Potential impacts of the proposed EU regulation on deforestation-free supply chains on smallholders, indigenous peoples, and local communities in producer countries outside the EU

According to the new European Commission proposal for a regulation on deforestation-free products, six commodities - cattle, wood, palm oil, soy, cocoa, and coffee and their derivate products – grown or raised on land that was subject to deforestation or forest degradation will be banned from entering the EU market. In this commentary paper, we discuss the possible unintended effects of the regulation and elaborate on potential ways to reduce the negative impacts, on vulnerable groups in producer countries, such as smallholders, Indigenous peoples, and local communities (IPLCs). Such impacts could comprise exclusion of smallholders and IPLCs from high-value supply chains of commodities covered by the regulation, inadequate price premiums to cover the costs of complying with this regulation, increase the risk of land conflicts between large-scale and small-scale agriculture, push smallholders and IPLCs to marginal lands, and even exacerbate human rights risks already associated with large-scale commodity production. In order to avoid or minimize such impacts, we propose: 1) to make provisions for companies, smallholders, and producing regions to receive sufficient support in their transition to deforestation-free supply chains and to provide incentives so that this transition can be inclusive; 2) to further promote and strengthen holistic approaches, such as jurisdictional or other integrated landscape management approaches to address the many issues that can arise from conflicting interests and unequal power distribution in affected landscapes; 3) to make clear provisions for protection of human rights and to promote land rights for smallholders and IPLCs related to tenure security; and 4) to ensure that regular and robust impact assessments inform policy about both direct and indirect impacts of the regulation on smallholders and IPLCs so that timely and adequate action can be taken to minimize the unintended effects of this regulation. Addressing potential negative impacts on smallholders and IPLCs would also ensure that the progress achieved so far in terms of other UN SDGs related to poverty, inequality, hunger, and land restoration is not compromised.