African Coffee Farmers Face Uncertainty as European Market Demand Declines

ADDIS ABABA, Ethiopia – African smallholder coffee farmers are facing a potential loss of income due to new mandatory rules established by the European Union (EU). The rules, implemented in 2023, aim to prevent the importation of commodities, such as coffee, palm oil, and cocoa, that originate from deforested land or involve labor and/or human rights abuses. To avoid heavy fines, companies must prove compliance by the end of 2024.

Tsegaye Anebo, the general manager of Ethiopia’s Sidama Coffee Farmers Cooperative Union, expressed concern over the impact of the new EU regulations. He stated that there has been a decrease in buyers this year and uncertainty in the market due to the unclear consequences of the rules. Other African traders, such as the Oromia Coffee Farmers Cooperatives Union, have also raised concerns over EU companies shunning their products.

The EU’s anti-deforestation law has received praise from environmental organizations for ensuring that products in European markets are not sourced from deforested areas. However, critics argue that the new laws may penalize smallholder coffee farmers, particularly in Africa, and potentially lead to a coffee shortage in Europe.

Coffee production has been a significant contributor to deforestation, with approximately 130,000 hectares of forest lost annually. The new regulations aim to make products ‘traceable’ back to their production origins, but critics argue that the law overlooks the production side and does not consider the challenges faced by smallholder farmers.

Complying with the EU’s anti-deforestation law poses difficulties for smallholder farmers who often lack the necessary infrastructure and support. In Ethiopia alone, around 2.2 million farming families rely on coffee production as a significant source of income. Many of these farmers may struggle to meet the compliance requirements by the December deadline.

While coffee expansion is not the root cause of deforestation, certain regions and producers have already implemented sustainability rules and find it easier to prove compliance. However, other producers may lag behind, and the new regulations might have little impact on deforestation overall.

Uncertainty surrounding the implementation of the EU’s deforestation regulations may also lead to coffee shortages and higher prices in Europe. The lack of clarity and additional costs associated with compliance have prompted some coffee farmers to seek buyers outside of Europe. Combined with other factors such as extreme weather patterns and population growth, the rising cost of Europe’s favorite drink remains a concern.

In conclusion, African smallholder coffee farmers face challenges in complying with the EU’s anti-deforestation law. While the law aims to prevent the importation of commodities from deforested areas, critics argue that it may penalize smallholder farmers and potentially result in a coffee shortage in Europe. The impact of these regulations on the livelihoods of coffee farmers and the industry as a whole remains uncertain.