At the start of the 16th century, around 2000 people lived in Stege. However, the herring fisheries were in decline and the town was taxed heavily to pay for continuing wars. Farmers began to sell goods to the harbour at Grønsund, and the island was again pledged against a debt. By 1582 Frederick II was obliged to cut taxes on the town and waive unpaid back taxes, as the town was effectively bankrupt. In 1583, trade with Germany was again banned. Christian IV granted land outside Stege to the town so that the inhabitants might grow food for themselves. In 1627, more land was granted.