MUMBAI (Sept 28): Solidaridad Asia has called on the European Union (EU) to take a comprehensive approach in implementing the EU Deforestation Regulation (EUDR) that will primarily benefit smallholders.
Speaking at the second Sustainable Vegetable Oils Conference (SVOC) in Mumbai, Solidaridad managing director Dr Shatadru Chattopadhayay said it is crucial to set inclusivity data that would ensure that a specific percentage of palm oil imports to the EU come from smallholders in Malaysia and Indonesia.
Another measure is comprehensive support for smallholders, including pre-financing, to facilitate investment in sustainable farming practices, technical assistance to improve farming practices and a guaranteed market for carbon credits generated through sustainability efforts.
“EUDR risks marginalising smallholder farmers and undermining the livelihoods of millions of smallholders,” Chattopadhayay said, adding that they often depend on the crop not only for their income but also for their own food security.
“Palm oil plays a crucial role in addressing nutrition security for billions of less prosperous people mainly in Asia. It is an interesting crop for smallholders — more profitable than other crops... but in a volatile and challenging market, with rising input prices, income is precarious and sustainability challenges persist.
“Downstream food manufacturers, consumer goods companies and retailers generate 66% of the gross profits on embedded palm oil compared to almost nothing for the smallholders,” he explained.
Chattopadhayay said it is critical to align the national mandatory sustainability standards, particularly the Malaysian Sustainable Palm Oil Standard and the Indonesian Sustainable Palm Oil Standard with the EUDR. Aligning these standards ensures a consistent approach to sustainability across borders and simplifies compliance for palm oil producers, especially the smallholders.
This alignment not only streamlines regulatory processes, but also strengthens the effectiveness of the EUDR. It minimises the risk of palm oil being diverted to markets with lower sustainability standards and ensures that all palm oil entering the EU meets robust environmental and social criteria, he added.