Icelandic fisheries: Sustainable and efficient

Sigurður Ingi Jóhannsson, Minister of Fisheries and Agriculture in Iceland considers the role the fishing industry plays on the Icelandic economy…

For most developed countries wild capture fisheries are not economically very significant, but Iceland is one of the exceptions. Fisheries have for a long time been the backbone of the Icelandic economy. In 2012 some 1.5 million tonnes of fish were caught around the island with an export value of €1.7bn. Fisheries and fish processing represent some 11% of GDP and 27% of the total export earnings.

New research indicates that, if the various sectors supporting the fisheries sector are taken into account, their contribution to GDP might be as high as 26.7%. Today, fisheries in Iceland are sustainable, efficient and highly profitable.

How did this come about?

In Iceland, like most other coastal states, there was no perceived need for fisheries management in the early days, when landings just kept on increasing year after year. International acceptance through UNCLOS (UN Convention on the Law of the Sea) of the 200 mile Exclusive Economic Zone finally gave Iceland full control of its fishing grounds. After the “cod wars“, when foreign fleets were excluded from Icelandic waters, fishing was free and practically unrestrained for all Icelanders. Around 1977 signs of overfishing had become undeniable. Something had to be done. To deal with the problem, Iceland, like most other nations, opted for “input controls“ such as “days at sea“ programmes plus various other technical options to curb the fishing power of the fleet. However, this proved to be ineffective. The fleet was quick to increase its fishing efficiency within this framework, so overfishing persisted. Fishing was really driven by fierce competition for the fish, regardless of quality and market conditions. To catch the most the fastest was the name of the game. As an example, 70% of the cod (representing over 50% of the value of total fish exports) was caught in a period of 3 months in the summer, often leading to very poor yields and poor quality.

In 1984, permanent quota shares of the annual total allowable catch (TAC), decided by the Minister of Fisheries, were allocated to individual fishing vessels. This meant that each fishing vessel could now catch its share of the different fish stocks in its own time. The benefits soon came to light, such as saving fuel by not racing to the fishing grounds, staying in harbour in bad weather, using the most efficient vessels etc. Quotas became transferable between vessels in 1990, leading to a market system for fishing quotas that were nevertheless subject to certain restrictions. On the whole, this led to an important transformation of the industry: From a quantity mentality to that of quality and value. The quota system also led to vastly improved efficiency: Only 9,000 people are now directly employed in fishing and fish processing. This corresponds to 5.3% of the Icelandic workforce, but new jobs have been created in specialised industries serving the fisheries sector, driving the change to more efficiency every year.

Improvement in productivity has been achieved by constant streamlining and the use of automation and robotics, as well as incentive schemes of various types. As a result, the real value of cod products over the last 30 years has doubled due to higher yields, better quality, value-added products and more focussed marketing. By-products, which were formerly considered as waste, such as fish heads, livers, fish frames, skin etc. are now processed.

From a political point of view many view the system as being “unfair“. Cases have been brought to the courts of law, even international courts, to test various aspects of access limitations to this common resource of Icelanders. There is an on-going debate on how high the resource rent or fishing fee should be. Admittedly, the system has not proved to be perfect. Many of the remote villages around the island have faced severe difficulties, e.g. when fishing quotas have been transferred to vessels operating in other parts of the country. It is a system under constant development and various measures have been taken by the government over the years to counteract the negative aspects. Yet, it is clear that the nation as a whole is the biggest beneficiary of an efficient fisheries management system. That is the fact that should be kept in focus – the rest is all about fine tuning a well-functioning system.

The figures about efficiency speak for themselves. The industry is efficiently managed, rather than (top down) regulated, and it is not subsidised. Over the years, vessel ownership has become more concentrated through the transfer of quotas and a vertical integration of companies has taken place.

Most importantly, management decisions are moving towards long-term harvesting rules and discards are forbidden. All decisions of this kind are now based on the best available science, a policy that is supported by most of the industry. The outcome has been that fish stocks are now generally at good levels. That is the key issue when it comes to responsible and sustainable harvesting of living marine resources.

Sigurður Ingi Jóhannsson

Minister of Fisheries and Agriculture

Ministry of Industries and Innovation


  1. This is very encouraging to read, though I have found other articles which question sustainability. What is the crucial factor in the success of this system, is it the individualised quotas, the flexibility or something else?How would you say the system has differed from the EU policy is it stricter, or differently structured? Could the EU have done better by adopting stricter controls?


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