Evrópusambandið um landbúnað á Íslandi

Evrópusambandið hefur margt áhugavert að segja um stöðu landbúnaðarmála á Íslandi í rýniskýrslu sinni frá árinu 2009.

Chapter 11 – Agriculture and Rural Development


Agricultural policy in Iceland is based on two main legal acts:
• Act No 99/1993 on the Production, Pricing and Sale of Agricultural Products, which lays
down the policy framework as well as provisions for production control, provisions on
slaughter and processing, market measures and producer support.
• Act No 70/1998 on Agriculture, which lays down provisions for development projects,
extension services and livestock improvement

Iceland’s agricultural policy focuses on food security, food safety and food quality, maintaining
and strengthening rural activity, environmental sustainability and maintaining farm income. The
main objectives of Iceland’s agricultural policy, as stated in Act No 99/1993 are:
• Promotion of structural adjustments and increase of efficiency
• Guarantee sufficient supply of domestic agricultural products
• Income of farmers to be equitable with that of comparable occupations
• Use of domestic inputs in order to promote security of production and employment
• Equality between producers with respect to output prices and access to markets.

Overall responsible for agricultural policy is the Ministry of Fisheries and Agriculture that
covers policy making, overall control issues as well as certain direct administrative tasks. The
Food and Veterinary Authority (MAST) is responsible for a range of administrative tasks that
involve direct contact with the producers. Iceland stated that its administration is small and cost-
efficient with a small number of staff and relatively simple procedures. The Farmers Association,
including its local branches and local authorities, are involved in the implementation of
agricultural support, including payment to the farmers.
Icelandic agriculture receives a high level of support. The Produced Subsidy Equivalent (PSE),
as calculated by the OECD, is 47% of the total value of agricultural receipts in 2009. (EU-PSE
was 23% in 2009). In addition to import tariffs on agricultural products entering Iceland, farmers
receive financial support through direct payments. Direct payments are granted to livestock
producers, dairy producers and producers of certain greenhouse products (tomatoes, cucumbers
and sweet peppers). Price controls apply only to the dairy sector with both minimum producer
prices for farm gate milk and for certain dairy products. Supply control is also applied only in the
milk sector via a quota system.


The Farmers Association manages the individual payments to holders of entitlements provided
that all relevant conditions are fulfilled. The Farmers Association receives payments from the
Ministry of Finance on the basis of a cash flow plan for each month of the year that needs to be
confirmed in advance by the Ministry of Fisheries and Agriculture. The Ministry of Fisheries and
Agriculture reviews the overall accounts on a monthly basis.

The Icelandic National Audit Office audits all Ministry books and receives all accounts from the Farmers Association.
The municipalities are responsible for surveillance of livestock. The Soil Conservation Service
of Iceland has control functions as regards the general conditions of the grazing areas.


State aid for agriculture in Iceland consists mainly of direct payments to farmers. In addition
there are several smaller payments which comprise, amongst others, measures to support
marketing of certain products, support for extension services, livestock improvement, electricity
subsidies for greenhouses, utilisation, storage and marketing of wool as well as education and
research. In terms of rural development, there are several budget headings supporting an array of
projects like organic farming, grain cultivation, grazing control and land utilisation,
environmental efforts, drainage and calcium spreading on fields and diversification. The state
further supports five regional programmes for afforestation and several soil conservation


Trade measures are based on the WTO agreement, the EEA, more than 20 Free Trade
Agreements negotiated jointly with the EFTA-states (separate bilateral agreements on
agriculture) and agreements with Norway and the Faroe Islands. Export subsidies were abolished
in 1992.

Iceland applies relatively high import customs duties on most agricultural products that are
produced in Iceland. The duties vary according to the agreement they are based on. Iceland states
that their Most Favoured Nation (MFN) tariff is 30% ad valorem and a specific rate of duty
varies from 5 ISK/kg to 1462 ISK/kg. For the WTO minimum access quotas, e.g. meat, dairy
products and processed meat, the in-quota tariff rate is 32% of the base rate of duties in the
Icelandic WTO schedule. For the WTO current access quotas e.g. flowers and other plants,
products and vegetables, Iceland stated that the in-quota tariff rate is up to 30% ad valorem.
Many current access commitments under WTO are not subject to any quota system upon import
due to the fact that applied MFN rates are lower than in quota rates.

The collection and production of farm account statistics is based on Act No. 63/1989 on the
Agricultural Economics Institute that lays down provisions for collection of economic
information on farms and their use. Act No. 99/1993 outlines the requirements for agricultural
accounts. Farmers are not obliged to keep official farm accounts and information is not available
on the share and type of farms currently keeping accounts on a voluntary basis. Accountancy
information was collected from over 300 farms for the accounting year 2009 of which the
majority were dairy farms and sheep farms.


Production of arable crops in Iceland is very limited. Climate only allows cultivation of one
cereal: barley. The surface of this crop has increased substantially from 200 ha in 1991 to
4000 ha in 2010, due to warmer climate and breeding of better adapted varieties. The average
yield is estimated at 3.5 tonnes per hectare. Barley is almost exclusively used as fodder for the
animals on the farm where it is grown. There is no market in domestic barley. Barley production
is eligible for a subsidy of around 15000 ISK (€94) per hectare for the first 20 hectares and ca.
10000 ISK (€63) for the next 20 hectares. This support also applies for other fodder crops
(excluding grass).

Iceland has no fibre crops or sugar production and hence no related specific measures. There is
no commercial production of oil seeds in Iceland but a project experimenting with cultivation of
oil rape is under preparation. In 2010 rape seeds were cultivated on 40-50 ha. There are no
specific measures in this respect.


Most farm animals in Iceland belong to native breeds. Import of live animals is not allowed,
although some new breeds have been introduced by import of semen and embryos, notably of
beef breeds. Iceland indicated that, due to their long isolation, the native breeds are extremely
vulnerable to imported animal diseases and that Iceland intends to raise this issue in the
accession negotiations. The issue will be dealt with in chapter 12, Food safety, veterinary and
phytosanitary issues.


The dairy sector, including beef, is the most important agricultural sector in Iceland with 47% of
the agricultural turnover. Milk production amounted to 129 million litres in 2009 (0.1% of EU
production). Almost all dairy farms are family farms and in most cases the farm is the main
source of income for the family. Iceland’s self-sufficiency rate is more than 100% for dairy
products. The consumption of milk per capita is one of the highest in the world. Production of
milk from sheep or goats for human consumption is minimal.

III.d. Quality policy

Iceland has not taken over the acquis for quality policy.


Það er margt áhugavert í rýniskýrslu Evrópusambandsins um stöðu landbúnaðar á Íslandi. Alla skýrsluna um landbúnaðarmál er hægt að lesa hérna, á vefsíðu Evrópusambandsins. Þetta eru auðvitað staðreyndir sem Bændasamtökum Íslands er mjög illa við, og hefur verið það frá upphafi.