Recent Trends ........................... ........... 1 The Program for Fuel and Power ....................... 2 8. BUILDING AND URBAN DEVELOPMENT The Program ........ . ........... ... . 1 Background for the Program ..... ...................... 7 Appraisal: Housing Policy and the Urban Housing Program ........ *.* ................. 13 Appraisal: Rural Housing ........................ . 18 Appendix Table 8: Construction -- Ten-Year Investment Program ........ ......................... 22  PART TWO THE SECTOR PROGRAMS  - 1 - CHAPTER 4 AGRICULTURE I. THE GOVERNMENT PROGRAM Targets 1. The 10-year agricultural development program is aimed at in- creasing agricultural incomes, obtaining more efficient use of available agricultural resources, and improving Chilets agricultural trade balance. The plan provides for greater self-sufficiency as well as a diversified production in line with Chile's natural advantages. Table 4-1 Projected Increase in Agricultural Production, 1961-70 (1961 = 100) Total Crop Livestock Seafood Year Production Production Production Production 1961 100.0 100.0 100.0 100.0 1962 101.8 102.5 100.7 108.0 1963 105.2 107.3 102.1 116.4 1964 109.9 113.5 104.7 125.9 1965 116.5 120.8 110.3 135.8 1966 123.4 126.9 118.0 146.1 1967 131.1 133.9 126.5 157.3 1968 140.6 141.3 138.5 169.6 1969 150.3 147.6 152.4 183.0 1970 162.0 155.0 169.5 198.9 Annual Rate 5.5% 5.0% 6.0% 7.9._ 2. The plan target calls for increasing agricultural production at an average annual rate of 5.5% between 1961 and 1970 (Table 4-1). Within this overall increase, livestock production is expected to increase at a rate of 6.0%, crop production at 5^0%, and fisheries production at 7#9%v Livestock prodLction would rise slo-wly at first but would increase rapidly toward the end of the program. 3. The projected increases in food production (Table 4-2) could bring per capita food availability much closer to minimum nutritional levels and would also improve the present adverse trade balances in food.  - 2 - 4. AGRICULTURE Table 4-2 Projected Production Increase in Some Basic Commodities (1,000 tons) Edible Years Wheat Oils Sugar Fruits Bee f- Muttonl/ Milk (liters million) 1960-61 1,194 24.8 48.6 304.4 125 31 770 1964-65 1,235 43.3 91.8 365.4 147 38 971 1969-70 1,429 64.3 126.0 535.9 217 57 1,369 1, Revised Livestock Program. Increases in meat, sugar, wheat and edible oil production could provide annual foreign exchange savings estimated at $88.6 million by 1970. The yearly average trade deficit in agricultural products, amounting to $63.4 mil- lion in 1955-59, would be reduced to $51.1 million by 1970. Policies for Implementing the Plan 4. To achieve these increases in production, major emphasis is to be placed on increasing average yields per hectare through more inten- sive use of the land. Only 150,000 hectares of additional land would be brought into cultivation through improved drainage. On the other hand, 395,500 hectares of land are to be newly brought under irrigation, and present irrigation installations are to be improved on 607,800 hectares. There is to be a major shift in cropping pattern (Table 4-3) through improvements in water control, which will result from irrigation and drainage investments. Natural pastures are to be sharply reduced to pro- vide for increased plantings of annual crops, garden produce, vineyards, orchards and cultivated pasture. 5. These changes in cropping, along with wider use of modern farming practices, are to be facilitated by a sharp expansion of the agricultural extension services and a major reorganization of the Minis- try of Agriculture. To attract more trained personnel, efforts will be made to improve the terms and conditions of service for agricultural technicians. Agricultural credit -- medium-term and long-term develop- ment loans and short-term crop production loans -- is to be consider- ably expanded, particularly for smaller farmers who have had no access to credit on reasonable terms. Trade and pricing policies will be re- viewed with a view toward greater incentives for expanding agricultural production. Transportation, marketing and storage facilities will also come in for attention, to give the farmer a larger share of the consumer dollar. In addition, Government intends to improve the economic and social conditions of the farm labor force, through such measures as adjusting and enforcing minimum wage levels, expanding the rural housing program, and establishing a program for land distribution.  Table 4-3 4. AGRICULTURE Land vz, :ntt.*-in of -rable Land (L,JUU nectares) Land Use 1960-61 1969-70 Annual Cropsa/ 1,410.5 1,703,1 Garden Produce 61.3 83.5 Vineyards and Fruitsk/ 160.5 212.0 Cultivated Pastur s;' 1,180.8 1,83J.9 Natural PasturesD 1,999.0 958.4 Fallow Land 705.0 852.0 Total 5,517.2 5,639.8 a/ Includes cereals, leguminous plants, potato, fodder beet, and indus- trial crops, except oil olives; garden produce, which is listed separately, is excluded. b1 Includes oil olives. c/ Irrigated and dry. The Investment Program 6. The plan calls for gross investments in the agriculture sector of E