Higher subsidies for lower prices ‘a good idea’

Iceland’s ruling Social Democrats would support increasing support to the country’s farmers if it means lower prices for consumers, a party MP told parliament.

MP Helgi Hjorvar says that the extra government money would help both farmers and consumers alike if Iceland enters the EU.

As reported earlier this week on IceNews, a new report by two economists on the impact on farmers of Icelandic entry into the European Union claims that agricultural subsidies would need to increase considerably for Icelandic farmers to be able to compete with imported foodstuffs.

Independence Party MP Einar K. Gudfinsson asked in parliament this week: “Are those who on the one hand speak for entry to the EU and are on the other hand discussing that special measures need to be taken to protect domestic agricultural production therefore intimating that the Icelandic government is prepared to provide extra support for Icelandic agriculture? Is it for example the intention of the Social Democrats in the field of agriculture to increase domestic support for agriculture by as much as six to seven billion kronur? That would be huge news.”

Helgi Hjorvar responded on behalf of the Social Democrats, saying that his party would be in favour of increased support to Icelandic farmers so that consumers could enjoy lower prices. “If that is best done by relaxing import duty protection and lowering food prices that way, and then to increase direct support to Icelandic farmers in response, so that farmers’ and consumers’ interests go together, then it would simply be to the benefit of all interested parties and something that we would of course support in principle and in deed.”