The Ministry of Agriculture and Livestock has launched a pilot phase of the National Voluntary Agricultural Traceability System, with initial focus on potato and onion crops. The programme is being implemented with technical support from the International Regional Organization for Agricultural Health.
The launch comes as the potato sector in Chile faces structural pressure linked to volatile yields, rising costs, and limited market absorption. According to Luis Miquel, general manager of the Papa Chile Consortium, favourable climatic conditions and water availability have become a source of imbalance rather than stability, a situation he describes as "the potato paradox".
Under optimal conditions, yields per hectare can increase from 35 to 50 tonnes. However, domestic consumption is estimated between 750,000 and 800,000 tonnes per year, while production can reach up to 1.4 million tonnes. This gap creates repeated oversupply in the internal market.
"When farmers achieve high yields, prices tend to plummet; and when prices are favorable, few producers manage to profit," Miquel said. He added that the absence of mechanisms to regulate volumes or redirect excess product into processing leaves growers exposed to price collapses and financial stress.
Production costs have also increased sharply in recent years. Miquel noted that cultivation costs rose from around 6 to 7 million pesos per hectare four years ago to more than 12 to 13 million pesos today. Additional outlays for irrigation and certified seed further raise capital requirements. While recent exchange rate movements have lowered prices for inputs such as fertilisers and fungicides, he said these costs do not return to previous levels.
Access to finance has tightened at the same time. "Banks offer you an umbrella when you don't need it and take it away just when it starts to rain," Miquel said, describing stricter credit assessments, reduced lending limits, and higher requirements. This has led some growers to cut costs by using uncertified seed or reducing input use, which may affect future yields and quality.
Miquel warned that continued underinvestment in genetics and crop protection could lead to market adjustments in the coming seasons. He said the long-term solution lies in developing domestic processing capacity, such as frozen potato products, to absorb surplus volumes and stabilise prices.
According to Miquel, progress on industrialisation has been limited by economic and political uncertainty, with capital currently flowing more readily into other sectors. He called for incentives that support industrial investment rather than short-term subsidies, allowing Chile to add value to potato production and reduce exposure to cyclical oversupply.
Source: latribuna.cl / Argenpapa
