Iceland’s Looming Sheep Crisis

One of Iceland’s best known exports is lamb meat. Last January, the country saw record domestic sales of lamb meat, attributed in part to the tourism boom, and just under 6,800 tonnes were sold in 2016 alone. Statistical analysis of Iceland’s sheep has shown that the animals are getting heavier and healthier than ever.

It might come as a surprise, then, that it is already being estimated that some 1,300 tonnes of lamb meat headed for market this fall could be left unsold. Both the strengthening of the króna and the trade embargo against Russia are putting a significant dent in Icelandic exports. Prices for exported goods—and therefore returns—are expected to be about 35% less than they were last year. How did this happen?

How farmers get paid

More than 40% of the income Icelandic farmers receive comes in the form of government subsidies. At the same time, the number of sheep farms in Iceland has declined from 3,286 in 1993, to 2,785 in 2008.

Meanwhile, Icelandic tastes are changing. While lamb used to be the primary type of meat consumed in Iceland, in recent years beef, pork and chicken have either equalled or surpassed lamb in terms of per capita consumption. It should be noted that cows, pigs and chickens, unlike sheep, can be and are farmed in small enclosures. Sheep farming requires vast expanses of grassy areas for the sheep to graze—something in limited supply in Iceland.

We really shouldn’t be surprised

It might be easy to blame the impending lamb crisis on the strengthening króna and the embargo against Russia alone, but these aren’t the sole causes by a long shot. Concerns about overproduction and calls for reducing sheep farming have been ongoing since at least 1995, even as the number of sheep farms has been steadily declining. How has this been allowed to happen?

One explanation would be the Progressive Party. This political party, which has been around for over a century, has traditionally advocated on behalf of Icelandic farmers, and their strongest base of support is in rural areas (with the exception of fishing centres, which tend to support the Independence Party). The Progressive Party has, until last year’s elections, also been a part of the Icelandic government since 1988, apart from a brief respite from 2006 to 2013.

“The only question remaining is whether anyone should be guaranteed to make a living in their chosen profession, whatever the cost to the nation as a whole.”

Last December, the Icelandic government allocated 100 million ISK to promoting the sale of lamb meat abroad, at a time when the health care system is in dire need of reform and the housing market is becoming increasingly inaccessible to local residents. Then Minister of Agriculture, Gunnar Bragi Sveinsson, who defended the allocation to reporters, happens to hail from the Progressive Party.

Maybe we should let the market decide

As it stands now, Icelandic sheep farmers are contending that they are barely breaking even. Even if the Russian market opened again and the króna relaxed, there is still no guarantee that the situation would significantly change. The industry has seen the writing on the wall; sheep farming might no longer be as viable as it once was. Ágúst Andrésson, the chairperson of the National Association of Slaughter Permit Holders, told reporters recently that Iceland needs to both decrease lamb meat production and expand the overseas market. On the point of reducing production, chairperson of the Farmers’ Association of Iceland, Sindri Sigurgeirsson, disagrees, but he has not been able to offer any ideas on how to find a market for the quantities Iceland currently produce.

This leaves Iceland at a crossroads. Sheep farming is a romantic, idyllic, and very Icelandic tradition. No one would dispute that. The only question remaining is whether anyone should be guaranteed to make a living in their chosen profession, whatever the cost to the nation as a whole. This autumn, when the new stock of lamb meat hits the shelves, the market may end up answering that question for us.