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The Fishing Industry in Iceland

by Halldór Árnason


Iceland is a country whose farming and fishing industries have led its economic growth for centuries. Halldór Árnason gives us insight into the fishing industry’s evolution to what it is today.



From the settlement of Iceland in the late 9th century until the 20th century, Iceland‘s economy rested on farming and fisheries. Since the 14th Century, fish products have been Iceland‘s most important export.


Fishing vessels in the fjord.
Fishing vessels in the fjord.

In the last decades of the 19th century, fishing in Iceland utilized open rowing boats that only could sail a few miles from the shoreline. The fishing season was from late January until early May, thus Iceland’s southern and western parts became the predominant fishing regions.


At the end of the 19th Century, people started to move from the country to the seaside, establishing small villages concurrent when the fisheries became the main industry, and fishermen became a specialized profession.


The introduction of motorized vessels at the beginning of the 20th century revolutionized Icelandic fisheries. As the fishing capacity grew, so did the total catch. Iceland acquired a modern fishing fleet in only two decades, technically second to none in Northern Europe.


The overall catch for demersal species, which are those species that live on or near the bottom of lakes or sea, has experienced significant progression and increased value in the catch over the last century. In 1905 there was a catch of 62,500 tons; 80,400 tons in 1920; and 216,700 tons in 1930. In 2021 the overall catch amounted to 1,158,000 tons, and of that, 473,000 tons was the demersal species.


The export value of marine products in 2021 was a total of ISK 296 billion (ISK refers to the Icelandic Kronur), or 38.8% of the total export. The seafood industry contributes 11% to the GDP directly and 25% if an account is taken of the indirect effects of the ocean catch.


It is interesting to note that approximately 5% of Iceland’s workforce is employed directly in the fishing industry.


The importance of herring and capelin


A breakthrough in herring fisheries came in the early 20th century with the more effective purse-seine and drift nets. A seine is a large fishing net that hangs vertically in the water, having floats at the upper edge and sinkers at the lower. A purse-seine is a much larger seine used by two boats, whereby the net is drawn around a school of fish and then closed at the bottom by means of a line passing through rings that are attached along the lower edge of the net.


As a result, distant “herring towns” and villages rose to prominence. Siglufjörður in North Iceland presents a prime example of how herring fisheries affected urban development in Iceland.


Herring fisheries experienced less activity following the Second World War but hit new heights in the early 1960s. Successful developments in the herring industry, with heavy investments in fishing and processing capacity, as well as improved infrastructure, triggered a dramatic collapse of the herring stock in 1968. This imposed serious economic consequences for Iceland. These events provided vital lessons learned when Iceland devised their new fishery management system.


Herring fishery after the catch. c2017. Credit: fao.org
Herring fishery after the catch. c2017. Credit: fao.org

After the herring crash, the herring fleet in the 1970s turned to developing capelin, or caplin, a small forage fish of the smelt family. With a highly focused research and development programme, and targeted marketing, even more capelin catch was processed for human consumption. The fish was whole frozen with roe-filled females, as well as separated roes. These were produced for the Japanese market for making various delicacies, including capelin roe caviar.


Extension of the EEZ


Iceland’s fishing boundaries changed over the years. In 1952 Iceland unilaterally claimed a four-nautical mile Exclusive Economic Zone (EEZ) and then further extended it to 12 nautical miles in 1958. The Icelandic government announced in early 1972 its decision to further extend the EEZ to 50 nautical miles. On 15 October 1975 the Icelandic government announced its decision to extend the EEZ to 200 nautical miles.


It could be termed that ‘all hell broke loose’ when this announcement occurred. It was primarily Britain that sternly refused to acknowledge the 200 nautical mile limit and called upon her navy to protect British fishing vessels while trawling in Icelandic waters. The dispute reached international levels before a resolution was achieved in Oslo, Norway in May 1976. The 200 nautical mile limit became internationally adopted during the 1982 UN Convention on the Law of the Sea (UNCLOS).


Fishing grounds off Iceland. Credit: https://www.researchgate.net
Fishing grounds off Iceland. Credit: https://www.researchgate.net

The fisheries management system


An expanding and more productive fishing fleet soon led to the overfishing of various fish stocks. It was therefore decided to establish a quota system which came into effect in 1984, and a uniform system of individual transferrable quotas was adopted in 1990.

The quota system is based on the catch share allocated each individual vessel. This allocation represents the total allowable catch (TAC) of the relevant species. According to Icelandic law, Minister of Food, Fisheries, and Agriculture sets the annual TAC, a decision based on scientific advice from the Icelandic Marine Research Institute.


The establishment of quotas per vessel initiated changes in the fishing industry with the intention to minimize costs and maximize revenues from the fisheries resource. An opportunity emerged for fuel savings by using new technologies, more economical fishing gear, and changing the operational requirements of the vessels. Simultaneously, demands were made for increased product yields, increased productivity of staff, and enhanced quality, that eventually led to a higher value of product. Today Icelandic fisheries are among the most efficient in the world in terms of catch and value per labourer.


The quota system, disputed in Iceland since its inception, has led to more concentrated vessel ownership and fishing quotas. Around 75% of the quotas now belong to 25 of Iceland's largest vessel operators and fishing companies. No single company or vessel operator may control more than the equivalent of 12% of the value of the total quotas allocated for all species and 12% to 35% for individual species.


Beitir NK 123. The ship is 4138 tons in size. 86.3 m long and 17.6 m wide. The ship's carrying capacity is 3200 tons.
Beitir NK 123. The ship is 4138 tons in size. 86.3 m long and 17.6 m wide. The ship's carrying capacity is 3200 tons.

The modern Icelandic fishing industry


The fishing industry remains one of the main pillars of the Icelandic economy. Marine products continue as a leading export item.


Through sustainable harvest and protection of the marine ecosystem, Iceland has created one of the world's most modern and competitive seafood industries. The extensive research of stocks and managing catch sizes with the setting of quotas has ensured a responsible fishing industry exists and respects the sustainability of the ocean’s natural resources.


Early years cleaning and sorting the catch.
Early years cleaning and sorting the catch.

According to Food and Agriculture Organization of the United Nations, Iceland in 2017 was the 18th largest fishing nation in the world, fishing approximately 1.3% of the global catch that year and the second largest in Europe.





The main focus is on the processing of cod and haddock. Fresh, specially cut pieces and fish cakes of various shapes and sizes are produced, depending on the needs of the buyers at any given time. Great emphasis is placed on quality and cleanliness, and the building is approved by the main retail chains in Europe. The production system is computerized and records ensure the traceability of the product from the catch to the customer.
The main focus is on the processing of cod and haddock. Fresh, specially cut pieces and fish cakes of various shapes and sizes are produced, depending on the needs of the buyers at any given time. Great emphasis is placed on quality and cleanliness, and the building is approved by the main retail chains in Europe. The production system is computerized and records ensure the traceability of the product from the catch to the customer.

The modernization of Iceland’s fishing industry continues to facilitate the nation's economic prosperity. Innovations have also established a foundation where the jobs are valued in fishing and other related industries and have maintained positive results in the field of environmental issues.


The industry strives to create value from all raw materials. Through recycling and reuse, value is realized from waste generated during operations. All waste accumulated at sea, for example, fishing gear, plastic, waste oil, glass, packaging, iron, and glass, is carried back to port and disposed of in the most appropriate manner and to the greatest extent possible.

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