67711 DECEMBER 2011 ABOUT THE AUTHORS Eyeing the Future of Agriculture: WILLEM JANSSEN is a Lead Agricultural Specialist in the World Bank’s Sustainable A Vision for Agricultural Innovation in Chile Development Department for Latin America and the Chile is one of the leading agricultural Caribbean (LCSAR), leads the regional work program on producers in Latin America and an agricultural innovation. He also supports South-South activities important player in world agro- and works on the adaptation alimentary markets — a position it is of agriculture to climate change. determined to maintain. In 2008, the RIIKKA RAJALAHTI government (through the Ministry of is a Senior Agricultural Agriculture) requested technical Specialist in the Agriculture and Rural Development assistance from the World Bank to Department of the World Bank, leads the work on define how agricultural innovation can agricultural innovation. She help maintain future competitiveness recently published the Agricultural Innovation and how it needs to evolve. However, Sourcebook. since changes in its agricultural SVETLANA EDMEADES innovation system will pay off more in is a Senior Agricultural Economist in LCSAR, manages the long run than in the short term, Chile needed a realistic assessment of investment operations in what it will take to be an agricultural leader in the future, knowing that Mexico as well a regional capacity-building project on without an understanding of the future, any major investment in agricultural biosafety. She also performs economic analyses on innovation would be like shooting a cannon in the dark. Although many agricultural sector issues. dynamic changes (such as population growth, improved incomes, market BEATRIZ NUSSBAUMER development, climate change, shifting dietary patterns, and advances in is a consultant for the World Bank, operating from Buenos technology) can be identified, mapping and tracing their interaction is highly Aires, Argentina. complex. So the Ministry and the Bank jointly engaged in a visioning exercise APPROVING MANAGER to understand the factors that drive Chile’s agricultural future. This Ethel Sennhauser, Manager, SmartLesson summarizes that exercise and shares some of the lessons LCSAR. learned. Background Chile’s agricultural sector. Chile has a highly dressed today to maintain, and potentially in- diversified agricultural sector. The country has crease, Chile’s future international market been following a free trade development presence. In the last decade, the sector showed model and since the 1980s has been able to a decline in dynamism, partly a reflection of enter many international markets. Among the stagnant productivity growth of the overall export leaders are fresh fruit, processed fruits economy. By the end of 2007, Chile’s total fac- and vegetables, wine, and salmon, and the tor productivity growth was lower than 10 emergence of dairy and white meats. Exports years earlier, a performance that contrasted of timber products have also been increasing. sharply with the previous decade, when pro- ductivity grew by a cumulative 30 percent. The Despite these positive developments, there annual growth rate of agricultural value addi- are implicit challenges that need to be ad- tion was 11 percent in 2004 and only 2 percent SMARTLESSONS — DECEMBER 2011 1 in 2008. Although the sector has seen efficiency gains in change in the past will continue to drive change in the fu- lowering costs within the area of traditional exports as well ture. For several factors that are important for understand- as in increasing productivity and value added, these areas ing the future, such trends can be predicted with reasonable have not yet reached their potential. Also, because of the precision. Scenario analysis recognizes that the future is un- importance of mineral exports, agriculture must compete in certain and that disruptive events are probable. The meth- an environment where exchange-rate appreciation is ex- odology combines the major uncertainties with safer trends pected to be more likely than depreciation. (trend analysis) of major importance into “stories� — sce- narios — about the future. Scenarios are not predictions, or International market dynamics also impose challenges to strategies, but rather are plausible narratives that describe agricultural production at home. Recent surges in the price alternative future conditions in which a country, an organi- of important commodities have made many governments zation, or a system of organizations may have to operate. rethink their trade-based food-security policies in favor of increased emphasis on self-sufficiency. Consumers are be- Scenario planning itself is a structured process of thinking coming more quality-sensitive, demanding healthier and about the future. It is aimed at breaking away from the idea more environmentally and socially responsible products; that the future is a continuation of the past. Such planning they are also making important shifts in their food baskets can provide useful insights about an uncertain future and toward greater consumption of meat