Shade-grown coffee at a Coffee estate in Kodagu district (Coorg), Karnataka. File | Photo Credit: Murali Kumar K.

India’s major plantation sectors such as rubber and coffee have heaved a sigh of relief as the EU Parliament has voted in favour of a proposal by the European Commission to delay the implementation of EU Deforestation Regulation (EUDR) allowing growers, exporters and traders additional time for compliance.

Accordingly, large coffee operators and exporters must meet EUDR regulations by December 30, 2025, while micro and small growers and traders have time until June 30, 2026 to comply, as against the earlier EU set mandatory due diligence procedures and compliance deadline of December 2024.

Being EUDR-compliant indicates a grower’s forest-based coffee produce is legal, and not sourced from any deforested land or unethically cultivated.

Notably, over 70% of Indian coffees are sold in EU countries, and therefore the compliance extension has direct implications on coffee players in India, although India was one among the few countries which grew coffee under two tier thick shade of native trees, say industry players. “Our coffee estates, in addition to coffee and shade trees has diverse flora and fauna. So Indian coffees are most sustainably grown.

In spite of that India opposed EUDR since the compliance does not incentivise sustainably grown coffees,” Coffee Board of India CEO and secretary K.G. Jagadeesha told The Hindu. “Now given that EUDR is a regulation already passed by EU, we have no option but to comply as 70% of Indian coffee exported is going to EU. Coffee Board is developing a platform for assisting coffee producers in India to comply with EUDR. We also welcome the EU decision to extend the deadline,” he added. However, the Coffee Board CEO said EUDR compliance burden on planters and growers would be huge as it required technological and financial resources which won’t be compensated.

Expressing similar concerns K.G. Rajeev, chairman, Karnataka Planters’ Association which represent over 70% of coffee growers in the country, said, ‘‘There are challenges in mobilisation of resources to invest by small and medium sized holdings to be EUDR compliant. Also there are elements of ambiguity. Strict enforcement without clarity on methodology to be implemented may not have desired results. All these may have adverse impact on productivity and profitability of the industry.”

According to Mr. Rajeev, EUDR is a regulation with requirements for due diligence and traceability, which needs lot of data to demonstrate compliance both on ground and documentation. He insisted that Indian coffee couldn’t be compared with coffees in any other geographies as it was predominantly grown under shade.

Coffee activities also encouraged preservation of existing forests which in turn provided habitat for variety of wildlife, avian populations and thus promoted natural biodiversity, he argued. Instead of putting the onus of compliance only on growers, industry institutions and government bodies should help in establishing compliance of regulations, he opined, adding, eco-friendly practices with improved soil health and carbon sequestration aligns with EUDR focus of protection of biodiversity and ecosystem.

Postponement of the implementation of the EU Deforestation Regulation is expected to buoy up the international market for rubber and related products in the short term, said Santosh Kumar, chairman of the Rubber Committee of the United Planters’ Association of Southern India.

“There were ambiguities and concerns in the market. Now that the EUDR will be implemented from 2026, the international market will have a positive impact in the short term,” he said. According to Rubber Board Executive Director M. Vasanthagesan, with the postponement of the regulation by an year, there is more time to prepare the rubber sector. The measures will continue, he added.

The board has entered into an agreement with Hyderabad-based TRST01 as its technology partner to issue due diligence certificates to rubber exporters. “We recently held a stakeholders meeting and will start registering the exporters. We plan to do it in phases, starting with select districts in Kerala. The small-scale exporters will pay an user-fee and register,” he said.

Industry sources said that of the annual production of about 8.5 lakh tonnes of natural rubber, only 4,000 tonnes are exported directly. However, exporters of rubber products will have to source from the growers who are compliant with the EUDR and so the impact will be on the growers.

source: http://www.thehindu.com / The Hindu / Home> Business> Industry / by Mini Tejaswi & M Soundariya Preetha / November 17th, 2024