Global Coffee Firms Struggle with EU's New Deforestation-Linked Import Laws

European Union's groundbreaking legislation against deforestation-linked goods sees global coffee giants unprepared. The report warns of potential detrimental impacts on vulnerable small-scale farmers, emphasizing unintended environmental consequences.

The groundbreaking EU legislation, slated for enforcement by the end of 2024, mandates importers of commodities such as coffee, cocoa, beef, soy, rubber, and palm oil to provide a due diligence statement proving their goods do not contribute to forest destruction. Failure to comply could lead to significant fines.

The biennial Coffee Barometer report, jointly prepared by a consortium of NGOs, highlights the industry's lack of readiness for the law. It suggests that coffee companies might redirect their sourcing to more developed regions like Brazil, which boasts better traceability systems. This potential shift in sourcing could leave millions of small-scale, poverty-stricken farmers in a precarious position.

The report calls upon the EU and coffee firms to act, urging them to prevent such circumstances. It emphasizes that desperate farmers may be forced to expand into forested areas to increase output and make ends meet, should the need arise.

However, this unintended consequence would undermine the law's purpose. Deforestation accounts for approximately 10% of global greenhouse gas emissions, contributing to climate change. The EU law aims to address the bloc's role in deforestation.

Coffee production involves around 12.5 million farmers across approximately 70 countries. Yet, merely five countries - Brazil, Vietnam, Colombia, Indonesia, and Honduras - produce 85 percent of the world's coffee.

The remaining 15 percent is cultivated by approximately 9.6 million farmers in Ethiopia, Uganda, Tanzania, Kenya, Peru, Guatemala, Nicaragua, El Salvador, Costa Rica, and Mexico. Unfortunately, as highlighted in the report, these countries possess inadequate infrastructure and low traceability levels.

The report adds that smallholders, lacking the necessary organization and resources to comply with the law's data requirements, would bear the initial impact without proactive support from buyers.

The EU's deforestation law has sparked significant concerns among producing countries. Indonesia has accused the EU of "regulatory imperialism." At the same time, Malaysia claims it is a deliberate effort to raise costs and create barriers for its palm oil sector - a crucial source of export revenue.

Over the last two decades, approximately 130,000 hectares of forest have been lost yearly due to land clearance for coffee cultivation.

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