- Leader of WTO’s development arm says EUDR could ‘cut off’ small farmers
Executive director of the International Trade Centre Pamela Cooke Hamilton has told the Financial Times that the EU’s new trade rules on deforestation risk “cutting off” smaller suppliers.
She told the newspaper: “What the biggest producers may do is, not being able to do the traceability for these small farmers, simply cut them off.”
Cooke Hamilton’s bigger concern is that this results in a “vicious cycle” of trade restrictions and poverty.
“Once you have loss of market share, you have loss of income, then you will have lots of increased poverty, then increased deforestation because at the root of deforestation is poverty … We [risk] falling into the trap of reinforcing something that we’re trying to change.”
The comments from the ITC are significant; it is the multilateral agency responsible for trade and development projects under the auspices of the WTO and UNCTAD.
They also reflect an understanding among trade and aid practitioners that it’s the large companies — not small farmers — that are able to absorb the costs of new and complex regulations.
For palm oil, these came to a head almost a decade ago when Unilever attempted to implement full traceability in its palm supply chain — it had to cut 80 per cent of its smallholder suppliers as a result.
It also risks a full segregation in supply chains; there will be a temptation among some market participants to separate commodities bound for the EU and those bound for everywhere else. This is precisely what has happened with RSPO certification.
Read the full article here.