AFCA EUDR Empowering Collaboration for EUDR Compliance & Sustainability Presentation

The EUDR is not coffee-centric; it applies to a wide range of commodities, including coffee, cocoa, soy, palm oil, wood, and rubber, among others. The regulation aims to prevent deforestation and forest degradation caused by agricultural production across various sectors, not just coffee.

As for why coffee was singled out, the focus on coffee is due to its significant role in global trade. The EU made its own analysis of the past impact of coffee on deforestation and decided it was considerable and hence has projected their own analysis to a future, potential contribution of coffee to deforestation in certain regions, particularly in tropical areas where land conversion for coffee plantations can have environmental impacts. While other crops also pose risks to deforestation, the EU has prioritized the most significant commodities in terms of their deforestation footprint. However, the regulation’s scope will extend to any crop or product linked to deforestation once the legal framework is fully implemented.

The EUDR focuses on deforestation rather than afforestation because its primary objective is to prevent the destruction of existing forests in order to combat climate change, preserve biodiversity, and protect ecosystems that are critical to human survival. Deforestation, particularly in tropical regions, contributes significantly to carbon emissions and biodiversity loss, which is why the regulation aims to stop products linked to deforestation from entering the EU market.

Afforestation, the process of planting trees in areas that were not previously forested, is important for environmental restoration, but it is not the main focus of the EUDR. The regulation targets the preservation of existing forests and ensures that agricultural production that enters the EU does not contribute to the loss of these vital ecosystems. The emphasis is on halting the impact of products entering the EU on conversion of forests into agricultural land for crops like cocoa, coffee, soy, and palm oil, which can drive significant environmental harm.

Under EUDR, forest is generally defined based on the criteria set by international frameworks and conventions. The regulation specifically refers to forested areas that have the combination of the following characteristics:

1. Tree Cover: A land area covered by trees, either naturally occurring or planted, with a minimum density of tree cover (usually around 10% or more).
2. Forest Ecosystems: These are ecosystems where the trees and other vegetation play a significant role in maintaining the biodiversity, water cycle, and carbon storage. This includes tropical, subtropical, and temperate forests.
3. Legal Recognition: For the EUDR, the area must be legally recognized as forest land, either by national laws or through international agreements related to environmental protection.
4. Forest Categories: The EUDR also aligns with definitions from organizations like the Food and Agriculture Organization (FAO), which defines forests as land areas of at least 0.5 hectares with tree canopy cover of more than 10%, or trees able to reach a height of 5 meters at maturity, and not primarily used for agricultural or urban development purposes.

In the context of the EUDR, deforestation is identified as the conversion of forested areas into agricultural land, and any products imported into the EU that have been produced on land where deforestation occurred after December 31, 2020, are prohibited.

When visiting coffee farms across Africa, a common question arises about eucalyptus trees—specifically whether they would be considered deforestation, even if not native. While the EUDR doesn’t directly address eucalyptus, it focuses on preventing deforestation and forest degradation linked to agriculture. Eucalyptus could be relevant if its environmental impact, like excessive water use and ecosystem disruption, leads to unsustainable practices. In such cases, it may be assessed under national environmental laws, potentially affecting EUDR compliance and trade. The EUDR doesn’t provide a decisive answer to this question and hence the final risk assessment lays with the operator buying coffee from such areas.

All EUDR-related reporting, or what is referred to as due diligence, must be done through the EUDR Information System. This link provides information about the reporting requirements and includes training videos.

The EU has set up a training server called Acceptance, to help you familiarize yourself with the platform and the reporting requirements. Be sure to use this system and not the LIVE server, as the LIVE server is only for products that will be placed on the market or exported after the regulations come into effect. Due Diligence Statements submitted through the LIVE server hold legal value and may be subject to checks by Competent Authorities.

The responsibility for the EUDR due diligence statement lies primarily with operators and traders involved in the supply chain of goods covered by the regulation. Specifically:

• Operators: Businesses that place goods covered by the EUDR (e.g., cocoa, coffee, soy) on the EU market are responsible for ensuring that their products comply with the regulation. They must conduct due diligence to verify that their products do not contribute to deforestation or forest degradation.
• Traders: Businesses that trade in these goods, even if they don’t directly place them on the market, must also carry out due diligence. Their responsibility is limited to ensuring that the goods they trade comply with the regulation. In the context of the EUDR, traders refer to entities involved in the trade of covered goods within the EU market. This includes:
  • Importers: Traders who import goods from outside the EU, such as cocoa, coffee, or palm oil, are considered traders under the EUDR. They must ensure that the goods they import comply with the regulations, including verifying that the products are not linked to deforestation or forest degradation.
  • Suppliers within the EU: Traders who buy and sell goods within the EU, whether from EU or non-EU countries, are also considered traders. Their responsibility is to ensure that the products in their supply chain are deforestation-free and comply with due diligence requirements, even if they do not import goods directly.

