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Reindeer Husbandry in Norway - Economic Issues PDF  | Print |
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Economy

The economic situation among reindeer herders in Norway varies greatly, and today's reindeer herders have to adapt to a wide variety of changes in the local, regional and national economy. Reindeer and their pastures should be managed in both a rational and sustainable manner, while at the same time reindeer herders need revenue to survive. Reindeer herding is in terms of taxation seen as a for-profit-business and for a reindeer herder a common tax form is as a private entrepreneur (enkeltmannsforetak). The basic rule for this is that all income should be taxed, with the exception of the income that is tax free, and that the costs of acquiring revenue is tax-deductible. A Siida unit may have one or more entrepreneurs.

Today, the income of individual reindeer herders consists of the production of meat and raw materials such as skins, bones and horns. Additional sources of income include financial subsidies and compensation. There are some variations between the six regions but also between individual reindeer herders in how much meat production represents of their total revenue. Meat production in general brings more than 50 % of the income to reindeer herders in all four regions except Troms and Nordland. On the individual level the number of reindeer and the production of meat are related. It is not unusual that when the total number of reindeers decreases, the total value of meat production also shows a falling trend. The industry income picture will however change when we add for example subsidies and compensations, then the income from the industry is in average more than the income from other sources of income. But statistics show that all Siida units in Norway have an income far below the average income in Norway. Most reindeer herding families have several incomes which can come from additional processing, sale of services, additional industries and salaried work.

More than 50 % of the costs in the industry in all the six areas of reindeer husbandry are related to the costs of running and maintaining mechanical equipment. Other high costs are related to other equipment and constructions.

(Dieđut, Analyse av den samiske reindriftens økonomiske tilpasning, nr 4, 2006, Sámi Instituhtta, Norden)


State economic Support for Reindeer Husbandry – the Reindeer Husbandry Agreement

Norway has since 1976 an agreement for reindeer husbandry which is called the “Reindeer Husbandry Agreement” (Reindriftsavtalen) and the main purpose of this is to preserve and develop reindeer husbandry based on its traditions. The agreement is a result of the Norwegian authorities' views on reindeer herding and especially in relation to the support of the Sámi culture and reindeer husbandry as a Sámi industry. The agreement reflects the political objectives and guidelines for reindeer husbandry.

NBR, the organization of Norwegian Sámi reindeer herders, and the state through the Department of Agriculture and Food annually negotiate on economic measures but also professional, social and organizational issues. The first agreement was drawn up in the 1970’s. The agreement builds on various elements, such as the importance of reindeer husbandry, the main objectives of the Agreement and its primary goals.

The economic support for the years 2008/2009 amounted to 97 million NOK (10.1 M Euro). The financial support agreement includes activity supports, production bonuses, early slaughter supplements, calf slaughter payments, district support, special transition assistances and other payments

According to the agreement for 2008/2009, for example, each Siida unit gets an activity support corresponding to 10 000 NOK (1 100 €), and if the Siida unit should be able to get activity support with production bonus equal to 25 percent of taxable income, the unit must have sold reindeer meat for at least 50 000 NOK (5 500 €) per year. Support for early slaughter is 7 NOK (0,77 €)per kilo for reindeer that has been slaughtered in the summer pastures and 4 NOK (0,44 €) per kilo for reindeer slaughtered between the time 11 October and 31 December. Support for early slaughter has led some districts in the past to slaughter before the New Year. The support for calf slaughter in 2008/2009 amounts to 200 NOK (22 €)/ calf. The stated purpose of this support is to promote a certain type of herd structure so that it consists of more productive animals in relation to limited pasture availabilty. The purpose of district support is to give districts more responsibility with the help of increased economic activity freedom and it will also be used for emergency preparation in the case of poor reindeer grazing conditions.

Also within the agreement is 35.9 M NOK (3,949 M €) for the Reindeer Husbandry Development Fund (in Norwegian called RUF) and money from RUF can be used as loans and / or grant support for example to extreme losses of reindeer in the case of accidents, training scholarships and development of related industries to reindeer herding.

(Foreskrifter til Reindriftsavtalen 2008/2009 m.m., Reindriftsforvaltningen, Alta 2008)




 
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