and higher-end prod- improve perceptions and judgments in decision making to ucts (such as wine). New markets are quickly opening up, adapt to and shape the future. Thus, scenario planning pro- especially in Asia, where high economic growth and large vides a neutral space for discussion, and it helps with build- populations translate into massive increases in demand. Cli- ing consensus on implications and building a strategic vi- mate change is starting to play a role in the redistribution of sion. Scenario planning relies on collective anticipatory comparative advantages for traditional commodities (to- intelligence to identify emerging trends. It has major impli- ward higher latitudes) and will also affect the location for cations for future decision making; for consensus genera- the production of high-value products. tion to promote greater agreement among scientists, fund- ing agencies, and stakeholders on identified needs or Tools for understanding the future. Two of the several ap- opportunities; and for advocacy and communication. The proaches commonly used to assess and understand the fu- main steps in scenario analysis and vision building are usu- ture are trend analysis and scenario analysis. Trend analysis ally organized around a series of information-gathering and is based on the assumption that the factors that drove knowledge-sharing activities. Figure 1: Shaping a Vision for Chile’s Agriculture and Its Innovation System Activity Output Number of Participants Contribution Toward Other Activities Phase 1: Information Collection and Analysis (October 2009 – December 2009) Four analytical driver studies Driver studies 10 Scenario-building workshop - Science and technology Scenario consolidation - Markets and consumers Vision building for 2030 - The rural context - Environment and climate Information collection on Subsector sheets 15 Scenario-building workshop subsectors Scenario-implications workdays Interviews with remarkable people Interview report 11 Scenario-building workshop and opinion leaders Scenario consolidation Validation of scenario implications Vision for 2030 Phase 2: Participatory Scenario Development (December 2009 – September 2010) Scenario-building workshop Workshop report 30 Scenario consolidation Scenario-implications workdays Scenario consolidation Scenario story lines Project team Scenario-implications workdays Synthesis of scenario implications Vision for 2030 Phase 3: Vision Development (October 2010 – February 2011) Scenario-implications workdays Implications by subsector 80 Synthesis of scenario implications and cross-cutting themes Vision for 2030 Synthesis of scenario implications Vision for 2030 10 + Project team Action Plan Phase 4: Action Planning (January 2011 – August 2011) Organizational and thematic Action proposals on 10 Action Plan position papers specific subjects Action planning Action Plan Project team Consultation and dissemination activities Consultation and dissemination Validated Action Plan 150 participants in Annual action and budget proposals activities meetings + Web feedback 2 SMARTLESSONS — DECEMBER 2011 Scenario Planning and Vision Building in Chile and Poloc (a consultant group). During a series of plenary sessions and smaller working groups, the participants de- The process of scenario planning and vision building in veloped four scenarios. Chile consisted of four phases (see Figure 1). Here we will elaborate the first three phases, where the stakeholders are Scenario Consolidation. Based on the inputs from the brought together and the vision is formulated. workshop participants, the core team developed a com- prehensive description of how the future would look in Phase 1: Information Collection and Analysis 2030 under each of the four scenarios. They submitted the scenario story lines for validation to the original Driver Studies. Four driver studies were commissioned to workshop participants, the scenario team, other experts provide past and future contexts for markets and trade, ru- in Chile (more than 72 people), and five external peer ral policies and rural development, natural resource man- reviewers. One scenario was considered implausible and agement and climate change, and science and technology. did not receive further attention. The team incorporated The studies identified key trends that could be used for de- the feedback and finalized the scenarios, emphasizing fining and building the scenarios. Based on each study, a Scenario 2 (called “Terra Calida�) and combining Scenar- short summary was produced and shared during the first ios 1 and 3 into a “Business as Usual (BAU)� scenario (see workshop. Figure 2). Cluster Information. Information on seven clusters (fresh Phase 3: Vision Development fruit, processed food, wine, native forestry, dairy, red meats, and cereals) was used during the scenario-building process Implications Workdays. The focus of the workdays was and in the discussions on scenario implications. on sharing the two main scenarios and drawing the im- plications for seven clusters (fresh fruit, processed food, Interviews. Further inputs and