Icelandic Sheep and Cattle Farmers Receive ISK 970 Million in Pandemic Support Skip to content

Icelandic Sheep and Cattle Farmers Receive ISK 970 Million in Pandemic Support

By Yelena

sheep farm Sauðfjárbúið að Hesti í Borgarfirði Hestur Kindur Kind Sauðfé Sauðfjárbúið að Hesti í Borgarfirði Hestur Kindur Kind Sauðfé
Photo: Golli. A sheep farm in Borgarfjörður.

Kristján Þór Júlíusson, Minister of Fisheries and Agriculture, has completed the allocation of ISK 970 million ($7.5 million/€6.3 million) in funding to sheep and cattle farmers to meet the impact of the COVID-19 pandemic. The measure is part of a 12-point action plan in response to the effect of the pandemic on Icelandic agriculture. Social and travel restrictions have hit Iceland’s sheep and cattle farmers hard, leading to drops in both demand and prices for their products.

Tourism Halt Led to Drop in Demand

“It is undisputed that Icelandic farmers have been affected by the COVID-19 pandemic in various ways, including in light of the fact that two million tourists didn’t come to Iceland this year. Thus the demand for food products has decreased while at the same time imports have increased according to tariff quotas. It’s domestic food production that takes that hit,” Kristján Þór wrote last December shortly after he proposed the initiative. He pointed out that prices for meat and wool had fallen and waitlists at slaughterhouses had gotten longer. Meat production is particularly vulnerable to rapid market changes as it can take a year to ramp down production. Thus, lamb and beef reserves in Iceland have grown considerably as demand has fallen locally and internationally.

Most Funding to Sheep Farmers

The funds have now been approved and allocated: 75% will go to sheep farmers while the remaining 25% will go to cattle farmers. The funding to sheep farmers will be allocated via an additional mutton quality control surcharge as well as for wool production and through a special action plan on sheep breeding. Cattle farmers will be given an additional payment for each calf that was slaughtered in 2020, some 11,000 animals.

The funding is part of a broader action plan to support the local agricultural industry in responding to the challenges of the pandemic. Other measures include freezing tariff hikes, changes to tariff quotas, efforts to increase farmers’ opportunities for home production on the farm, and the creation of a new agricultural policy for Iceland.

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