Deforestation stands as a grave threat to the global climate, responsible for a significant share of greenhouse gas emissions, estimated at around one fifth worldwide. Agriculture plays a dominant role in this crisis, driving approximately 90% of deforestation globally, with a large portion of the crops grown in deforested areas intended for export markets. Demand from high-income countries, including the UK, fuels this dynamic — recent data suggests that the UK’s consumption is linked to deforestation equivalent to an area the size of Liverpool annually.

In response, recent policy initiatives by the European Union and the United Kingdom seek to curb the environmental impact of deforestation through stringent regulations on supply chains. The EU’s Deforestation Regulation (EUDR) will require companies, from the end of 2025, to ensure that imported commodities such as coffee, cocoa, palm oil, soy, cattle products, timber, and rubber are deforestation-free and comply with local laws in their countries of origin. Similarly, the UK has developed the Forest Risk Commodities (UKFRC) scheme targeting comparable commodities, excluding timber and coffee for now, with implementation expected imminently. These regulations enforce due diligence on companies to verify their supply chains’ sustainability and impose penalties for non-compliance.

Despite this progress, a critical shortcoming lies in the exclusion of smallholder farmers from the conversation and consultation processes shaping these regulations. Smallholders, who produce a vast majority of certain key commodities—90% of cocoa and 75% of coffee worldwide, predominantly in Africa, Latin America, and Asia—face significant risks. Governments in low- and middle-income countries have voiced concerns about being sidelined, highlighting the imbalance of responsibilities as wealthier nations demand stricter environmental standards without adequately addressing their own climate commitments. The consequence is that many smallholders are left as passive “rule-takers,” lacking the resources or influence to meet new standards or adapt policies to their realities.

The one-size-fits-all regulatory approach poses practical challenges. For example, Ghana has an established traceability system for cocoa, but other countries like Sri Lanka are still developing such frameworks for commodities like rubber. These disparities create compliance hurdles without adequate differentiation or support. Additionally, compliance costs could be severe for smallholders. While importers’ costs might represent a small percentage of their operating expenses, these costs are often transferred down the supply chain. Reports from palm oil farmer groups in Indonesia suggest that individual farmers might face €70–€200 in initial compliance costs, with no guarantee of premium prices for their products. Such financial pressures risk pushing many smallholders out of formal supply chains or business altogether.

Data requirements for compliance further complicate matters. The EUDR mandates precise mapping of farmers’ land plots, providing detailed information on climate, biodiversity, and yields. This data could be a powerful tool for empowerment if managed with transparency, farmer consent, and control over their information. Emerging models, such as farmer-led data cooperatives and transparent national traceability systems, are promising in protecting privacy and delivering benefits. However, in some cases, data is extracted without clear consent or tangible farmer advantages, raising ethical and equitable concerns.

Land tenure is another persistent barrier. Many smallholders lack formal land titles, a requirement under the EUDR to prove legal ownership. While the regulation could encourage stronger land rights, ensuring these rights requires significant resources and inclusive processes involving smallholders and their governments, particularly to include marginalised groups such as women.

To address these issues, the UK government has a vital role in designing the UKFRC in a way that genuinely supports smallholders. Four key steps are recommended: Firstly, actively involving farmers in decision-making from the outset—strengthening cooperatives and enabling participatory governance around traceability and compliance systems. Secondly, providing accessible financial assistance, technical training, and long-term infrastructure support to facilitate the transition to compliant and sustainable farming. Thirdly, enshrining data governance principles that empower farmers by safeguarding privacy and ensuring informed consent, so data becomes a tool for market access and better earnings rather than merely a compliance burden. Lastly, the UKFRC should promote secure, inclusive land tenure initiatives, with special attention to vulnerable and marginalised communities.

These measures are critical because smallholder farmers already grapple with climate impacts, volatile markets, and high operating costs. Without targeted inclusion and support, deforestation regulations risk unintended harm, jeopardising both the farmers’ livelihoods and sustainable supply chains crucial to global climate goals. Integrating smallholder voices and needs into these frameworks offers a pathway not only to reducing deforestation but also to fostering resilient, equitable agricultural systems.

📌 Reference Map:

Source: Noah Wire Services