MercoPress. South Atlantic News Agency

Chile fruit industry calls for higher valued US dollar

The annual convention of Chile's federation of fresh fruit growers (Fedefruta) began with a strong appeal for the government to push for a higher valued U.S. dollar.

"It is not just the fresh fruit sector, but rather the nation's export model that is endangered by the shadow of the low valued U.S. dollar," said Fedefruta president Rodrigo Echeverría to the gathering of more than 500 fresh fruit growers. "The current U.S. dollar - Chilean peso exchange rate of 538 pesos to the dollar has put a tremendous strain on us all, and threatens Chile's effort to become a world leader in food and fruit exports."

Chile is currently awash in U.S. dollars, the result of record high copper prices. Chile is the world's most important supplier of copper, providing about one third of all world copper resources. The abundance of dollars in the country has lowered the dollar value, hurting fruit industry profits, which are mostly paid in U.S. dollars.

Fruit industry overhead, of course, is paid in Chilean pesos.

Echeverría added he was disappointed that the government's recently announced 2007 budget was premised on a US dollar/peso exchange rate of 555 pesos, and also pilloried the government for providing too many protections for Chile's labor force.

"Excessive protection for Chile's workers serves as a brake to all economic activity in our sector," said Echevarría.

Chilean President Michelle Bachelet, a Socialist, was elected in January on a platform aimed at improving working conditions for Chileans, especially women, who form a large part of the fresh fruit industry's labor base.

Chilean Agriculture Minister Ãâ€Å¾lvaro Rojas, also speaking at the convention, responded that the government was working to increase the value of the U.S. dollar, but also insisted Chile's growers must seek greater efficiencies in their industry.

"The fresh fruit sector must become more competitive," said Rojas. "For example ? why does the fresh fruit industry in California use half the number of man hours as do growers in Chile? What elements do they have that give greater productivity to their work? As a country we are not about to go against basic economic rules and create a false, floating value for the dollar. What we want is an industry that can adjust to new circumstances in the market in order to maintain the profit level required."

Chile's 2 billion US dollars fresh fruit industry supplies about one half of all the fresh fruit consumed in Northern Hemisphere countries during their winter months. In the 2005-2006 season just ended the industry exported more than 230 million cases of fresh fruit, led by table grapes (105 million cases), apples (40.7 million cases), kiwifruit (15.5 million cases) and plums (11.3 million cases).

In related news, President Bachelet named a high level presidential panel Wednesday to steer the country toward policies that will make it world powerhouse in industrial agriculture? upping its total food exports from the current 8 billion to 17 billion US dollars in the next eight years.

The aim of the "Chile Promotes Food" panel, said Bachelet, is to make the country one of the world's top ten agricultural exporters. Included on the 29 member panel are Fresh Fruit Export Association president Ronald Bown and former Fedefruta president Luis Schmidt, who now leads the National Agricultural Association, the nation's most important farm lobby.

By Steve Anderson The Santiago Times