For centuries Iceland's main industries were fishing, fish processing and agriculture. In the 19th century, 70–80% of Icelanders lived by farming, but there has been a steady decline over the years and now that figure is less than 5% of the total population. It is expected that the number will continue to fall in the future. Only 1% of the total land area (of 100,000 km2) is under arable cultivation, confined almost exclusively to the peripheral lowland areas of the country,
The raising of livestock, sheep (the traditional mainstay for generations of Icelandic farmers) and cattle (the latter grew rapidly in the 20th century),is the main occupation, but pigs and poultry are also reared; Iceland is self-sufficient in the production of meat, dairy products and eggs. There is also an important export trade in horses. In recent years there has been a move towards increasing specialization in the livestock sector.
Vegetables, flowers and fodder crops
Despite the cool climate and restricted growing season, a variety of food crops are grown, such as potatoes, turnips, carrots, cabbage, kale, and cauliflower. Other vegetables (such as tomatoes, cucumbers and green peppers), cut flowers and potted plants are grown in greenhouses heated with geothermal energy (of which Iceland has an abundance)—in some cases artificial light is required to supplement the shorter daylight hours at these northern latitudes. Even bananas and grapes can be grown in this way—but not usually on a commercial scale. Fodder crops are also important: this includes grass (which in Iceland is exceptionally nutritious as a result of the long periods of daylight in the short, cool summers), rye and barley.
The cool climate and northern latitude has certain advantages for agriculture: The lack of insect pests means that the use of agrochemicals—insecticides and herbicides—is very low, and the long hours of daylight in the cool summer allow grass to grow exceptionally well. The general lack of pollution—due to sparse population—means that food is less contaminated with artificial chemicals—advantages which have been exploited by a small but growing organic sector.