The European Union Deforestation Regulation And What It Could Mean For Smallholders In East Africa

This year, the EU is set to pass a new legislation called the European Union Deforestation Regulation, that will mandate those importing agricultural commodities such as wood, cocoa, soy, palm oil, coffee, and rubber into the union be capable of proving that their import did not “originate from recently deforested land or have contributed to forest degradation”. While this is a huge step towards transparency in the EU’s import practices, it is important to note that the change will not be experienced in the same way by everyone.

To smallholders in East Africa and other developing nations, this new policy may present a significant challenge. This is foreseeable because the logistical expectations of the EUDR will call for significant technical ability and revised infrastructure, which these communities may very well struggle to attain. At the core of the EUDR is the condition that importers provide proof of origin for the commodities they bring into the union. Adopting this into the supply chain will necessitate more rigorous documentation procedures as well as extensive certification processes.

While these procedures undoubtedly serve to benefit those working in agriculture in the long term, they may prove to be quite a turbulent shift. Documentation and certification require significant organisation and capital investment, which are things that smallholders typically lack access to. Failure to meet these transparency regulations could result in a severe reduction in market access, delivering a devastating blow to exports and revenue.To meet the EU’s demands and maintain market competition, farmers will be increasingly compelled to turn to certification schemes like Organic, Fair Trade, and the Rainforest Alliance. These programs, while promoting sustainable farming practices, are tricky to obtain and require significant changes in existing practices.

A prominent concern held by coffee producers like ourselves, who work with smallholder farmers in East Africa, is that a failure to comply with the demands of the EUDR could result in either a monumental pivot in the industry, wherein larger-scale operations take over small, community-based farming operations, or a significant reduction in coffee production in the region altogether. Either outcome would be devastating to the local economy and the lives of the farmers. It is important that we view a move towards sustainability not solely as an endeavour to ease our own consciences, but also about improving the working framework of the developing economies we work with. As such, implementation of the EUDR must be balanced and considerate of the challenges faced by smallholders. By investing in the necessary support and infrastructure, we can ensure that the transition benefits everyone involved, especially those in developing regions.

What are we planning to do in response to the EUDR?

Last year, we began developing a new software project named ‘LIPIA,’ which means ‘payment’ in Swahili. LIPIA addresses the key issue of transparency and traceability in farmer payments in East Africa. It serves as a track-and-trace tool where each coffee lot can be logged as it moves from handler to handler, ensuring that the farmer who grew it is paid directly via SMS, rather than with cash, as was typical in the region until now.

Each farm we work with will have a unique user profile containing information about the farm and the types of crops they grow. This allows us to trace all the coffee we roast back to the individual who picked it. While the primary aim of LIPIA is to establish direct, traceable, and transparent payments to farmers, its GPS tracking system and user profiles can be used as proof of sustainably sourced coffee. With this new technology integrated into our operations, we will assist smallholder farmers in maintaining their connection to the coffee markets and encourage others in the coffee industry to move towards a fairer and more accountable system.