FARM IMPROVEMENT II

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The report reappraises the 1953 and 1954 programs for the development or agriculture in Iceland. The 10-years program aims at an expansion of cultivated grassland, which allows mechanized haymaking and provides more winter fodder for a growing population of cattle and sheep. Whereas too rapid an expansion of dairy cattle would cause serious marketing difficulties, it now is possible to increase the sheep population rapidly. The investment program has been adjusted accordingly. The estimated 1953 investment program, as submitted by the Economic Board in September 1952, has thus been reduced from Kr. l20 million to Kr. 99 million. It is significant that the latter figure includes Kr. 22 million in extra effort of farmers, Kr. 16 million in increasing value of livestock, and Kr. 7 million in import duties and sales tax. The direct foreign exchange cost is about the equivalent of Kr. 31.5 million ($ 1,900,000). The real investment is calculated at Kr. 70 million rather than Kr. 99 million, and only Kr. 64 million has to be financed directly.