Implications of the EUDR on rubber, timber and coffee smallholders: Case studies from Thailand and Indonesia
The European Union (EU) will start applying the EU Regulation on Deforestation-free Products (EUDR) on 30 December 2024. The regulation aims to reduce the EU’s contribution to global deforestation and calls for the consumption and trade of 'deforestation-free' products.
The EUDR puts a ban on the sale of rubber, wood, coffee, soya, cattle, palm oil and cocoa commodities and some of their derived products, where companies cannot prove these did not come from deforested land. Across the forest landscapes of Southeast Asia, providing this proof is not always a simple or straightforward task. As such, even as the EUDR aims to promote sustainability in trade, it could pose potential challenges for smallholders in practice.
Widescale implementation of the EUDR will likely affect communities that are already dealing with climate change impacts. Often, these are the same communities facing difficulties securing their land rights. Ensuring the quality and quantity of their products is not an easy feat for them.
To assess these and other potential impacts, RECOFTC conducted field research amongst rubber smallholders in Thailand and coffee and timber smallholders in Indonesia.
Thailand is a large rubber producer and exporter, including to the EU. We chose Surat Thani, a province that supplies a large quantity of the rubber exported, as our study site.
Indonesia is one of the largest teak timber producers in the world. Our study investigated the impacts of the EUDR on two smallholder timber groups – in Gunung Kidul regency and Purworejo regency.
Indonesia is the second-largest coffee producer in Asia and Oceania. Our study was conducted in Ciwidey, a district in Bandung regency.
Our findings
There is limited understanding of the EUDR. Many stakeholders, including smallholders, cooperatives and intermediaries have little to no awareness of the EUDR and its implications.
Even in cases where stakeholders are aware, misconceptions are common, with some confusing it with voluntary forest certification schemes. Entities such as local government agencies and processing factories have basic knowledge of the EUDR, but translating this awareness into practical implementation is challenging.
Given the complexity of existing national land tenure regulations, the EUDR will add to the compliance burden for smallholders. Limited resources and coordination among government agencies exacerbate these challenges.
Supply chains and traceability issues also present obstacles. There are multiple value chain actors – including smallholders, cooperatives and independent intermediaries, compounding these challenges. Additionally, information flow among actors along the value chains is limited.
Market information gaps and limited support from buyers are already constraining smallholders. Without awareness of the EUDR, smallholders and cooperatives face setbacks in accessing market information and obtaining formal contracts with buyers.
There are also productivity and infrastructure barriers. Low productivity and inadequate infrastructure, amplified by weather fluctuations, pose significant roadblocks to meeting market requirements and complying with the EUDR. Improving sustainability practices and meeting market standards will require technological and financial support.
Our recommendations
The dissemination of simplified information about the EUDR through accessible channels such as mobile applications, community meetings and extension services can make a big difference. Targeted awareness campaigns to educate stakeholders about regulatory standards and sustainable practices are necessary. RECOFTC can contribute to such processes by conducting capacity gap assessments and subsequently providing tailored training modules to improve knowledge and skills.
For unified approaches to compliance and resource distribution, collaboration among stakeholders – smallholders, processors, government agencies, CSOs and buyers – must be strengthened. Research organizations, regional organizations and those with a strong link to communities can help foster cooperation between government agencies, industry players and smallholders in forest landscape initiatives. As an international nonprofit organization working in community forestry, RECOFTC is well positioned to facilitate these processes and bring relevant actors on board.
To improve the effectiveness of the EUDR, it is important for the EU Commission and EU delegations to grasp the real-world challenges encountered by smallholders and other stakeholders. This understanding will lead to more practical and successful policy implementation. With a presence in five countries in the Mekong region that supply commodities to the EU, RECOFTC can support engagement in dialogues with the EU and EU delegations.
Strengthening partnerships between government agencies, civil society organizations, buyers and smallholders and farmer groups is crucial if communities are to be able to comply to the EUDR. As a trusted broker in the Asia Pacific region, we work to bridge gaps among communities, countries, international organizations and alliances. We can leverage our experience and unique position in the science, policy and practice sphere to support communities in their efforts to adapt.
###
Adapted for the web from the Executive Summary of our upcoming report, Potential impacts of the EU Regulation on Deforestation-free Products (EUDR) on smallholders in Thailand and Indonesia – case studies on rubber, timber and coffee, which will be published in June 2024.
Pratya Youngpatana is program officer for private sector engagement and enterprising communities at RECOFTC.
Martin Greijmans is senior program officer for private sector engagement and enterprising communities at RECOFTC.
Gomos Anditio Purba is an intern with RECOFTC Indonesia.
Nathalie Faure was senior program officer for forest governance, institutions and conflict transformation at RECOFTC.
This research was made possible through the Transformative Land Investment project funded by the Swiss Agency for Development and Cooperation (SDC).
RECOFTC’s work is made possible with the support of SDC and the Government of Sweden.