out-of-the-box ideas — gath- wine, forestry, dairy, red meat, and cereals) and three ered through interviews with 11 “remarkable� people and cross-cutting themes (natural resource management, opinion leaders representing a wide range of views from human resource development, and quality manage- the public and private sectors as well as academia and civil ment). Each workday was comprised of a discussion, society — contributed to identifying important elements of among a group of experts, on each cluster and cross- the vision for 2030. cutting theme. Phase 2: Participatory Scenario Development Synthesis. The core team from FIA and the World Bank then drew the implications, focusing on the common challenges Scenario-Building Workshop. A group of 24 experts from across clusters and scenarios. The next step was to formulate the public and private sectors, academia, and civil society a vision (summarized in Figure 3). The vision is based on the participated in the workshop in Santiago in December previously derived implications, but it goes one step further: 2009. Workshop facilitators included staff from the World it represents not only an analysis of future challenges and Bank, the Chilean Foundation for Agrarian Innovation (FIA), opportunities but also an ambition. Figure 2: Scenario Framework for Chile’s Agricultural Innovation System SMARTLESSONS — DECEMBER 2011 3 Figure 3: A Vision for Chile’s Agriculture in 2030 Lessons Learned • Formulating ambitions. The development of a vision that expresses an ambition made the study interesting to the Lesson 1: The process of formulating a vision for political players in the sector. Politicians cannot easily sell something as broad and complex as agricultural innova- the need for more institutional integration or long-term tion in Chile has value in and of itself. research, but they can piggyback those measures onto the ambition for higher farm incomes or less pollution. The vision-building process taught both the World Bank team and the client to think about the future as not just an extension • Forgetting differences of opinion, for now. The forward- of the past. This is not an easy task, because it requires a high looking nature of the study motivated strong participation level of trust and a willingness to disengage from what is and and interest in its results. By looking far into the future, venture into what could be. It tested both skeptics and participants ensured that several issues that had been optimists. Hence, the value is not only in the final product (the forgotten or considered out of bounds regained vision) but also in the process. relevance and received attention. Lesson 2: Benefits of the approach derive from its • Robustness. Somewhat by chance, the approach proved constructive, creative, and collaborative features. politically robust: the work was started by a left-leaning government and finished by a right-leaning government. The involvement of many different people (former Nor did the second-biggest earthquake in the history of presidents, ministers, journalists, scientists, businessmen, the world derail the study. farmers, and so on) was highly productive. For example: Lesson 3: The local partnership was key to success. • Creative collaboration. The discussion was held in simple, frank language. Participants shared and developed Vision building is labor — and communication — inten- knowledge and linked it to action. The plan recognized sive. Only the national partner could have organized that Chile has sophisticated ambitions and is not satisfied the many consultation and dissemination sessions. with imitating wealthier countries. Identifying resource people (for background studies and workdays) requires in-depth understanding of the 4 SMARTLESSONS — DECEMBER 2011 national setting. And if someone (a journalist, an entrepreneur, or a student) has questions, someone must be there who can answer the phone. Conclusion Chile is now starting the implementation of the Action Plan that grew out of the vision-building process in order to strengthen its agricultural in- novation system. But the results of the work will not stop with Chile. The World Bank team has re- ceived inquiries about applying this approach to improving agricultural innovation systems in other countries in Latin America (for example, Peru and Colombia) as well as in other regions, such as Rus- sia. The end for a vision in Chile is just the begin- ning elsewhere… DISCLAIMER SmartLessons is an awards program to share lessons learned in development-oriented advisory services and investment operations. The findings, interpretations, and conclusions expressed in this paper are those of the author(s) and do not necessarily reflect the views of IFC or its partner organizations, the Executive Directors of The World Bank or the governments they represent. IFC does not assume any responsibility for the completeness or accuracy of the information contained in this document. Please see the terms and conditions at www.ifc.org/ smartlessons or contact the program at smartlessons@ifc.org. 5 SMARTLESSONS — DECEMBER 2011