EU deforestation law could pose challenges to rubber smallholders

LONDON—The European Union is introducing anti-deforestation regulations to force all stakeholders in the rubber and tire value chain to clarify whether or not any of the natural rubber being supplied, traded or used is linked to deforestation.

As such, the European law is "positive," as it encourages buyers to take and cascade responsibilities across the entire complex value chain, according to Paris-based sustainability consultancy Ksapa, in written comments to European Rubber Journal.

Potential problems, however, lie in imposing due diligence measures across the supply chain, noted Ksapa, which among other activities, leads a project with Michelin to enhance the wellbeing and productivity of 6,000 small rubber plantation owners in Sri Lanka.

The EU regulation, Ksapa CEO Farid Baddache said, will apply equally to the Brazilian beef and soy sectors—the main focus of deforestation, comprised mainly of farms of several hundred or even thousands of hectares—as to the natural rubber sector, where more than 85 percent of production is carried out on farms of less than 2 hectares.

And with challenging issues around how to pay for and allocate responsibilities to deliver compliance, he said, the situation could lead to small producers being excluded from the more profitable and environmentally responsible markets.

Baddache warned that this could result in "a two-tier agricultural production market: one that complies with EU requirements for sustainable markets, the other that will be 'for the rest of the world' without any impact on the reduction of deforestation and putting small producers at social, economic and environmental risk."

European Rubber Journal's full report is available in its January/February issue.