Page:CREST-Allendes Chile Supply Demand Gap.pdf/7

  Because these state-controlled farmlands now account for about half of Chile's agricultural capacity, the lack of competent technicians and managers has seriously hurt output.The problems of poor production incentives for private farmers and of badly managed state lands are much more serious now than in the 1960s because of the increasingly indiscriminate land reform. The Frei administration's program did not disrupt output seriously until late in the term, when highly productive farms began to be expropriated. Few poorly managed estates remained in private hands by the time Allende took office, and Chile's most productive large and medium-sized farms thus have been the main victims of the subsequent expropriation campaign. Moreover, the pace of expropriation speeded up markedly, as shown in Table 2. Because the farms taken over had provided much of Chile's marketed output, foodstuff deliveries to urban areas have dropped sharply.

The magnitude of production losses resulting from Allende's agrarian policies became apparent in 1971/72. Wheat, which accounts for about 15% of farm output and almost 40% of the caloric intake, suffered a 35% production decline. Because it can be grown relatively quickly and cheaply, wheat often has served as a "hedge" crop for nervous private farmers, and 1970/71's record crop stemmed in part from the uncertain political climate during the presidential race. Last year's poor crop - the 