This thesis is situated in the academic sphere of human geography. The overall aim is to identify the current challenges and possibilities Icelandic farmers face in terms of changes in importation laws. This research is exemplary in its field as it uses the narratives of the stakeholders, farmers in this case, as the main data source. The research questions were as following: Is there an agricultural cluster in the region and if so, how does it work; what challenges and possibilities do farmers in the municipality of Hrunamannahreppur face in terms of the recent import law and lastly; according to the farmers, how do policies and laws in Icelandic agriculture ensure long-term farming practices in Iceland. The thesis uses theories of agricultural localization theory, cluster theory and the concepts of competitive and comparative advantages along with the concept of food self-sufficiency. The methods used are semi-structured qualitative interviews during a field study in southern Iceland. Data sources include seven qualitative interviews with farmers in the selected area, a review of agricultural policies and frameworks, and other sources such as articles and media. The main findings are that there is an unexplained disconnect within agriculture and its actors, indicating that policies give preferentiality to economic gain rather than preserving long-term farming in Iceland.