EU talks could put Icelandic farming under pressure

In an opinion article published by mbl.is, Ferdinand Schmitt argues that reopening Iceland’s European Union accession talks could create long-term uncertainty and pressure for the country’s agricultural sector.

Schmitt says he is German, a guest in Iceland and a supporter of the EU. From a German and European perspective, he would welcome Iceland joining the bloc. From an Icelandic perspective, however, he says the issue is more complicated.

The referendum on 29 August is not directly about Iceland’s EU membership, he writes, but about whether accession negotiations should be reopened. The slogan “yes to see” may initially sound reasonable, allowing Iceland to negotiate first and then make an informed decision. But Schmitt says the negotiations would involve compromises, transition periods, special arrangements and a political agreement, as well as approval from the EU and its member states.

He also says the EU is constantly changing, including its agricultural policy, funding, environmental and animal welfare requirements, and market rules. It would therefore be unrealistic to believe Iceland could negotiate now and know exactly what membership would mean in five or 10 years.

The same applies to so-called red lines in the negotiations, according to Schmitt. Iceland could define such red lines, and doing so would be politically important, but they would not provide a permanent guarantee for Icelandic agriculture. Conditions for membership could be negotiated, but not future changes within the EU.

Schmitt says this is particularly important for Icelandic agriculture and livestock production, which are closely linked to settlement patterns, domestic food production, and the use and protection of large parts of the Icelandic countryside.

Iceland’s agricultural support system is fundamentally different from the EU’s common agricultural policy, he writes, meaning that membership would require significant adjustment. Even if the adjustment took several years, there would be a substantial risk of structural changes and increased pressure on smaller and less competitive farms.

Such changes would not necessarily mean only that farms became larger or more efficient. They could also lead to farming ending in some regions, agriculture disappearing from parts of the country and communities losing part of their economic foundation. Iceland’s climate and geographical conditions also limit alternative uses for agricultural land more than in many parts of mainland Europe.

Schmitt questions whether Icelandic dairy and meat production could compete on equal terms with products from mainland Europe if markets were opened further. Iceland faces conditions that efficiency alone cannot change, including a northern climate, a short growing season, smaller farms, long transport distances and a small domestic market.

Domestic production could therefore quickly come under pressure from larger European markets. Schmitt says consideration must be given to EU agricultural support, possible transitional arrangements and domestic support permitted under EU rules. However, he cautions against assuming that financial support alone could remove the structural risks facing Icelandic agriculture.

He also says Iceland’s agricultural framework will continue to develop in response to changing economic, social and environmental conditions. The future development of Icelandic agriculture and the question of EU membership are, however, two separate issues.