There are serious expenses tied to many of the possible solutions being discussed. Drafts of the regulations have consistently stated a requirement that imports be supported by a due diligence statement that illustrates that the commodity is not linked to deforested land, via the presentation of GPS coordinates and/or a polygon (perimeter map).

The sheer labour investment needed to walk and record maps of every coffee farm out there is staggering, almost inconceivable. Furthermore, many of the current tools on the market come with significant price tags. This is just scratching the surface. What happens if four exporters purchase from the same group of farmers? In the absence of pre-competitive collaboration, the possibility of quadrupling the efforts (and costs) needed for all four to achieve compliance with the regulation becomes quite real.

But who takes the hit on the cost? Plainly, it cannot be farmers and producers. But the pressure these costs will apply to margins across the supply chain will almost certainly apply indirect strain to farmgate pricing.

It is common for smallholder farmers to live on the land on which they grow coffee. How do we grapple with the fact that EUDR could create a scenario in which a farmer’s private data, likely housed in multiple platforms, may need to cross multiple hands before import? Complying with GDPR, the EU’s data privacy regulations, requires respecting the farmer’s right to request that their data not be shared or may be easily removed. They must have a straightforward means to do so.

I also have a growing concern about farmers’ rights to their own data. If a customer records their polygon, the farmer should be provided a copy of that data simultaneously. In absence of this (or a pre-competitive collaboration), a farmer’s EU customer base might be constrained to whomever has gathered the data, which might constrain how much the farmer can earn.

Many origin countries have their own legislation for what is considered legal or illegal deforestation in that country. What happens when a national definition or law conflicts with the EU’s? In a recent discussion on the topic hosted by the GCP (Global Coffee Platform), one representative for Brazil’s coffee industry pointed out that Brazil allows for legal deforestation, through which a small percentage of forested area upon a property is permitted to be removed in the context of regulated land management. Respecting the context of colonialism, how do you communicate to a farmer – a native expert in environmental stewardship – that to maintain their business prospects, they are now additionally required to comply with not just national law, but those of a foreign power to protect their future livelihood?

The EUDR is expected to formalise what it considers to be countries of high, medium and low risk. Presumably, bringing in commodities from countries flagged as high risk will require greater levels of scrutiny, due diligence, and the additional labour and costs to facilitate those. However, where two origin countries, one high risk and one low risk, can produce coffees of similar qualities and profile, demand will be naturally biased toward the country with the least red tape. Plainly, farmers in high-risk countries stand the chance of being cut out of markets through no fault of their own. At the time of writing, the EU has yet to publish their guide on implementation or the map which will dictate which origin countries will be deemed “high risk” for deforestation.

In short, the industry is still missing many of the fundamentals needed to make progress towards its shared sustainability goals. So why do I still consider myself an optimist? Because while we are going to need to overcome all of the above challenges, quickly, for EUDR to become a net positive, there are things on the horizon that are giving me hope. One, there is a large number of voices calling for pre-competitive collaboration: coming together on a single platform to crowdsource polygons, enhance farmer privacy, and share data in an efficient way. As members of GCP, Falcon is one of these vocal advocates. Two: free and open-source options for EUDR compliance may be on the horizon. While INA’s INATrace may not have EUDR capability until sometime in 2024, it’s something to keep a close eye on for long-term, cost-effective compliance.

Lastly, there has been some indication from the EU that the discovery of an instance of deforestation may not restrict farmer market access with the finality that concerned parties worry it will. In an FAQ document published by an EU Commission on June 29^th (see link below), they stated that, “if the affected forest is allowed to regenerate, it would not be deemed deforestation, and an operator could source wood from that forest once it has regrown.” While this response was using wood as the commodity and it only discussed forest regeneration (as opposed to the human-driven reforestation), I remain optimistic that due diligence that contains remediation or explores partnerships on reforestation may be an option, should farmers wish to entertain it. I look forward to further clarification from the EU in the months ahead.