The European Union (EU) has introduced mandatory rules for companies dealing in commodities such as coffee, palm oil, and cocoa in 2023 to ensure that products imported to Europe do not originate from deforested land, land acquired forcibly from local or indigenous communities, or whose cultivation involves labor and human rights abuses. To avoid heavy fines, companies must prove compliance by the end of 2024.
African smallholder coffee farmers, who primarily sell their harvest to European markets, are now facing a sense of ambiguity in the market due to unclear consequences of the new EU regulations. Critics argue that the new laws may penalize smallholder coffee farmers worldwide, particularly in Africa, possibly resulting in a coffee shortage in Europe.
Coffee production significantly contributes to deforestation, with approximately 130,000 hectares of forest lost annually due to land clearing for cultivation. Many coffee regions are situated in areas grappling with issues such as slavery-like labor abuse, corruption, smuggling, and land grabbing. Anti-deforestation regulations aim to make products ‘traceable’ back to their production origins to ensure commodities traded in Europe are not tainted by these issues.
The EUDR requires companies to collect the geographic coordinates of land where commodities are produced using mobile apps and computer-based tools. However, the law overlooks the production side, making it difficult to determine the impact or opportunities for farmers. There is a strong need to conduct country-level assessments on the readiness to fulfill the new EU legislation, especially on how smallholder coffee farming families would be affected.
The EU’s anti-deforestation law has raised concerns about the compliance of smallholder farmers, who produce 80% of the coffee consumed worldwide. In Ethiopia, around 2.2 million farming families produce most of the country’s coffee, earning a significant portion of their income from exports. However, a lack of infrastructure and support hinders their ability to prove compliance and adapt to the new regulations.
The Sidama Union has been implementing environmental standards for years, with their products bearing several international sustainability certificates. However, millions of other coffee farmers across Africa do not. Sustainability expert Jennifer Mbuvi highlights a major loophole in the EUDR, as regions and producers who have already been following sustainability rules will find it easier to prove their compliance with the new regulations. If that happens, the EUDR might have “zero or negative impact on deforestation,” Mbuvi said.
Coffee production itself is not the primary driver of deforestation; instead, the growing population might be forced to turn more forests into farms to grow food. Coffee expansion is not the root cause of deforestation; rather, it is driven by population growth and the associated need for food and income.
The current coffee prices are not good for farmers, as many are already having a tough time making enough money. Some coffee farmers are looking for buyers outside Europe because of the extra costs EUDR rules compliance means for them. For Europe, it might mean coffee becomes harder to procure due to the lack of clarity surrounding the implementation of deforestation regulations.
In coffee regions outside of Africa, farmers not only grapple with the hurdles of EUDR but also contend with El Nino, a weather pattern capable of causing extreme conditions. Forecasts suggest that the phenomenon will persist until summer, posing threats of drought and high temperatures for coffee plants in parts of South America and Asia and potentially resulting in lower yields. This could contribute to the rising cost of Europe’s favorite drink.
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