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Complying with EUDR: Smallholder coffee farmers at risk of being excluded from EU market

KAMPALA, June 15, 2024 – Smallholder coffee farmers in Uganda and the rest of the world are at risk of being excluded from the European Union [ EU ] market due to the European Union Deforestation Regulation [EUDR], according to a letter from the International Coffee Partners [ICP].

The letter, signed by the ICP-affiliated European companies such as Delta Cafés of Portugal, Franck of Croatia, Joh. Johannson of Norway, Lavazza of Italy, Löfbergs of Sweden, Neumann Kaffee Gruppe of Germany, and Tchibo of Germany, highlights the challenges faced by smallholder coffee farmers in complying with the EUDR.

The EUDR aims to protect forests in coffee-growing regions. However, ICP in the letter emphasises the need to consider the situation of smallholder farmers, who may struggle to provide the required detailed geodata by the end of 2024. This, according to ICP could result in their exclusion from the EU market, not because the said farmers grow coffee on deforested land, but because they lack the necessary data.

“The 12.5 million smallholder coffee farmers worldwide who produce up to 80 percent of the world’s coffee rely on volatile markets and are exposed to increasing climate risks, rising input prices, and other external economic shocks. The EUDR now poses another major challenge for them. Many of them will be unable to provide the required detailed geodata by the end of 2024. This means that smallholder farmers in particular will be excluded from the EU market, not because they grow their coffee on deforested land, but because they lack the necessary data,” the letter reads in part.

It adds, “Awareness of this issue must be raised in the producing countries, areas must be protected and investments must be made in reforestation. However, the situation of smallholder coffee farmers must be taken into account as they require suitable data provision systems, an appropriate transition period, and additional financial resources to comply with the new law.”

The letter also raises concerns about the potential negative impact of the EUDR on smallholder farmers’ incomes and market shares. It suggests that farmers may shift their sales to countries outside the EU, which could counteract the goal of reducing deforestation.

“While the EUDR is an important step towards deforestation-free coffee production, it must also take into account the interest of smallholder farmers. Otherwise, the EUDR risks reducing smallholders’ incomes and market shares and increasing their vulnerability to poverty, impeding their potential transition to a more sustainable agriculture. In order to adapt, farmers are likely to shift their sales to countries outside the EU. These outcomes would run counter to the goal of reducing the risk of deforestation.”

For example, the letter says, a readiness assessment in Uganda, one of ICP’s project regions, revealed that the country’s coffee producers are not yet prepared to comply with the EUDR. “The nature of the Ugandan coffee supply chain makes it difficult to track the origin of coffee beans. Only about 10  percent of Ugandan coffee producers currently have their coffee traced.”

To meet the requirements of the EUDR, ICP says Ugandan farmers will need to develop an effective traceability system which will likely require years of planning, refining, and improving skills as well as a significant initial investment. “Moreover, maintaining such a system will require constant financial resources each year,” says the letter.

To address these challenges, the ICP calls on the EU to extend the date of entry into force of the EUDR and integrate a transition phase. It also emphasises the need for the creation of data provision structures and financial resources to support smallholder coffee farming families in building technical capacity and knowledge. This, according to the ICP, is crucial for ensuring a smooth transition to more sustainable supply chains and curbing deforestation without adverse effects.

“The EUDR verification process must be simple enough and accessible for smallholder coffee farmers to comply with. Still, they will need time, technical capacity, and knowledge to adjust to the new requirements. We as International Coffee Partners, therefore, call on the European Union to extend the date of entry into force of the EUDR and to integrate a transition phase.

Furthermore, the creation of the necessary data provision structures and provision of financial resources for smallholder coffee farming families to build the technical capacity and knowledge should be supported and facilitated. This is the only way to ensure a smooth transition to more sustainable supply chains and to curb deforestation without adverse effects,” the letter reads.

ICP is an established company with a not-for-profit status. Its objective is to contribute to achieving a fair and sustainable coffee sector in all coffee-producing countries like Uganda, according to Rui Miguel Nabeiro, Chair of the company’s Steering Committee.

In Uganda ICP is currently working in Kyotera district to help improve the livelihoods of coffee farming families by making them more competitive and climate-resilient, based on sustainable practices. From January 2024 – December 2026, the company will be working with 1,400 smallholder farming families,  and 600 youth.

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