“Increased imports of meat, cheese and processed food products will harm Icelandic food production in general. And the market share of domestic production will be reduced and competition will be harder,” a spokesman from the Farmers’ Association of Iceland (Bændasamtök Íslands) told GlobalMeatNews.
That said, Iceland’s lamb sector will probably gain from the deals announced on 17 September. They include cutting tariffs, boosting export quotas and strengthening geographical indication protection.
Iceland’s current EU annual export quota for sheep meat (lamb and mutton) is 1,850 tonnes (t) and it will increase to 3,050t after the deals come into effect, maybe next year.
Moreover, Iceland’s processed sheep meat, pig meat and poultry exports, which currently do not have duty free access to the EU, will now enjoy annual duty free quotas for 300t, 500t and 300t respectively.
But “these positive effects of the agreements are offset by lost market share on the domestic market,” argued the spokesman. Moreover, the “current quota for Iceland sheep meat exports is not fully exploited every year, so the value of an increased quota should not be overestimated,” he added.
The European Commission, however, sounded positive: “The Icelandic market is small [323,000 people], but it is a market with high prices and limited domestic production,” said a spokesperson: “The trade deal will allow 91.3% [in terms of trade value] of EU basic agricultural products to enter Iceland duty-free, from the current 66.4%.
“The agreement will offer tariff reductions to zero for several tariff lines of EU meat products such as pig and poultry fat, poultry liver, smoke or dried, live poultry,” she added.
In terms of volume, the EU’s existing 100t export beef quota to Iceland will be increased by another 596t; the 200t pig meat quota by 500t; the 200t poultry meat quota by 656t; while the 50t salted, dried and smoked meat quota will be up by 50t; a 50t sausages quota will rise by 200t; and a 50t processed meat products quota will go up by 350t.
Moreover, a new quota of 200t would be opened by Iceland for EU organic and free-range poultry meat, the Commission said.
The farmers’ association warned that Iceland’s processed meat segment will struggle because of a substantially high import quota because “some slaughterhouses are already battling with debt and inefficient operations”.
“The meat industry will have to adapt to new conditions” following the agreement, while the price of beef, poultry and pig meat will probably fall in coming years, he said. “So there is enormous work ahead in promoting Icelandic meat on the EU market,” said the spokesperson.
On geographical indications, Icelandic lamb is expected to secure protection against any direct or indirect commercial use of the protected name in EU markets. “We have a breed of sheep that was brought to Iceland over 1,100 years ago with Viking settlers,” the association spokesman said.
The agreement will need to be ratified by Iceland and in the EU by the Council of Ministers and the European Parliament before it can come into force.