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Vuan Ma Thuot, Vietnam (AP) — Le Van Tam is well aware of how the vagaries of global trade determine the fate of small coffee farmers like him.
He planted his first coffee in 1995 on land on the outskirts of Buon Ma Thuot city in the central highlands of Vietnam. For many years, his focus was on quantity, not quality. Tam used large amounts of fertilizers and pesticides to increase yields, and world prices dictated his performance.
And in 2019, he partnered with Le Dinh Thu of Aeroco Coffee, an organic exporter to Europe and the US, to adopt more sustainable methods and grow his coffee plantations in sun-dappled areas. I changed it to a forest. Coffee grows alongside tamarind trees, providing nitrogen to the soil and supporting black pepper vines. Grass keeps the soil moist and mixes in plants to prevent pests. Thanks to the pepper, Tam’s income has also increased.
“The production volume has not increased, but the value of the product has increased,” he said.
In the 1990s, Tam was among thousands of Vietnamese farmers who took advantage of soaring global prices to plant more than 1 million hectares of coffee, mainly Robusta. By 2000, Vietnam became the second largest producer of coffee, accounting for one-tenth of its export earnings.
Vietnam hopes farmers like Tam will benefit from stricter European laws to stop deforestation that could recalibrate the way coffee is traded.
A worker waters coffee plants at a nursery in Dak Lak province, Vietnam, on February 2, 2024. (AP Photo/Hau Dinh)
The European Deforestation Regulation (EUDR) will ban the sale of products such as coffee from December 30, 2024, unless companies can prove they are not linked to deforestation. The new rules are not only aimed at reducing the risk of illegal logging; they are broad and apply to cocoa, coffee, soybeans, palm oil, timber, rubber and cattle. To sell these products in Europe, large companies will need to provide evidence that they are produced on land that has not been deforested since 2020. Small and medium-sized enterprises must submit by July 2025.
Deforestation is second largest source of carbon emissions What’s next for fossil fuels? According to a study, Europe ranked second after China in terms of the amount of deforestation caused by imports in 2017. 2021 World Wildlife Fund Report. Helen Belfield, policy director at Global Canopy, said in an interview with The Associated Press that if the EUDR is successfully implemented, the EUDR will be a “new normal”, especially if stricter standards for tracing the origin of products become the “new normal”. said it has the potential to alleviate this problem.
It’s not failsafe. Companies would simply sell products that do not meet the new requirements elsewhere, without reducing deforestation. Thousands of small farmers who cannot provide potentially expensive data could be left behind. Belfield said much will depend on how countries and businesses react to the new law. Countries should support smallholder farmers by creating national systems to ensure that exports are traceable. Otherwise, companies may end up only buying from very large farms that can prove they are compliant.
Orders for Ethiopian coffee are already declining. And Peru does not have the capacity to provide the necessary information for coffee and cacao grown in the Peruvian Amazon.
Workers sort and grade coffee beans at a coffee factory in Dak Lak province, Vietnam, February 1, 2024. (AP Photo/Hau Dinh)
This is on top of other challenges in Vietnam, such as worsening drought and declining groundwater levels.
“There will be winners and there will be losers,” she said.
Vietnam cannot afford to lose. Europe is the largest market for Vietnamese coffee, accounting for 40% of Vietnam’s coffee export volume. Six weeks after the EUDR was approved, Vietnam’s Ministry of Agriculture began working on preparing coffee-growing areas for transition. It has since rolled out a national plan that includes a database of where crops are grown and a mechanism to make this information traceable.
According to an August 2023 Agriculture Ministry communiqué, the Southeast Asian country has long viewed laws like the EUDR as “inevitable change” to promote more sustainable farming methods. EUDR could help accelerate such transformation. according to Minister of Agriculture Le Minh Hoang.
Tam and his export partner Too quickly adapted.
Even if the cost is higher, you can still get high-quality coffee at a better price, Tu said.
“We have to choose the best quality, otherwise we will forever be workers,” says Tam, who makes his favorite coffee at his coffee processing factory next to his farm. Mr. Tu said while drinking. This is where trucks loaded with red Robusta and Arabica coffee cherries arrive from other farms, where the pulp is removed and the coffee beans are laid out on tables to dry in the sun.
Tu has already obtained a certificate from an international organization on sustainability that allows him to deal with the EUDR. David Hadley, director of regulatory impact programs at the Costa Rican nonprofit Preferred by Nature, said such certificates typically address deforestation issues, but may require some tweaking. Stated.
Enabling Vietnam’s roughly 500,000 smallholder farmers, who produce about 85% of coffee, to collect and provide data to show that their farms are not causing deforestation remains a challenge. Some people may have trouble collecting location information using their smartphones. Lorne Lee of International Economics Consulting said small exporters need to set up systems to prevent other uncertified products from being mixed with coffee that meets EUDR requirements.
Farmers will also need documentation proving compliance with national laws on land use, environmental protection and labor, Lee said. Additionally, coffee’s long value chain, from bean production to collection and processing, requires digital systems to ensure error-free records.
Processed coffee beans seen at a coffee factory in Dak Lak province, Vietnam, on February 1, 2024 (AP Photo/Haudinh)
Global Canopy’s Belfield said Brazil, the world’s largest coffee producer, has a relatively well-organized supply chain because its coffee is grown on plantations further away from forests. He said he was in a favorable position. The 2024 report also states that Brazilian coffee is most likely to meet his EUDR requirements. Brazilian researchWith much of it exported to the EU, Brazil has few smallholder farmers, and about a third of its coffee-growing area already has some form of sustainability certification.
The EUDR acknowledged concerns by giving less prepared suppliers more time, and said European governments should work with affected countries to pay “particular attention to the needs of smallholders and indigenous communities.” “However,” he said, “it will enable the transition.” The 2028 review will also examine the impact on smallholders.
“Nonetheless, it is still expected to be costly and difficult for smallholder communities,” she said.
In Peru, it is difficult to collect information on hundreds of thousands of small-scale farmers, given the weak state institutions and the fact that most farmers do not have land ownership rights, a report says. Says. study A study on the impact of the EUDR by the Amazon Business Alliance, a joint initiative of USAID, Canada, and the non-profit organization Conservation International.
According to the U.S. Department of Agriculture, coffee accounts for about one-third of Ethiopia’s total export earnings. report, the response is slow. Gizat Worku, chairman of the Ethiopian Coffee Exporters Association, said the national plan launched in February 2024 will fundamentally address how to collect the necessary data from millions of smallholder farmers and provide that information to buyers. He said that the problem had not been resolved.
“It requires tremendous resources,” he said
A worker dries coffee beans at a coffee factory in Dak Lak province, Vietnam, on February 1, 2024. (AP Photo/Hau Dinh)
Gizat, who like many Ethiopians goes by his first name, said orders have declined due to doubts about the country’s ability to comply with the EUDR. He said some traders are considering switching to other markets, such as the Middle East and China, where Ethiopian coffee is “booming”. But switching markets is not easy.
“These regulations will have a huge impact,” Guizat said.
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