EUDR is coming, and Farmforce wanted to hold an industry event with many industry players from various organisations and backgrounds to discuss the EUDR’s impact on business at every level. Below is a conversation briefly highlighting key insights from the night. Farmforce hosted the roundtable at the Hob House in a semi-formal family-style roundtable setting.
While Farmforce is framed as a Norwegian SaaS company, we have more than half of our employees located worldwide beyond Norway. In conjunction with The Marketing team based in Oslo, Farmforce’s Global Sales Director, Rodney Muriuki, based in Nairobi, Kenya, created a dinner roundtable event.
“The key points that stick out are the level of detail that the regulation requires from the Farmers, while before it was considered a nice to have – the regulation now requires that the producer’s information (name, land tenure etc.) be included in the due diligence statement,” Rodney informed us after the dinner.
Who is going to bear the cost of compliance?
The EU has not released any funding to support this initiative, and coffee prices are at an all-time low. Global inflation is ever-increasing, and the cost of compliance needs to be borne by someone in the supply chain. Which could be the smallholder farmers or the consumers.
There is support required in breaking down the regulation into bite-size chunks to aid compliance. On-ground local sourcing teams need support (technical & financial) to be compliant. Otherwise, they will lose their market.
Some coffee exporters – we had 2 of the 3 largest exporters out of Kenya in attendance. Remain unconvinced that the regulation will be enforced and that an extension of some sort will be applied.
Our customers then encouraged the coffee traders and exporters to onboard Farmforce as a tool that will help make their compliance work easier and help them keep track of their farmer suppliers and initiatives.
There are some companies that are at the forefront of compliance (securing their supply chain) and others who have taken the wait-and-see approach. This demonstrates how different people see the regulation.
The biggest implications are the 4% penalties on the annual turnover. This is to be imposed on the importing companies in Europe – and so the local exporters in Africa will wait for the EU-based importers to invest in them to develop capacity for compliance in their supply chain. The risk: these exporters supply to many importers – which is a potential avenue for them to make money off these importers who want to secure their products.
Did you know? 85% of coffee in Kenya goes into Europe. These markets need support. Otherwise, they risk losing a big part of their foreign income, and their livelihoods will be affected as a result.
Farmforce continues to establish itself as a solid partner in successfully rolling out and monitoring sustainability initiatives for large, medium and small-sized companies.
There is space for everyone to participate and facilitate compliance.