There is something mysterious about how a coffee bean becomes a commodity. From remote farmsteads and steep hillsides, it finds its way into global markets as a weighed, graded, standardized product. This journey—like much of global trade—is often opaque. As the 19th-century Dutch novelist Eduard Douwes Dekker, better known as Multatuli, noted in his anti-colonial masterpiece Max Havelaar, you have to be a coffee broker to find out what goes on in the world.
Unless, that is, you are the European Union. Under an ambitious scheme to combat deforestation, it wants to know “what goes on” in growing its coffee—and its cocoa, rubber, soy, beef, palm oil, and timber. The EU Deforestation Regulation (EUDR), which will enter into force at some point before the end of 2025, requires companies importing those products to trace them back to the fields they come from. That means geolocating millions of farms across several continents, an exercise in mapping the world.
There is something mysterious about how a coffee bean becomes a commodity. From remote farmsteads and steep hillsides, it finds its way into global markets as a weighed, graded, standardized product. This journey—like much of global trade—is often opaque. As the 19th-century Dutch novelist Eduard Douwes Dekker, better known as Multatuli, noted in his anti-colonial masterpiece Max Havelaar, you have to be a coffee broker to find out what goes on in the world.
Unless, that is, you are the European Union. Under an ambitious scheme to combat deforestation, it wants to know “what goes on” in growing its coffee—and its cocoa, rubber, soy, beef, palm oil, and timber. The EU Deforestation Regulation (EUDR), which will enter into force at some point before the end of 2025, requires companies importing those products to trace them back to the fields they come from. That means geolocating millions of farms across several continents, an exercise in mapping the world.
But unlike a map, the EUDR will also change the landscape it describes. It will alter the practices of multinational buyers, the routines of middlemen, and the workflow at the rural stations where crops are collected and processed. The challenge of implementation is perhaps greatest in coffee and cocoa, especially in Africa, because those crops tend to be grown by millions of small farmers, rather than on commercial plantations. For African growers, at one end of a highly unequal system, the new era of “traceability” could disrupt their access to European markets—but they might be able to use it to their advantage, too.
The EU is both a voracious consumer of tropical commodities and a hub for their trade. The bloc imports around a third of the world’s coffee and half of its cocoa. In effect, Brussels can rewrite the rules for farmers the world over simply by tweaking its own requirements.
The EUDR does exactly that, prohibiting imports of seven forest-related commodities if they have been grown on land that was deforested since 2020. Trase, a nonprofit that tracks deforestation and commodity trade, estimates that between 2019 and 2021, EU imports of those products accounted for 736 square miles of worldwide deforestation annually, an area more than 10 times the size of Brussels. (Other methods, using higher-resolution satellite images, furnish different estimates.) About 34 percent of that deforestation comes from cocoa, 19 percent from palm oil, and 13 percent from coffee.
To prove that their goods are legitimate, importers must provide geolocation data on their origin: a single coordinate for small farms and polygons for larger ones. That information can be cross-referenced with satellite images to determine if any trees have been cut down. The regulation applies even to land that was legally deforested under national laws, and importers that break the rules can be fined up to 4 percent of their EU turnover. It is an important part of the EU’s plan to become carbon neutral by 2050.
The regulation was originally due to enter into force at the end of this year. But that timeframe was criticized as unrealistic by industry associations, the United States, several countries in the global south, and even most EU states. In early October, the European Commission proposed an additional year of preparation time, until the end of 2025—a suggestion that will now be considered by the European Parliament and Council.
SEATINI, a Ugandan NGO that works on trade issues, described the postponement as “good news,” but the prospect of a delay has alarmed many campaigners. Human Rights Watch said it is “bad news” for forests and the rights of the people who live there. A campaigner at Fern, a nongovernmental organization, said the commission had “bowed to constant pressure from companies and countries who knew the regulation was coming for years but haven’t prepared properly for it.” Some major chocolate companies, including Nestlé and Mars Wrigley, oppose a delay, which they warn would jeopardize the investments they have already made in preparation.
But traceability is coming, however long it takes. In rural Africa, which supplies about 85 percent of the EU’s cocoa imports and around 13 percent of its coffee imports, that is an important shift. Many multinational buyers operating there still do not know exactly where their goods are farmed.
One reason is that it has not generally been profitable for companies to pursue traceability, except for specialty products, such as high-grade coffees, for which consumers will pay a premium. In addition, many African governments do not have good land ownership records, and they struggle to prevent large-scale smuggling of cash crops across their borders.
