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EU Deforestation Rules Threaten 60% of Ethiopian Coffee Smallholders

BirrMetrics · 14 hours ago · Read the Full Story on BirrMetrics
EU Deforestation Rules Threaten 60% of Ethiopian Coffee Smallholders
AI SUMMARY

A study by ODI Global warns that new European Union deforestation regulations could exclude up to 60 percent of Ethiopian smallholder coffee farmers from European markets due to traceability gaps.

  • ODI Global published a study warning that up to 60 percent of Ethiopia's smallholder coffee farmers could face exclusion from European markets.
  • The market exclusion risk stems from difficulties meeting the European Union Deforestation Regulation (EUDR) requirements.
  • Traceability gaps affect up to 57 percent of Ethiopian coffee supply chains, with few producers holding required farm-level geolocation records.
  • Adverse market exclusion scenarios could reduce Ethiopia's gross domestic product by up to 0.5 percent.
  • The regulation is scheduled to begin applying to large and medium-sized operators on December 30, 2026.
  • The European Union purchases approximately 30 percent of Ethiopia's coffee exports.
  • The study was authored by Ermias Engida Legesse, Jodie Keane, Bernardo Arce Fernandez, and Yohannes Ayele, and released on October 16, 2026.
  • Principal obstacles facing producers include insufficient geolocation information, fragmented supply chains, and compliance costs.
  • Under the EUDR, imported coffee must be produced without causing deforestation after December 31, 2020, and require shipment linkage to specific growth plots.
  • Ethiopian coffee supply chains involve multiple stages of collection, processing, and trading through cooperatives, local collectors, and the Ethiopia Commodity Exchange.
  • More than 95 percent of national coffee output comes from approximately four million smallholders, many cultivating plots smaller than one hectare.
  • The coffee industry supports the livelihoods of nearly 20 million people directly and indirectly.
  • Ethiopia earned more than two billion US dollars from coffee exports during the 2024/25 fiscal year.
Read the Full Story on BirrMetrics
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