European Union anti-deforestation regulations: challenges and opportunities for Vietnamese coffee

On May 16, 2023, the European Parliament passed anti-deforestation regulations. The roadmap for this regulation is from November 2021, proposed by the European Commission; June 2022, the common approach of the European Council; September 2022, Resolution of the European Parliament; November 2022, preliminary political agreement between the European Parliament and the Council; May 2023, passed; effective December 2024; For small and medium enterprises, the deadline will be postponed until June 2025.

Challenges for Vietnamese coffee

Comparing with this regulation, Vietnam’s main export industries, including wood and wood products, rubber, and coffee, will be affected when officially applied, especially coffee, a crop subject. There are some areas interspersed with forests.

The anti-deforestation regulations define forest degradation more broadly to include the conversion of primary or naturally regenerated forests into planted forests or other forested land. This means that production forests (mainly growing industrial crops such as rubber, cashew nuts, coffee, pepper, tea, etc.), which account for more than 52% of Vietnam’s forest area, are not sustainable, and there is a risk that they may be included in the concept of “forest degradation.” According to ENVERITAS Company (an American non-governmental organization for sustainable development) reported at the ICO Workshop on anti-deforestation, Vietnam has about 8,000 hectares of coffee-growing areas out of 90,000 hectares of forest lost in 2021. In addition, the price of Vietnamese coffee in the 2023–2024 crop year reached a record level of 70,000 VND/kg, which could increase the risk of people destroying forests to grow coffee trees. This is also the time to warn about deforestation for production.

The next challenge for Vietnam’s coffee industry is its small production base. Vietnam has over 1 million coffee farming households, of which more than 70% have an area of less than 0.5 hectares, so traceability proves the origin of coffee production and supply before 2020. Coffee that does not cause deforestation is very difficult, especially when organizing the synchronous application of new regulations.

Besides, the industry information system has not been completed, especially the garden location and origin traceability system. Vietnam does not have a map to classify high-risk and low-risk coffee-growing areas. The cost of building a map to locate coffee gardens for traceability is very high. Coffee growing areas are small and fragmented, so GPRS positioning information requires a lot of cost, time, and effort.

Currently, only a few large export enterprises, such as Nestle, have built their own database systems to meet the requirements of the European Union market. However, if each business builds this system on its own, costs will increase very quickly, buyers will have to pay higher prices, and sellers will pay lower prices. Therefore, first of all, Vietnam needs to have a national database on forests and coffee gardens to prove the origin of goods produced on deforested land, ensuring smooth export activities.

Regarding compliance with relevant laws of the production country, including human rights, production must respect the well-being of indigenous people. This is a relatively sensitive issue when conditions Production in our country still has many limitations, such as overuse of fertilizers, affecting livestock and crops, and water pollution. In addition, the most recent survey report of the International Labor Organization (2018) unilaterally stated that the Vietnamese coffee industry has cases not only related to deforestation but also using child labor. mainly belong to ethnic minority groups. At this sensitive point, according to the new regulations, our coffee exports to the European Union will likely be the first product to be monitored at the highest level, while this is the leading export commodity to this market. (accounting for 11% of the European Union market).

Opportunity for Vietnamese coffee

According to the Sustainable Trade Initiative and major European coffee importers, Vietnam’s deforestation for coffee production is very low; the rate of deforestation for coffee production in Vietnam is less than 0.1%.  Therefore, Vietnamese coffee agricultural products have a great opportunity to avoid violating European regulations.

Since 2014, Vietnam has had a policy of closing and stopping the logging of natural forests, and on July 22, 2016, the Government Office issued Notice No. 191/TB-VPCP on seriously implementing the policy of closing timber. The Prime Minister’s door for natural forest logging. By 2017, Vietnam will basically completely stop allowing the main exploitation and salvage of natural forest wood, while the European Union’s regulations only apply from December 31, 2020.

Regarding origin traceability, the Vietnamese government, especially the Ministry of Agriculture and Rural Development, has implemented programs on growing area codes for coffee trees with many origin traceability models. Currently, about 40% of the coffee area follows the sustainability standards of major buyers in the world (4C, UTZ, etc.).

Vietnam meets the European Union’s Anti-Deforestation Regulations.

Assessment of the impact of the European Union’s new regulations on preventing deforestation on the export of some agricultural products from Vietnam and the European Union’s regulations on preventing deforestation and forest degradation on agricultural products. Agricultural product production, including coffee, is both a challenge and an opportunity for Vietnamese agriculture to restructure agricultural products, especially coffee, for sustainable development, proving to the world that Vietnam really grows green.

The requirement for traceability and transparency of agricultural product origins is an inevitable requirement of the market, including the European Union market. To soon respond and have a roadmap to implement this regulation of the European Union, Vietnamese agriculture needs to promote communication so that authorities and farmers clearly understand the European Union’s regulations on anti-deforestation. and forest degradation when producing agricultural products. Vietnam needs to focus on building a national data system and maps of forests and coffee-growing areas; agree with the European Union to support acceptable declarations; have an action plan to adapt to the European anti-deforestation law; have synchronous solutions to support businesses; and popularize propaganda. Translating European anti-deforestation regulations to the business community and coffee growers.

In addition, the European Parliament encourages large multinational corporations and development organizations such as the Sustainable Trade Initiative to cooperate with the Ministry of Agriculture and Rural Development in the form of public partnerships – private. This cooperation aims to build an effective, low-cost information and data system for growing areas, improve traceability, strengthen the monitoring system, and transform livelihoods for farmers in these areas. risk. This is the foundation to ensure Vietnam is included in the low-risk group when applying European anti-deforestation regulations, building a reputation and brand for Vietnamese agricultural products now and in the future.

The framework of the National Action Plan of the agricultural sector to meet European anti-deforestation regulations was also presented for the first time, including the following contents:

Establish public-private partnership groups for industries affected by European anti-deforestation regulations and deploy public-private partnership activities;

Develop technical guidance and propagate and disseminate European anti-deforestation regulations to management agencies at all levels and actors in industry value chains;

Build and recognize a national database on growing areas;

Develop information sharing and feedback mechanisms;

Develop and deploy traceability, and develop and implement a mechanism to strengthen community patrols and supervision to protect forests;

Build and develop sustainable livelihood transformation models in at-risk areas;

Build a regular dialogue channel with the European Union, synthesize, and share information periodically;

mobilize financial and technical support from international organizations and the private sector to support industry value chains in adapting to European anti-deforestation regulations.

Source: ipsard.gov.vn