BRUSSELS, BELGIUM — European feed and oilseed organizations say a deforestation regulation voted on by the European Parliament falls short of tackling the issue and could lead to supply chain shortages and price inflation in the EU.
COCERAL, FEDIOL and FEFAC said the regulation disincentivizes action against deforestation globally, particularly in high-risk areas. This is due to several factors, including: the requirement of traceability to plot, which is not feasible for many smallholders and risks causing their exclusion from supply chains; and the country benchmarking system, which will lead companies to source away from high-risk areas as part of their risk avoidance strategy.
The lack of alternatives to traceability to plot for soy and palm products in combination with some of the trade disruptive measures adopted by the European Parliament most likely will affect the availability of these commodities in the EU and therefore contribute to inflationary pressures on these commodities and the food and non-food products that contain them.
“Given that the European Commission, European Parliament, and Council have not sufficiently considered the practical challenges operators and their suppliers will face when it comes to the proposed traceability and chain of custody requirements, we urge all three institutions to work with supply chain actors to identify solutions to minimize all the foreseen negative impacts,” the groups said. “We also stress the need for pilot programs to test the implementation of the proposed requirements across relevant countries in order to identify appropriate solutions against the practical challenges we have previously highlighted.”