Prepare our coffee industry to meet EU deforestation rules

When the European Union postponed the deadline for certain products including coffee to meet stringent deforestation rules to December 2025 for medium and large companies and June 2026 for smaller companies, Ugandan traders were relieved.

As Africa's second-largest coffee producer and a vital supplier to the EU, Uganda has less than 12 months to get the coffee industry ready to meet the rules or forfeit the market. The European Union Deforestation Regulation (EUDR) imposes strict supply chain due diligence, and reporting requirements on certain commodities and products imported into and exported out of the the EU. They include cattle, cocoa, coffee, palm oil, rubber, soy, and wood, among others. The rules are intended to protect the EU from consuming environment-harming products.

While Uganda trades the other products, it is coffee exports (60percent) that find the biggest market in the EU – meeting the EUDR is now a matter of urgency. If we cannot roll up our sleeves and get down to work, it is possible that at the end of this year, we will lose an important market.

The government's response, while commendable, reveals the magnitude of the task ahead. Before merging the Uganda Coffee Development Authority (UCDA) into the Ministry of Agriculture, an ambitious national coffee farmer registration program had been initiated. With UCDA no more, it remains unclear how fast this process is progressing.

The allocation of Shs35 billion for farmer registration, with Shs 13 billion earmarked for 2024/2025, demonstrates serious intent. However, the fact that only 170,000 farmers out of 1.8 million have been registered by the end of 2024 raises serious concerns about meeting the compliance deadline.

The challenges we face are multifaceted. Our current land tenure system poses a significant obstacle – a mere 16 percent of agricultural farmers possess proper tenure documents, while an alarming 59 percent lack any tenure rights over their farming land. This legal uncertainty could effectively lock many farmers out of the European market.

The traceability requirements present another formidable challenge. Over 112 registered coffee-exporting companies must now maintain detailed five-year records of their coffee sources. Our traditional supply chain, involving more than 10,000 middlemen and 923 coffee-buying stores, complicates this requirement significantly. Moreover, the satellite-based verification system mandated by the EUDR may struggle to accurately assess our agroforestry-based coffee cultivation methods.

While alternative markets like the United States, China, Australia, and Japan might absorb some of our coffee, basic economics suggests this shift could lead to lower prices. This could force vulnerable smallholder farmers to abandon coffee production in favor of crops with less stringent requirements.

The path forward requires immediate action. The government's collaboration with the Agricultural Business Initiative (aBi) and the establishment of the EUDR Coordination Unit with Shs16 billion in funding shows promise. The National Action Plan, developed through public-private partnership, provides a framework for compliance.

However, time is of the essence. Our position as the third-largest green coffee supplier to the EU-27 bloc, contributing 7.8 percent of their coffee imports in 2023, is at risk. Failure to meet EUDR requirements could devastate our export revenue and threaten countless livelihoods.

The coffee sector has long been Uganda's economic backbone. Now, more than ever, we need coordinated action from the government, industry stakeholders, and farmers to protect this vital industry. Our future in the global coffee market depends on our ability to adapt to these new regulatory demands while supporting our vulnerable small-holder farmers through this transition.

The writer, Ms Florence Nakazi is a research fellow at EPRC, Makerere University.