But the deeper explanation lies in the waves of reform that reshaped the way cash crops in Africa are traded. During and after World War II, states created marketing boards, which were usually the only entities allowed to export crops such as cocoa and coffee. They were often badly run and paid farmers little but gave some structure to agricultural marketing. In the 1980s and 1990s, this system was dismantled, often at the behest of the International Monetary Fund and the World Bank. Some countries, such as Ghana, made cautious reforms, leaving many of the marketing boards’ functions intact. Others, such as Uganda, rushed headlong into the free market.
The result, in Uganda, is a system where coffee is traded through several layers of middlemen who in turn sell to foreign-owned export companies. “The reforms of the early ’90s … created a value chain that was very, very decentralized and totally deregulated,” said Robert Byaruhanga, the president of the Uganda Coffee Federation, an industry body. “You get the coffee, but you have no clue where the coffee has come from.”
Although supply chains vary across countries, it is generally true that more intermediaries means less transparency. “Every time [coffee] changes hands you lose a bit more of that visibility about where the coffee came from,” said Justin Archer, the head of sustainability at Sucafina, a multinational coffee merchant based in Geneva.
Another country where coffee passes through layers of middlemen is Ethiopia. There it might take two years to geolocate all of the 5 million households that grow coffee, said Gizat Worku, the general manager of the Ethiopian Coffee Exporters Association. The problem is not that coffee is grown on deforested land, he said, but how to prove it is not—which smaller growers may struggle to do.
The picture is a little rosier in the West African cocoa sector, which has been working on traceability for some time, motivated in part by concerns about child labor. Ghana and Ivory Coast, which together account for more than half of the world’s cocoa exports, are both building national traceability systems, which they say will be operational soon. This is a vast undertaking. A recent study in Ivory Coast, for example, found that as of 2019, less than half of the country’s cocoa beans could be traced back to their area of origin using public data.
The EU has announced an initial package of some $78 million to help countries develop deforestation-free value chains, but companies and cooperatives are taking on most of the cost of mapping farms, with only haphazard coordination by national governments. Several countries, including Ethiopia and Uganda, are trying to push the EU to adopt a “territorial approach” to implementation, which would declare large areas to be deforestation-free, without the need to geolocate individual farms. That method, developed by the nonprofit Enveritas, would combine a deep-learning model with high-resolution satellite images.
Complying with the EUDR will also mean more work for farmers. For example, many farmers grow crops in several different fields and will have to keep separate the beans from each, said Obed Owusu-Addai of the Ghana Civil-Society Cocoa Platform. That might mean harvesting from different fields on different days or using separate drying mats. He supports the EUDR, which he thinks is essential for the future of cocoa farming, but worries that farmers “get nothing” for all that extra work.
Some in the East African coffee industry are more pessimistic. One leader in the Ethiopian sector, who asked not to be quoted by name, described the EUDR as a “disaster” for farmers. If implementation is too cumbersome, trade could tilt toward larger farms, which are better prepared to map their fields, and to countries such as Brazil, where commercial plantations are more prevalent.
Despite widespread concerns, many farmers representatives in Africa are hopeful that the traceability requirements of the EUDR could make supply chains a little fairer. In July, platforms representing 120 civil society groups and farmers associations from Ivory Coast and Ghana wrote to the EU in support of the regulation.
Currently, supply chains are riddled with sharp practice, from the use of rigged weighing scales by middlemen—a way to pay farmers for less of the crop than is sold—to payments that fall below mandated minimums. Farmers from Uganda to Ivory Coast argue that they are ripped off, but export companies, typically the subsidiaries of large multinationals, have often turned a blind eye to malpractice by the intermediaries they buy from. Their ignorance of their own supply chains allows them to wash their hands of responsibility.
In Ivory Coast, for example, farmers complain that the pisteurs—men on motorbikes or trucks who buy their cocoa—cheat them out of promised sustainability premiums or pay below the government-mandated minimum. The national regulator is trying to solve this problem by introducing direct electronic payments alongside its new traceability system. These documented transactions should make it harder for intermediaries to bend the rules.
“Many farmers see [the EUDR] as an opportunity to sell their cocoa at a guaranteed price,” said Bakary Traoré, the executive director of Initiatives for Community Development and Forest Conservation, an Ivorian nonprofit. And pressure from the EUDR is accelerating national efforts to develop traceability systems.
The EUDR will not change the global power imbalances between small farmers and multinational traders. But at the local level, it could usher in the most significant changes for decades in the way that African coffee and cocoa are traded. Done well, it might lead to shorter supply chains and a bit more accountability. Done badly, it could impose burdensome rules on farmers and push the smallest ones out of the market altogether. Farmers should not be the ones who pay the price for protecting forests.
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