EUDR Leads The Way
Earlier this year, Farmforce wanted to gauge the EUDR’s impact towards industry traceability habits, processes and EUDR awareness. You probably know that EUDR is short for the newly adopted EU Deforestation Regulations. We know it’s challenging to navigate with so much uncertainty in recent weeks towards EUDR adoption and implementation, timeline, and so on.
Based on that survey, we’ve gained some fascinating insights, and we’re especially keen to note that many findings now show what we’ve been seeing and hearing at industry events, and now we can quantify this!
- Measure current traceability awareness and practices
- Explore industry-wide preparedness and challenges
- Gain industry trend insights
- Optimise our current and future solutions
The following process is what brings us to interesting results.
Our survey had 29 questions, with 87 responses. Our audience remains everyone involved in the agri-commodities supply chain, meaning companies buying from smallholder farmers, cooperatives, traders, processors, etc., worldwide. This audience includes nearly all the crops and regions highly concerned by the EUDR. Download the FULL report here!
Traceability Belongs To Sustainability
Most recently, we attended in-cosmetics, where many stakeholders and company representatives engaged with us, knowing what traceability is, but were confused about where or even how to start. I saw first-hand that many companies with dedicated sustainability initiatives and teams focus on traceability and its processes within these sustainability positions.
60% of respondents are in Sustainability-related roles, with 40% belonging to IT/Operations. Suppose you are attending right now, and you are a procurement manager, and you work with traceability. In that case, we’re not saying traceability must belong to sustainability, but in general practice, we see traceability ownership within sustainability arenas. And, if you’re not sure where to start, ask your sustainability team.
Many responses showed a need for more knowledge towards the main objectives of such sustainability programs, with findings in the full report towards a lack of inter-connectedness and cross-functionally or sustainability efforts falling under categories such as Operations or Innovation, meaning traceability can get lost.
Here we have a second interesting finding. Respondents reported that field-level or farm-level traceability was a top priority. When asked, “Has traceability down to the farm level been an objective?” 90% said “Yes,” with 20% of what they buy is traceable down to the farm level.
While everyone has a traceability goal, only a few people are currently achieving field-level traceability. Here we see a significant industry-wide gap.
To dig a little deeper into this, we performed a poll to determine the significant pain point in this process, and here we found a “lack of expertise” and a “lack of digital tools,” or what we call “AgTech”, as the top two barriers. We take this to mean that there is no full traceability without an on-the-ground presence where data will be or must be collected.
Are you currently fully traceable? If EUDR happened tomorrow, would you be compliant?
If yes, awesome, congrats! You’re doing it, but if not, no worries, you are not alone, and we are here now!
In our third finding, we found a high risk of import-related deforestation. While this is not surprising, being able to quantify what many have suspected, that is, a need for traceability for many ingredients and products on EU shelves.
We see here a need for digitalised processes and digital tools to ease companies, importers, producers, and the like towards compliance, whether that be EUDR or other regulations that will impact business as we know it. We found that 72% of respondents are either sure they are importing deforestation-related produce into the EU market OR cannot verify that these products are deforestation-free. This same 72 % will soon NEED to take action, and it’s a long way to go. We still have time, but there is work to be done.
Non-compliance WILL Lead to Disruptions and Consequences
Many supply chains are not ready to comply with EUDR. From 1-6, how would you rate the impact of such regulations on your operations? Our average answer was 4.7.
EUDR will have an impact, so it’s essential to be well-prepared, the impact does not have to be harmful, and non-compliance risk can be reduced with proper timing, implementation, and mitigation.
When asked to elaborate on the most difficult aspect of the regulations to comply with, we found #1: Field-level Traceability For All Relevant Crops, #2: Quality Assurance, and #3: Link Imported Crops With Deforestation Events.
Again, we’ve long suspected this to be the case. Still, it’s crucial to quantify and verify knowing where agri-business players are most worried allows, thus enabling all of us to take appropriate action.
This is perfectly normal to us as so much of the EUDR has only recently been solidified, with possibly more adaptations forthcoming.
- Traceability belongs to sustainability and roles, and cross-functional teams must be implemented.
- Farm-level traceability is a top priority for companies, and we’ve seen that the earlier mitigated actions take place, compliance down the road will be possible.
- Embracing EUDR compliance in everyday business practices now will inevitably lead to more supply chain resiliency and the possibility to continue selling products to, from, and within the EU.
Want to watch the FULL webinar? Check out our YouTube Channel!
Find our complete webinar deck below: