Published August 29, 2011


Icelandic lamb meat, often touted as the best in the world, has in many ways come to represent the country itself. The demand for this meat, on a global scale, has been increasing dramatically in recent years. The exporting of Icelandic lamb meat has been encouraged on a state level, too—Minister of Agriculture and Fishing Jón Bjarnason has been one of the most vocal advocates of the trade, and Iceland’s sheep farmers have benefited directly from it.
However, it is this focus on exporting Icelandic lamb meat—along with a strong protectionist policy against importing agricultural products—that has led to an artificially created shortage of lamb meat on the domestic market, while the product continues to stream out of the country to markets abroad.
How did this happen? To understand why, it is important to understand the minister himself.
Jón Bjarnason hails from the Leftist-Green Party. While it is the official policy of the ruling coalition that Iceland will join the European Union, the Leftist-Greens—who share the coalition with the pro-EU Social Democrats—have traditionally been against joining. Opinion is still somewhat divided within the party, but Jón remains staunchly against the move. His main reason: its supposed effect on Iceland’s farmers, who fear that elimination of a trade barrier will put them out of business. Allowing a free-flow of agricultural imports, the rhetoric goes, will hurt farmers who will not be able to compete with the lower prices imports will sell for. Thus, while exporting products is fine, imports should be tightly restricted.
This theory has been put into practice with regard to Iceland’s lamb. Although there are just under half a million sheep in this country of about 320.000, and lamb has long been one the symbols of the nation, exports of Icelandic lamb have been on the rise to meet growing overseas demand. The demand has been so great, in fact, that over 40% of the country’s lamb, or about 3,600 tonnes, was exported in 2010.
While on the one hand positive news, the unexpected consequence is now that lamb available for the domestic market has reached a serious shortage. Rather than reduce the number of exports and divert some of them to Iceland’s home market, one meat packing company has asked for permission to buy lamb for importing.
Leifur Þórsson, the director of Ferskar Kjötvörur, told RÚV that he has not been able to find lamb available except at Sláturfélag Suðurlands, where he would have to pay up to 20% more for lamb meat than he is used to. As such, he would not be able to turn a profit buying and selling Icelandic lamb. In order for him to import lamb for sale in Iceland, he needs to get special permission from the Ministry of Agriculture.
The minister has responded to this request with a resounding “NO,” stating that his first priority is “ensuring the food quality in Iceland.”
This, in turn, has sparked a volley of criticism from multiple sources. By letting domestic prices reach unsustainable levels, while not allowing the market to bring in cheaper goods, the minister is endangering the domestic market, says Finnur Árnason, the director of Hagar. Hagar owns a number of retail chains in Iceland, including Bónus, Hagkaup and Ferskar kjötvörur (Fresh Meat Products). He adds that the minister has raised import tariffs to such levels that the country is effectively closed to imports.
Meanwhile, Ólafur Stephensen, the editor of Fréttablaðið, responded to the minister’s defence of Iceland’s sheep farmers by wondering what politician is looking out for consumers.
Some are making their point in more creative ways. Leifur Þórsson, the director of Fresh Meat Products, took out a full-page ad in Fréttablaðið offering a free iPad for anyone who could bring him 600 tonnes of lamb meat. He emphasises that the focus should not be on the sheep farmers, but rather on meat exporters, and not least of all, the tariffs system in Iceland.
The Consumers’ Association of Iceland has released a statement saying they believe it is imperative that the minister needs to change his policies on what products may be imported, and how high the tariffs can be, for the sake of the country’s consumers. They point out that the parliamentary ombudsman has already stated that the current policy violates the Icelandic constitution.
Conservatives in parliament have seized upon the opportunity to employ populist rhetoric about Iceland’s consumers, with Independence Party MP Sigurður Kári Kristjánsson calling for legislative changes that would allow meat to be imported.
But the minister stands guard with his protectionist policies, even acting unilaterally and against the judgement of his closest advisors, admitting recently that he unilaterally changed import tolls to be based on price rather than weight, thereby driving up the price of imports.
While Icelandic consumers would undoubtedly prefer to buy products made in their own country, when those products are pointed squarely away from Iceland, while the same products from abroad are blocked entry, the protectionist stance the minister has taken translates to Icelanders having little choice but to pay more in the grocery store for goods their own country produces, while being assured this is being done for their own good.

Support The Reykjavík Grapevine!
Buy subscriptions, t-shirts and more from our shop right here!


Power In Numbers

Power In Numbers


Show Me More!