Joint Open Letter “Needs assessment of smallholders to adapt to EU Deforestation Regulation”

22/06/2022, An open letter signed by at least 50 institutions was finally handed over to Executive Vice-President Frans Timmermans, Commissioner Virginijus Sinkevičius, Commissioner Jutta Urpilainen, and some members of their respective cabinets. The letter aims to urge the commission to raise our great concern about the lack of consideration of the specific needs of smallholders and communities in the Global South to prepare for the future EU deforestation-free products regulation.

We welcome the Commission’s proposal – we believe it sets a high level of ambition to tackle global deforestation and forest degradation in EU supply chains. We strongly support its swift adoption and implementation. However, we regret the absence of a thorough assessment of potential challenges smallholders and communities may face in the global South to comply with future EU market access requirements, and what must be done to respond to those challenges. This prevents the development of a robust action plan to support smallholders and enable a just transition towards sustainable and deforestation-free practices in countries whose economies are highly dependent on commodity exports to the EU. Overall, it presents a risk to the success of the proposed regulation.

While the accompanying impact assessment published with the proposed regulation recognises that smallholders “could face costs to develop or implement systems to allow EU operators to comply with the new requirements” and that “initial short-term impacts caused by EU operators shortening/simplifying supply chains, reducing their number of suppliers and/or switching to lower-risk supply chains may particularly impact smallholders”, this assessment is poorly elaborated on and watered down with the argument that the cut-off date of 2020 could mitigate adverse effects for smallholders. 

This is hardly a sufficient mitigation measure considering the issue at stake and the vulnerability of smallholders within global supply chains. Eighty-four percent of the total farms worldwide are smaller than two hectares, while producing roughly 35% of the world’s food. The characteristics of smallholders (including their size) differ considerably between regions and sectors. Most of the cocoa and coffee is produced by smallholders, with an estimate of 90% of global cocoa production relying on 5-6 millions of smallholders. They also produce a substantial share of palm oil.

Smallholders form the backbone of the economy in many partner countries and loss of access to the EU market could have dire social and economic impacts on communities that are reliant on export-related incomes to meet their basic needs, and where limited options for alternative income exist. By disregarding this key variable, smallholders could be left with no other option than to further encroach into forests, so as to secure the short-term subsistence of their families by selling their products to less demanding consumer markets. On the flipside, they continue to suffer from the consequences of deforestation, which in turn accelerates the negative cycle of structural poverty and exacerbates further levels of deforestation and forest degradation.

Ignoring potential challenges for smallholders and communities to comply with future EU market access requirements is neither fair nor in line with the objective of the regulation to minimize the Union’s contribution to deforestation and forest degradation worldwide. The EU, which committed to achieve the Sustainable Development Goals, has the responsibility to ensure that the most vulnerable supply chain actors are included in its effort to reduce global deforestation. A first step in this direction is to have a clear understanding of the situation of smallholders and communities in relevant countries and sectors and the challenges they may face, to be able to put in place effective tailored support measures.

To read this joint letter in full please download it at the link below.

Joint Open Letter “Needs assessment of smallholders to adapt to EU Deforestation Regulation”
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