The Chilean wheat sector faces a challenging 2024-2025 season due to various factors. Rising production costs, a concentrated milling industry and structural problems in the marketing processes, characterized by a large number of suppliers, are some of the causes that have made the sector more complex.

Faced with this scenario, the Ministry of Agriculture began work that seeks to align the national wheat supply with the demand of the milling industry, enhancing the competitiveness of the sector and promoting a transition to contract agriculture that allows it to respond to new market demands. In this way, it announced a series of actions that will be carried out between the public and private sectors.

“Within the framework of the execution of the Sovereignty Strategy for Food Security, the Ministry of Agriculture recognizes the importance of this chain to guarantee access to essential foods for Chilean families. That is why, and as President Gabriel Boric promised at the last National Agricultural Meeting ENAGRO 2024, our ministry began to deploy an early action plan that demonstrates our commitment to strengthening the wheat sector, responding to its immediate needs and building a solid strategy for its future sustainability,” said the Undersecretary of Agriculture, Ignacia Fernández.

Contract agriculture model and other initiatives

The action plan that will be implemented to support this important productive sector considers short, medium and long-term measures.

Among the immediate initiatives is the holding of regional workshops promoted by the Office of Agrarian Studies and Policies (ODEPA), which will provide key information on production costs and the importance of local production in the milling of national wheat. This initiative seeks to generate greater transparency and potentially influence the determination of fairer prices by the industry.

On the other hand, the Agricultural and Livestock Service (SAG) will be implementing a dissemination campaign on the Law of Commercial Transactions in the wheat sector, between October 2024 and March 2025. During the harvest, in addition, dissemination of weekly harvest reports will be carried out and on-site inspection will be reinforced, thus guaranteeing compliance with regulations and strengthening transparency in transactions between producers and millers.

If market conditions warrant it, the state-owned company Comercializadora de Trigo (COTRISA), under ministerial mandate, could activate a purchase program focused on small producers who use the Institute of Agricultural Development (INDAP), ensuring fair prices and stability for this segment. This is possible thanks to the recent capitalization of the company, achieved in 2024 to return it to its strategic role in the wheat chain.

The Undersecretariat of Agriculture, together with other public actors in the sector, is also considering the implementation of an initiative that addresses market asymmetries between producers and the milling industry, through the proactive carrying out of flour quality sampling.

For 2025, the creation of a pilot to develop a contract agriculture model between Mapuche communities in the Araucanía region and local milling is also being considered. This seeks to generate an experience that can be replicated in other regions, ensuring the inclusion and development of small producers in the wheat value chain, through the promotion of associative marketing instances. ODEPA, meanwhile, is leading a consultancy to evaluate the benefits and feasibility of contract agriculture in the wheat sector. The results will be presented at the aforementioned regional workshops, offering new marketing tools and economic stability for producers.

The Institute of Agricultural Research (INIA) will also systematize the information associated with the current wheat varieties at the national level and their respective flour qualities. This is done with the aim of providing information to the wheat-flour-bread chain that will allow for the alignment of demand and supply of wheat, a fundamental part of the daily diet of Chilean families.