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Country report - Iceland 2010

This article was compiled in 2010 by Claudia Frieden and Beate Huber, both FiBL, for the FiBL-Sippo handbook "The organic market in Europe".

For an updated report click here.

History

Iceland is a mountainous, volcanic country of 103,300 km2 just south of the Arctic Circle. Although the growing season is short and the climate is cool, there is considerable potential for the development of organic agriculture. Pioneers paved the way for organic farming in the 1930s. Development, however, has been slow in comparison to the rest of Europe.

The use of agrochemicals, which increased during the latter half of the 20th century, is still low and there is little pollution in this sparsely populated and isolated country which, because of the country’s cool climate, is free of several well-known animal and plant diseases and the standard of animal welfare is generally high. The main technical obstacles, however, are a shortage of organic fertilisers and difficulties in growing legumes such as white clover. There is a network of consultants in organic farming operating from the Farmers Association of Iceland to help with such issues facing todays organic farmers (Icelandic Agricultural Statistics 2009).

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Production base

Agricultural production is of great importance to the national economy of Iceland. The country’s 4,000 farmers produce sufficient food of animal origin for the population of around 300,000 as well as substantial amounts of vegetables, partly in geothermally heated glasshouses. It is estimated that in 2008 nearly 7,000 hectares were under organic cultivation, accounting for 0.46 percent of the total agricultural area (Willer/Kilcher 2011). In 2009 there were 36 certified (by TUN Certification Body) organic producers and 14 processing plants, up 17 percent and 22 percent respectively (Icelandic Agricultural Statistics 2009). Organic processing mainly focuses on dairy and herbal products.

Over the last 15 years there has been a steady, yet slow growth in the production of certified organics in Iceland. The organic product range is growing and now includes barley, herbs, carrots, potatoes, turnips, cabbage, cauliflower, rhubarb, tomatoes, cucumbers, peppers, milk, lamb, beef, eggs and seaweed products. The vegetable sector has shown the strongest growth with both field and greenhouse products such as potatoes, carrots, cabbages, herbs and tomatoes. In the animal sector there has been a substantial increase in milk production and processing in recent years, but less in meat, primarily sheep meat. Very limited organic egg production is taking place as well as some barley production. It is clear that domestic production is much less than needed to satisfy market demand. Looking at the last decade the number of organically certified farms and other units (processors, wild harvest and seaweed operations) has grown from 39 in 2001 to 64 in 2009. Though production is still relatively limited, it is enjoying a growing popularity and will undoubtedly grow larger (Ministry of Fisheries and Agriculture). Premium prices for organics normally range from 10-30 percent.

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Government support

Sustainable agriculture is on the agenda of the Government of Iceland and determined efforts shall therefore be made to strengthen certified organic production and other sustainable forms of agricultural production (The Farmers Association of Iceland). Although organic production is still at a somewhat small scale, it is increasing and is warmly received by consumers; hence it is fair to say that more attention will be given in the future (Ministry of Fisheries and Agriculture).

Unlike in most neighbouring countries, a substantial conversion grant scheme does not yet exist in Iceland, although there has been a provision for minor conversion support, which has been of some help to a few farmers. It has been limited to recultivation of fields, mainly hayfields and greenhouses and only available for two years per field or plot. In addition, there is a little support being given for certification costs, but only during the first year of conversion. This scheme ends at the end of 2010 according to Agricultural Law No. 70/1998.

Some local authorities are also working on efforts to involve organic farmers where appropriate, for example composting organic waste for organic cultivation.

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The market

Although organised marketing is still in the early stages of development, certain positive signs are on the horizon regarding both domestically produced and imported certified organic food. Small quantities, large distances and few producers and processors are some of the challenges faced.

Consumers can now access organics from some supermarkets in addition to specialised shops and box delivery and direct farm sales are increasing. However, promotion work is needed and consumers clearly need more information on the quality and general value of organic commodities. It is estimated that organ- ics (domestic and imported) account for 1 to 2 percent of food purchased in Iceland.

Known organic exports include lamb to Denmark and the UK as well as organic seaweed products sold to the USA.

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Imports and market requirements

The volume and value of organic imports are not known, but the majority of organic imports is estimated to include processed fruits, vegetables and cereals and are estimated to account for less than one percent of food imports. The main organic imports are fruit and grain based commodities together with spices, etc., from developing countries. Organic vegetables come in, espe- cially in mid-winter when the domestic products have been sold out and such commodities are lacking on the food market.

Iceland is free from many livestock and plant diseases making the imports of live animals, raw meat and plants therefore either forbidden or strictly limited. For certain products, mainly in the livestock sector, there are custom tariff based import protections for the domestic market (e.g., cheese, yoghurt and processed fro- zen meat). This is implemented by the Ministry of Agriculture
and Fisheries in accordance with the part of the EU legislation ratified by Iceland (and other members of the European Economic Area).

The volume and value of organic imports are not known, but the majority of organic imports is estimated to include processed fruits, vegetables and cereals and are estimated to account for less than one percent of food imports. The main organic imports are fruit and grain based commodities together with spices, etc., from developing countries. Organic vegetables come in, espe- cially in mid-winter when the domestic products have been sold out and such commodities are lacking on the food market.Iceland is free from many livestock and plant diseases making the imports of live animals, raw meat and plants therefore either forbidden or strictly limited. For certain products, mainly in the livestock sector, there are custom tariff based import protections for the domestic market (e.g., cheese, yoghurt and processed fro- zen meat). This is implemented by the Ministry of Agriculture and Fisheries in accordance with the part of the EU legislation ratified by Iceland (and other members of the European Economic Area).

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Market access provisions

The Icelandic law and regulations on organic agricultural production were written in accordance with the EU regulation 2092/91 and subsequent amendments. The Ministry of Agriculture’s Advi- sory Committee on Organic Agriculture monitors amendments to EU Regulation on Organic Production and other EU regulations relevant to organic agriculture. Iceland has fully implemented the EU legislation on organic farming including certification and labelling. Certification bodies need an official permit of operation from the Ministry of Agriculture as well as an accreditation from the Icelandic Metrology and Accreditation Agency.

As stated above, there are restrictions on imports of certain agricultural products through tariffs. This is strongly related to self sufficiency and sustainability considerations and the strong will of the population to maintain a high level of food security on a re- mote island. The strong will to not sacrifice food security, includ- ing that of organic produce, for further trade liberalization is likely to become a major issue in negotiations between the Icelandic Government and the EU in months ahead, probably coming next to fishing and sovereignty.

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Web information corner, references and sources

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SIPPO & FiBL 2011: The Organic Market in Europe