Photo credit: International Coffee Partners (ICP)
Europe’s coffee professionals unite and call for a delay in implementing the European Union Deforestation Regulations (EUDR), scheduled to go into effect on December 30th, 2024. The International Coffee Partners (ICP) group and European Coffee Federation (ECF), which represent 90% of European coffee traders, roasters, and companies such as Nestle SA, Illycaffee, Neumann Kaffee Gruppe, and Lavazza, fear that the new regulations could unintentionally promote poverty and counteract sustainability.
In a recent public letter sent to EU policymakers, the ICP stated that while they “generally support the objectives” of the EUDR, most of the world’s 12.5 million smallholder coffee farmers lack the resources necessary to comply by the end of the year. The ICP urges establishing a transition period to help farmers, suppliers, and producing countries meet the regulations.
The ECF expressed concern for coffee farmers and producing countries that rely heavily on the $20.6 billion European specialty coffee market. Denying access to the world’s largest specialty coffee market will devastate the economies of many Latin American and African coffee-producing countries.
According to the Fairtrade Foundation, 80% of the world’s coffee is grown by smallholder farmers who manage five hectares of land or less. Cutting off an extremely valuable part of the global coffee supply chain could detrimentally affect European consumers and the estimated 5.5 million smallholder producers already living below the international poverty line (earning less than $3.20 a day).
In an interview with the Perfect Daily Grind, Mercel Starfinger, the Sustainable Business Unit Programme Manager for Neumann Kaffee Gruppe, stated that “EUDR requires a lot of paperwork, geodata, and evidence that shipments are deforestation-free and in compliance with national laws…The cost to purchase a GPS point or polygon are similar whether you are a 0.5ha farm or a large estate. But per bag of coffee, this would only be 3% to 4% of total costs for an estate, and much more for a smallholder given the differences in production volumes.”
A spokesperson for the European Commission said that including smallholders in the ongoing dialogue is a priority. The EU has established a €70 million ($76 million) fund to help support smallholders, address their concerns, and ensure the successful rollout of EUDR.
Farmers spending precious resources complying with deforestation regulations expect to be compensated for the additional costs and effort. Wilson Cardenas, a coffee farmer from Honduras, told Bloomberg that he hopes to make an additional $10 per bag on top of market prices.
“We aren’t asking for handouts, and we don’t want to be given stuff for free, but we want buyers to understand that this requires more effort, more technical knowledge, and more labor,” said Cardenas. “Mapping is a cost. Maintenance is a cost. We are helping save the planet. We want the market to treat us fairly.”
Both the ICP and ECF highlight the massive challenges facing the coffee sector, related stakeholders, and the EU authorities in charge of tracking compliance. A detailed vetting process has yet to be laid out. Marcel warns “Hold-ups and interim shortages could also occur following implementing new procedures before custom clearance. This is challenging under the short timeline given the remaining unclarities in the regulations.”
Marcel also worries about the quality of coffee available to European consumers after the EUDR goes into effect. "Overall, Europe is likely to see more expensive coffees from less diverse origins, which reduces the variety of flavor and creates future supply risks, especially given climate change.”
Most European coffee industry professionals agree that stakeholders must collaborate with producers at origin to assist in implementation, education, and resource distribution. Otherwise, more smallholder farmers will be forced further into poverty, and sales of deforested coffee to markets outside of Europe will increase, going against all that the EUDR is working to prevent.