As the European Union Deforestation Regulation (EUDR) heads toward its Dec. 30 application date, a new report from the International Institute for Sustainable Development (IISD) suggests many smallholders still lack the resources needed to meet EUDR-related buyer requirements.
The report from the sustainability-focused think tank involved interviews and surveys with 333 farmers and producer groups behind numerous agricultural products in 16 countries, including coffee farmers. The authors did note that the sample was uneven and should not be treated as statistically representative.
Market Leakage
The research did find that while awareness of EUDR was widespread, many still faced barriers involving land documentation, compliance costs, traceability and technical capacity.
Notably, 74% of all respondents said they believed stricter compliance requirements could push farmers toward less-regulated markets. Among coffee respondents, that figure was 79%.
“This finding highlights a critical challenge for policy-makers and supply chain actors: ensuring that the EUDR reduces deforestation without excluding the smallholders who play a vital role in global agricultural production,” the authors of the new IISD report wrote.
The regulation, adopted in 2023, is designed to prevent products linked to deforestation or forest degradation from entering or leaving the EU market. It covers coffee alongside cattle, cocoa, palm oil, rubber, soy and wood. Under the current schedule, the law begins applying to large and medium-sized operators on Dec. 30, 2026, and to most micro and small operators on June 30, 2027.
In their replies to IISD, some farmers said they may sell to buyers offering higher prices or faster payments rather than remain in EUDR-oriented channels. Others could lose access to EUDR-compliant buyers because they cannot afford mapping, traceability or other compliance costs.
The authors warn that such “leakage” could undermine the regulation itself, promoting trade in markets with weaker environmental requirements.
The Importance of Networks
The report also identified a growing divide between smallholders already connected to cooperatives, third-party certification programs and organized international supply chains and those working independently. Connected farmers generally reported better documentation, traceability, training and institutional support.
Recent DCN reports have noted different levels of farmer preparation in the coffee lands of Colombia, Costa Rica and Honduras.
Across all commodities within the IISD report, 84% of respondents identified government policies and programs as a needed form of assistance. That was followed by financial assistance (78%), training and capacity building (74%) and better information and awareness (71%).
“The report argues that achieving the objectives of the EUDR will require a shared-responsibility approach involving governments, private sector actors, voluntary sustainability standards organizations and sustainability initiatives, and development partners,” the authors wrote. “Supporting smallholder inclusion is not only a matter of equity, but also fundamental to the effectiveness and credibility of the regulation itself.”
IISD is a Canada-based think tank focused on sustainable development. The report was produced through IISD’s State of Sustainability Initiatives program, which conducts research and advises governments, sustainability-standard organizations and supply-chain actors.
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