Parliament Passes Controversial Agricultural Bill Amid Opposition

Alþingi parliament of Iceland

A revised amendment to the agricultural products law (búvörulög) passed yesterday despite opposition from various stakeholders, paving the way for a potential monopoly in the agricultural processing sector. Critics argue the bill goes too far, with concerns that it could lead to higher prices for consumers.

Paving the way to a monopoly

A revised amendment to the law on agricultural products was passed yesterday, after the third debate in Parliament, despite requests for a postponement of the vote from the opposition and warnings from the Confederation of Icelandic Enterprise (ASÍ), the Consumers’ Association, and other stakeholders, Mbl.is reports.

The revised amendment, proposed by the majority of the Industrial Affairs Committee (atvinnuveganefnd), has been criticised for going further than the original bill, Mbl.is notes. Twenty-six MPs voted in favour of the legislation and nineteen against.

Members of the opposition, including Jóhann Páll Jóhannsson of the Social Democratic Alliance, Gísli Rafn Ólafsson of the Pirate Party, and Hanna Katrín Friðriksson of the Reform Party, requested a postponement. To no avail. The amendments include, among other things, an exemption for agricultural processing plants from competition laws, facilitating their consolidation.

“This means we will end up with Agricultural Products Inc. – a single company handling everything, and thus achieving an effective monopoly in Iceland, able to raise prices for us consumers without our ability to do anything about it. The same applies regarding what is paid to farmers, since there will only be one processing plant left,” Gísli Rafn stated in a speech before Parliament, as quoted by Mbl.is.

Competition from abroad

The Confederation of Icelandic Enterprise (ASÍ), the Commercial Workers’ Union (VR), the Consumers’ Association, the Federation of Trade and Services (SVÞ), and the Icelandic Federation of Trade have warned against the passage of the bill, stating it goes against public interest. The Chair of the Industrial Affairs Committee, Þórarinn Ingi Pétursson of the Progressive Party, argues, however, that consumers are prioritised in these changes. “There will be no farmers if there aren’t consumers to consume their products.”

Þórarinn stated that if farmers and processing plants cannot offer consumers high-quality goods at competitive prices, there will be no domestic food production anyway: “So, consumers are always a priority when discussing domestic food production, and let’s not forget that we have competition in the food market. It comes from abroad,” Þórarinn observed.

“Unnecessary” changes

Kristrún Frostadóttir, the chairperson of the Social Democratic Alliance, stated that while farmers could not live with the status quo, it appeared that “something has gone seriously wrong in the processing” of the legislation. Instead of revising the bill back within the ministry to grant exemptions to those agricultural sectors most in need, a decision was made to proceed with a flawed bill.

“The result is a blanket exemption that could lead to a single large processing plant for all meat processing in the country, regardless of the type of livestock. This was unnecessary,” Kristún stated, noting that the methodology employed disadvantaged those who needed the changes the most.

Value of Exported Goods Increases Significantly

Eimskip Dettifoss

The value of exported industrial, marine and agricultural products has increased significantly over the past three years, RÚV reports (referencing compiled statistics published in Fréttablaðið).

During the first four months of 2022, goods have been exported for almost ISK 319 billion ($2.3 billion / €2.3 billion), compared to ISK 197 billion (($1.5 billion / €1.4 billion) during the same period in 2020.

The value of exported marine products amounted to ISK 118 billion ($874 million / €842 million) during the first four months of this year, compared to ISK 81 billion ($600 million / €578 million) in 2020.

The value of exported agricultural goods, including farmed fish, totalled ISK 20 billion ($148 million / €143 million) during the first four months of 2022, compared to ISK 11 billion ($81 million / €79 million) in 2020.

Finally, the value of exported industrial products is up by 75% – from ISK 99 billion ($733 million / €707 million) to ISK 175 billion ($1.3 billion / €1.2 billion) – during the first four months of this year as compared to 2020. A significant factor in that regard is that exported aluminium’s value has doubled compared to two years ago.