Home MOREBUSINESS & ECONOMY EU Deforestation Regulation 2023 threatens livelihood of millions of coffee producers

EU Deforestation Regulation 2023 threatens livelihood of millions of coffee producers

The price of producing coffee is a mere fraction of its cost in supermarkets and even less of what we will pay in a cafe. As we gulp at the prices being charged literally millions of producers are faced with going out of business.

by Chris White
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EU Deforestation Regulation
EU Deforestation Regulation to take effect from January 1st, 2025.

The European Union is failing to deal with the issue as are other governments around the world. An in-depth report, the 2023 Coffee Barometer, introduced by Ethos Agriculture with the support of Conservation International and Solidaridad, highlights that there is a risk that companies faced with up-coming legislation will source their products increasingly from developed  regions such as Brazil where farmers are better placed to operate under the up-coming EU Deforestation Regulation (EUDR).

The EUDR is set to come into effect in 2025, meaning literally millions of coffee farmers around the world may not able to export and face going out of business. According to Ethos Agriculture’s Sjoerd Panhuysen, lead author of the Coffee Barometer: “Brazil has a maximum 300,000 coffee farmers while in Ethiopa there are some 2.2 million. That is what governments should be focussing on”.

According to a press release for the Coffee Barometer’s launch: “Coffee is produced by an estimated 12.5 million farmers in roughly 70 countries but just five of them – Brazil, Vietnam, Columbia, Indonesia and Honduras – contribute 85 percent of the world’s coffee supply. The remaining 15 percent of the global supply is produced by 9.6 million coffee producers”.

“The income of farmers could be increased until a decent income is reached without dramatically increasing the price for consumers,” commented Gert van der Bijl, EU Policy Advisor at Solidaridad adding: “consumers should do their best to support those companies that give their support to farmers.”

He asks: “Where does the money go, that is the question?” He is critical of the way that coffee companies fail to inform the public of the realities of the sector saying that: “They give a rosy picture of people picking coffee in a tropical forest.”

Saying that Solidaridad is not the founder of the EU’s mandatory due diligence rules for products and derivatives affecting deforestation but is one of the founders of Fair Trade in the Netherlands,  he went on to add that it is important that the EU and governments set-up and define measures that direct the sector towards sustainability and that companies do step up to them and ensure that coffee producers are well paid.

The comment prompted Sjoerd Panhuysen  to say: “What is surprising to me is how unprepared and not proactive companies are. Many roasters lack a clear vision and strategy to address the sustainability challenges in the coffee sector. Instead they they opt for Corporate Social Responsibility (CSR) projects often not directly linked to their coffee supply chain. Coffee companies are unprepared for the up-coming legislative due diligence measures, under which they will be responsible for the implementation.”

The EU should be in partnership with producing counties. In parallel with the legislation the EU has to develop support structures, especially for countries with many coffee farmers, like Uganda and Ethiopia, to make the standards work in practice. They are not ready yet but the requirement will be there in January 1st, 2025.

“We are focusing on the fact that companies will be focusing on working with countries with a good infrastructure and that are already well developed,” said Sjoerd Panhuyse.

“If companies focus only on developed countries that meet EU standards, then in countries such as Ethiopia coffee communities will face poverty. I do hear companies saying that the regulation is forcing them to deal in Brazil but it is something that they can deal with and influence themselves by connecting with and supporting suppliers.”

Van der Bijl and Panhuyse both underline that the the report is designed to ensure that decisions about the future of coffee are done collectively and effectively.  Sjoerd Panhuysen admitted: “It all looks a bit like doom and gloom but in the end it is a matter of collective efficiency. We need more collaboration  but collective decision making is slowly gaining ground towards creating a level playing field. We need to combine all the difficult efforts and individual challenges, and that is why we have done the research to provide a basic understanding.”

Gert van der Bijl concluded: “The positive side is that it can be done. It is a positive to pay a better price and raise the income of 12.5 million coffee farmers without dramatically raising the price of coffee that you buy in the supermarket.”

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