HomeAgribusinessHow EU's Good Intentions May Pose Risks to Africa's Small Farmers

How EU’s Good Intentions May Pose Risks to Africa’s Small Farmers

How EU’s Good Intentions May Pose Risks to Africa’s Small Farmers

Sacks of coffee are piled high in an Ethiopian warehouse, dwarfing the workers who scurry between them. “Our farmers’ lives are dependent on this coffee,” says Dejene Dadi Dika, the general manager of the Oromia Coffee Farmers Co-operative Union, which has more than half a million member farms. He is worried about a new eu deforestation regulation, which requires that every bean sold in Europe be traced to the field it came from. It costs the co-op about $4 to geo-locate each farm, and he wonders who will pay.

With the stroke of a pen, the eu is rewriting trading practices the world over. It wants firms bringing cocoa, coffee, rubber, soya, palm oil, wood or cattle products into Europe to prove that those commodities did not come from land which was deforested after 2020. An importer breaking the rules can be fined up to 4% of its turnover in the eu. Millions of small farms will need to be geo-located and supply chains redesigned. It is a race against time before the rule kicks in at the end of this year.

Environmentalists say it is high time the eu took responsibility for its voracious consumption, which has plundered and polluted the world. Its imports are associated with the deforestation of 1,905 square kilometres a year beyond its borders, more than the area of Greater London, reckons Trase, a non-profit group that tracks commodity trade. A third of that comes from cocoa, a fifth of it from palm oil.

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But exporting countries warn they do not have enough time to prepare. The new rule affects farmers everywhere, from Brazilian cattle ranches to Indonesian plantations. On Africa’s small farms it will be especially hard to implement. “Everybody’s trying to map their farms but they just can’t do it fast enough,” says Robert Byaruhanga of the Uganda Coffee Federation, an industry body. In Ethiopia, where coffee makes up 37% of exports, a local trader says it is impossible for most farmers to meet the deadline. Some will be shut out of European markets not because they are cutting down forests, but because they cannot prove compliance.

In Ethiopia, a 10% increase in the cost of exporting to the eu would shave 0.7% off gdp, reckons odi, a think-tank in London. The eu has pledged just €70m ($75m) to help countries reduce deforestation. A spokesperson says that support for small farmers is a priority.

At the root of the problem are messy, opaque supply chains. In countries like Uganda and Ivory Coast, coffee and cocoa are traded through layers of middlemen, jumbling together beans from different fields. Multinational buyers have been happy to keep an arm’s-length relationship with farmers. Only lately have they taken an interest in traceability, mostly in cocoa, nudged by the need to stamp out child labour and offer consumers feelgood stories.

An alternative approach is suggested by David Browning of Enveritas, a non-profit outfit. His team uses satellite imagery to identify fields where trees have been cut down, allowing governments to stop cultivation there. Several countries, including Ethiopia and Uganda, are pursuing this model, which would not require geo-locating every farm. It remains to be seen whether it will pass muster with the eu.

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The eu’s climate policies face pushback elsewhere. Last year it began a pilot programme to eventually levy imports of some industrial commodities, such as aluminium, to reflect the carbon price set by its own emissions-trading scheme. South Africa has called it “coercive”. The eu cannot please everyone, especially when dirty industries lobby against change. But if it is serious about going green, it must help poor countries with the transition, too. 

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