Agricultural Development, Smallholder Support and Natural Land Cover in Chile

Agriculture plays an important role in maintaining rural livelihoods and landscapes, but agricultural development can also increase pressure on natural land cover. This article investigates this relationship in Chile by considering three dimensions of agricultural development: commercial agricultural area, agricultural output per unit of land, and public support to small-scale producers. Annual data for the period 2000–2022 are analysed using fully modified cointegrating polynomial regression and an error-correction model. The results show that commercial agricultural area is negatively associated with natural land cover, while agricultural output per unit of land presents a positive association. Public support for small-scale producers presents a U-shaped association with natural land cover: increases in support are associated with lower natural land cover below the estimated turning point and with higher natural land cover above it. The error-correction coefficient is negative (λ = −0.534) and statistically significant at the 5% level under conventional standard errors (p = 0.0127), although significance is retained only at the 10% level under HC3 robust standard errors (p = 0.0506). This suggests conditional evidence of adjustment towards the estimated long-run relationship, subject to the inconclusive cointegration tests. Complementary tests provide inconclusive evidence of cointegration, implying that the estimated long-run relationships should be interpreted as conditional associations rather than causal effects. These results show that dimensions of agricultural development can be associated with natural land cover differently, suggesting that productive, social and environmental objectives need to be considered jointly in designing and evaluating agricultural and rural development policies.