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Viewing cable 08SANTIAGO597, CHILE'S SOUTH IS SALMON COUNTRY

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Reference ID Created Released Classification Origin
08SANTIAGO597 2008-06-24 16:17 2011-08-25 00:00 UNCLASSIFIED Embassy Santiago
P 241617Z JUN 08
FM AMEMBASSY SANTIAGO
TO SECSTATE WASHDC PRIORITY 3428
INFO DEPT OF AGRICULTURE WASHDC
DEPT OF COMMERCE WASHDC
UNCLAS SANTIAGO 000597 
 
STATE FOR WHA/BSC 
AGRICULTURE FOR OCRA - BZANIN 
COMMERCE FOR KMANN 
 
E.O. 12958: N/A 
TAGS: ETRD ECON PREL CI
SUBJECT: CHILE'S SOUTH IS SALMON COUNTRY 
 
1.  Summary:  Ambassador and Foreign Agricultural Service Attach 
visited Chile's salmon industry from June 5-8.    Salmon and trout 
production are the main components of Chile's second-largest (after 
copper) export industry.   Fish exports are valued at over $2.2 
billion annually, representing nearly 4 percent of Chile's total 
exports.   The industry has come under increasing pressure due to 
lax environmental regulation.  The Bachelet administration 
acknowledged significant problems by ordering the Minister of 
Economy to increase oversight and regulation.  End Summary. 
 
2.  The Ambassador visited Chile's tenth region, accompanied by the 
Foreign Agricultural Service Attach (FAS), from June 5-8 mainly to 
take stock of Chile's all important salmon sector.  The salmon 
sector has come under increasing pressure in recent months from the 
international media, environmentalists and the spread of a virus 
deadly to the fish themselves.  The industry is overwhelmingly 
located in and around Chile's main southern port of Puerto Montt. 
This geographic concentration is seen as one of the key components 
of the sector's explosive growth as well as current problems. 
Second only to copper in terms of dollar value of Chilean exports, 
salmon exports were USD 2.2 billion in 2007 (one third of which went 
to the U.S.).  The industry is also a key employer, with 53,000 
direct employees and up to 100,000 jobs indirectly linked to it. 
 
3.  The Ambassador met with General Manager Rodrigo Infante of 
Salmon Chile, an industry association representing nearly 80 percent 
of salmon companies operating in Chile.  Chile primarily produces 
Pacific and Atlantic salmon.  Pacific salmon is exported to the 
Japanese market, and Atlantic salmon to the United States.  The 
industry says it welcomes further cooperation with food inspection 
agencies in the United States (the Food and Drug Administration) and 
in Chile (the Servicio Nacional de Pesca or SERNAPESCA).  On paper, 
Chile has a relatively sophisticated system for monitoring 
aquaculture.  Growing conditions and production inputs are carefully 
documented, and the industry has a sophisticated system for tracing 
every fish from the hatchery to the store where it is bought. 
Nonetheless, the picture is not entirely rosy. 
 
4.  Infante of Salmon Chile told the Ambassador that with the 
ongoing outbreak of Infectious Salmon Anemia (ISA), the industry is 
likely to reduce its production.   Infante also mentioned the New 
York Times article of March 2008, which criticized the use of 
antibiotics and generally portrayed Chile's industry as unregulated 
and unhealthy.   In response, he pointed out that Chilean salmon is 
consumed daily by more than 6 million people worldwide in some 60 
international markets.  Despite these impressive figures, everyone 
from President Bachelet on down has acknowledged that the industry's 
success has also brought problems.  In the wake of the negative 
publicity beginning with the New York Times article, she appointed a 
panel lead by Minister of Economy Lavados to increase regulation and 
oversight. 
 
5.  The Ambassador and FAS attach also visited Multiexport Foods 
lake operation in Lake Llanquihue.  This site produces over 12 
million juvenile salmon per year for later transport to ocean farms. 
 According to industry officials, aquaculture poses a limited 
environmental impact, which is localized and fully reversible 
through natural processes.    However, local contacts tell the 
Embassy that other trout species have disappeared since the salmon 
and trout farming activity started. 
 
6.  Comment: Although the Salmon industry as done extremely well 
over the last ten years, with double digit growth rates the norm, 
this very success is coming back to bite it.  It is having trouble 
maintaining the outbreak of diseases and minimizing its 
environmental impact.  The industry has simply been unregulated too 
long, in addition to being too concentrated geographically.  The 
Bachelet administration is trying to increase oversight and move the 
sector to a more sustainable path.  In addition to the visit to 
Puerto Montt, the Ambassador has met with salmon industry 
representatives in Santiago.  The Embassy will continue to monitor 
the health of the sector and the possible implications for the 
health of the U.S. consumer. 
 
URBAN