There is something mysterious about how a coffee bean becomes a commodity. From remote farms and steep hillsides, it finds its way to 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 Havelaaryou have to be a coffee broker to find out what’s going on in the world.
Unless, that is, you’re the EU. Under an ambitious plan to combat deforestation, it wants to know “what’s going on” in growing its coffee – and its cocoa, rubber, soy, beef, palm oil and wood. The EU’s Deforestation Regulation (EUDR), which comes into force sometime before the end of 2025, requires companies importing these products to trace them back to the fields they came from. This 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 farms and steep hillsides, it finds its way to 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 Havelaaryou have to be a coffee broker to find out what’s going on in the world.
Unless, that is, you’re the EU. Under an ambitious plan to combat deforestation, it wants to know “what’s going on” in growing its coffee – and its cocoa, rubber, soy, beef, palm oil and wood. The EU’s Deforestation Regulation (EUDR), which comes into force sometime before the end of 2025, requires companies importing these products to trace them back to the fields they came from. This 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 change the practices of multinational buyers, the routines of middlemen and the workflow in rural areas where crops are collected and processed. The implementation challenge is perhaps greatest in coffee and cocoa, particularly in Africa, because these crops tend to be grown by millions of small farmers rather than on commercial plantations. For African growers, at one end of a very unequal system, the new era of “traceability” may disrupt their access to European markets – but they may also use it to their advantage.
The EU is both a voracious consumer of tropical produce and a hub for their trade. The bloc imports about a third of the world’s coffee and half of its cocoa. In fact, Brussels can rewrite the rules for farmers worldwide simply by adjusting its own requirements.
The EUDR does exactly that, banning the import of seven forest-related commodities if they have been grown on land that was cleared since 2020. Trase, a nonprofit that tracks deforestation and commodity trade, estimates that EU imports of these products between 2019 and 2021 accounted for 736 square kilometers of worldwide deforestation annually, an area more than 10 times the size of Brussels. (Other methods that use higher-resolution satellite imagery provide different estimates.) About 34 percent of this 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 about their origin: a single coordinate for small farms and polygons for larger ones. This information can be cross-referenced with satellite imagery to determine if trees have been felled. The regulation applies even to land legally deforested under national law, and importers who break the rules can face fines of up to 4 percent of their EU turnover. It is an important part of the EU’s plan to become CO2 neutral by 2050.
The regulation was originally supposed to come 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 extra year of preparation time, until the end of 2025 – a proposal that will now be considered by the European Parliament and the Council.
SEATINI, a Ugandan NGO working 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 the forests and the rights of the people who live there. A campaigner at Fern, a non-governmental organisation, said the commission had “bowed to constant pressure from companies and countries that knew the regulation was coming for years but have not properly prepared for it.” Some major chocolate companies, including Nestlé and Mars Wrigley, oppose a delay that they warn would jeopardize the investments they have already made in preparation.
But traceability will come, no matter how long it takes. In rural Africa, which supplies about 85 percent of the EU’s cocoa imports and about 13 percent of its coffee imports, it is an important shift. Many multinational buyers operating there still do not know exactly where their goods are raised.
One reason is that it has generally not been profitable for companies to seek traceability, except for specialty products, such as high-quality coffees, for which consumers will pay a premium. In addition, many African governments do not have good land holdings and 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 are traded in Africa. During and after World War II, states established marketing boards, which were usually the only entities allowed to export crops such as cocoa and coffee. They were often poorly run and paid farmers little, but provided 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, implemented cautious reforms, leaving many of the marketing councils’ 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 in 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 idea where the coffee comes from.”
Although supply chains vary across countries, it is generally true that more intermediaries mean less transparency. “Whenever [coffee] changing hands, you lose a little more of that visibility about where the coffee came from,” said Justin Archer, head of sustainability at Sucafina, a multinational coffee trader based in Geneva.
Another country where coffee passes through layers of middlemen is Ethiopia. There, it can take two years to geolocate all 5 million coffee-growing households, said Gizat Worku, general manager of the Ethiopian Coffee Exporters Association. The problem is not that coffee is grown on cleared land, he said, but how to prove that 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 labour. Ghana and Ivory Coast, which together account for more than half of the world’s cocoa exports, are both building national traceability systems that they say will soon be operational. This is a big 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 around $78 million to help countries develop deforestation-free value chains, but companies and cooperatives are shouldering most of the costs of mapping agriculture, with only casual 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. This method, developed by the nonprofit Enveritas, would combine a deep-learning model with high-resolution satellite imagery.
Complying with the EUDR will also mean more work for farmers. For example, many farmers grow crops in several different fields and have to keep the beans separate from each, said Obed Owusu-Addai of the Ghana Civil-Society Cocoa Platform. This may mean harvesting from different fields on different days or using separate drying mats. He supports the EUDR, which he believes is crucial for the future of cocoa farming, but worries that farmers “get nothing” for all the extra work.
Some in the East African coffee industry are more pessimistic. A 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 difficult, the trade could tilt toward larger farms, which are better equipped to map their fields, and to countries like Brazil, where commercial plantations are more widespread.
Despite widespread concerns, many farmers’ representatives in Africa hope that the traceability requirements in the EUDR can make supply chains a little fairer. In July, platforms representing 120 civil society groups and farmers’ associations from the Ivory Coast and Ghana wrote to the EU in support of the regulation.
Currently, supply chains are riddled with dodgy practices, from the use of rigged scales by middlemen – a way of paying farmers for less of the crop than is sold – to payments that fall below mandated minimums. Farmers from Uganda to the Ivory Coast claim they have been ripped off, but export companies, typically subsidiaries of large multinationals, have often turned a blind eye to wrongdoing by the middlemen 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 slopes— Men on motorcycles or trucks buying their cocoa — cheating them of promised sustainability premiums or paying below the government-mandated minimum. The national regulator is trying to solve this problem by introducing direct electronic payments together with 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 organization. And pressure from the EUDR is speeding up 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 in decades to the way African coffee and cocoa are traded. Done well, it can lead to shorter supply chains and a little more accountability. If done poorly, it can impose burdensome regulations on farmers and push the smallest ones out of the market entirely. Farmers should not be the ones paying the price for protecting the forests.