The due diligence statement includes verifying that the product does not come from deforested land, ensuring compliance with relevant legislation, and maintaining traceability throughout the supply chain.

The EUDR does not specify where data must be stored for small farmer organizations. However, there are several flexible options available for managing and storing the necessary data to ensure compliance:

1. Cloud-based systems: These platforms allow easy synchronization and access to data across multiple locations, ensuring that information is up-to-date and compliant with EUDR requirements.
2. Centralized government repositories: In some countries, governments may set up centralized systems to manage and store data from all farmers, which can help standardize data management and facilitate compliance verification.
3. Farmer-owned data repositories: Some organizations may choose to create their own data storage systems, allowing them to maintain control over their data and ensure it meets regulatory standards without relying on external parties.
4. Open-source platforms: Free and customizable solutions, such as ODK and KoBoToolbox, ITC’s Deforestation-Free Trade Gateway are available to help smallholder farmers and their organizations collect and manage data securely and cost-effectively, ensuring compliance with traceability and due diligence requirements under the EUDR.

The cost of bringing producing countries into compliance with the EU Deforestation Regulation (EUDR) will be shared across multiple stakeholders:

• Private Sector/Operators: Companies involved in sourcing goods covered by the EUDR (e.g., importers, traders, and manufacturers) are responsible for ensuring that their supply chains comply with the regulation. They will need to invest in systems for traceability, due diligence, and verification of deforestation-free products, but the cost of this should not be passed on to farmers. If farmers or local traders face additional costs, the operators are supposed to contribute, according to the FAQ and Guidelines made available by the EC.
• Governments: They will need to invest in creating and enforcing regulatory frameworks, monitoring systems, and ensuring compliance. Additionally, they may provide support to local farmers through capacity-building programs and technical assistance to help them meet the regulation’s requirements.
• Development Organizations/NGOs: International development organizations, NGOs, and donors may offer financial and technical support to help producing countries meet the EUDR requirements. This could include funding for infrastructure, training programs, and capacity-building efforts for both governments and farmers.
• Consumers: While some costs of compliance may be passed to consumers through higher prices, this is typically a secondary consideration, as the primary burden falls on businesses.

The EUDR specifically ensures that compliance costs do not unfairly burden smallholder farmers or producers. The responsibility for due diligence and associated costs lies with the operators and traders placing goods on the EU market, not with the farmers. This approach encourages businesses to support farmers through technical assistance, training, and financial incentives, ensuring that farmers are not disadvantaged by the new regulatory requirements.

1. How can we create a unified and reliable digital platform to consolidate coffee data across all cooperatives while ensuring accessibility and usability for all stakeholders?
   The EU does not stipulate how cooperatives and countries should manage their data. However, here could be some ideas:To create a unified platform, a centralized cloud-based system that integrates data from all cooperatives, ensuring standardization could be created under a common governance model. The platform should be user-friendly and mobile-compatible, allowing easy access for stakeholders, including farmers, cooperative managers, and external partners. Data input forms should be simple, with language options to accommodate various stakeholders. Training programs should be offered to ensure that users are familiar with the platform, and cloud storage ensures scalability, security, and ease of access for all stakeholders.
2. What technological solutions (such as blockchain, GIS mapping, or mobile-based data collection) can be effectively implemented to enhance traceability and transparency in Kenya’s coffee value chain?
   Blockchain can be used to create a secure, transparent, and immutable record of transactions along the value chain, ensuring that each step, from farm to market, is verified. GIS mapping can provide accurate geolocation data, enabling traceability of coffee beans from specific farms to cooperatives and markets, enhancing transparency and sustainability. Mobile-based data collection tools like ODK or KoBoToolbox can empower farmers to easily record data on coffee production, quality, and harvest details, which is automatically uploaded to a centralized system for real-time tracking.
3. How can we incentivize cooperatives to adopt digital record-keeping systems, considering the challenges of digital literacy, internet access, and cost implications?
   Incentivizing cooperatives can be achieved through training and support in digital literacy, ensuring farmers and cooperative managers understand the benefits of digital systems, like improved access to markets and fair pricing. Subsidized or low-cost solutions, such as mobile-based apps that work on basic phones and require low data usage, can overcome the internet access challenge. Providing financial incentives or access to grants or subsidies for the initial costs of adopting digital systems can help reduce the financial burden on cooperatives. Additionally, partnering with NGOs or development organizations for funding or technical support could make the transition more affordable.