As global climate goals intensify, the European Union has taken a bold stance with its Regulation on Deforestation-Free Products (EUDR), aiming to ensure that goods sold within its borders are not linked to deforestation or forest degradation. Commendable in purpose, the regulation has raised both hope and concern across commodity-producing regions, particularly among smallholder farmers.
For the estimated 500 million smallholder farmers across the globe, many of whom produce cocoa, coffee, palm oil, soy, and rubber, the EUDR presents a paradox: Will they be lifted by this regulation, or locked out of international markets altogether?
In this article, we explore the tension between environmental responsibility and economic inclusion, the practical barriers smallholders face, and how digital tools like Mergdata can make smallholder inclusion not only possible but powerful.
The Promise of the EUDR
The EUDR (EU Regulation 2023/1115), adopted in June 2023, aims to reduce the EU’s contribution to global deforestation and biodiversity loss. By requiring that imported and exported commodities be deforestation-free, legally produced, and fully traceable to origin, the regulation pushes for unprecedented transparency in global supply chains.
Businesses must now provide:
- Geolocation data of farms producing the commodity
- Evidence that no deforestation occurred after December 31, 2020
- Proof of legal compliance in the country of production
- Risk assessment and mitigation measures
- Chain-of-custody documentation
This shift from voluntary sustainability to mandatory due diligence represents a major regulatory evolution—but it also introduces major challenges, especially for regions dominated by smallholders.
The Reality for Smallholder Farmers
The global food system is built on the backs of smallholder farmers. In cocoa alone, smallholders produce over 80% of the global supply. In regions like West Africa, Southeast Asia, and Latin America, small-scale farming is both a way of life and an economic cornerstone.
Yet, the systems that many smallholders operate are informal, fragmented, and poorly digitized. Most do not have digital farm records, GPS mapping, or documentation of land tenure. Many work through cooperatives or local aggregators, with limited awareness of global compliance expectations.
Without targeted support, the EUDR could unintentionally:
- Exclude smallholders from European markets
- Increase inequality by favoring large, vertically integrated producers
- Shift sourcing away from vulnerable regions to avoid compliance risk
In short, a regulation intended to protect forests could end up hurting the people most dependent on them for survival.
A Balancing Act: Sustainability vs. Inclusion
The EU has acknowledged this risk. In the communication “EU Deforestation Regulation: an opportunity for smallholders”, the Commission outlines efforts to:
- Provide capacity-building support to producing countries
- Offer technical and financial assistance to ease compliance burdens
- Engage with local cooperatives, NGOs, and agribusinesses to enable inclusive traceability
The message is clear: the regulation must protect forests without pushing out the farmers who live in them.
But that’s easier said than done. Implementation timelines are tight—EUDR enforcement begins in late 2025 for large companies, and in mid-2026 for small enterprises. The gap between policy ambition and on-the-ground readiness remains wide.
What Inclusion Looks Like in Practice
To bridge that gap, smallholders need:
- Digital registration and farm mapping tools that work offline and in rural settings
- Satellite monitoring solutions to verify land history without hiring external auditors
- Communication in local languages, with culturally relevant training and support
- Data sharing frameworks that allow cooperatives, buyers, and authorities to collaborate
This is not just a matter of ethics—it’s a matter of operational necessity. Without smallholder participation, companies will struggle to meet sourcing volume, certification targets, and traceability expectations.
How Mergdata Enables Smallholder Inclusion at Scale
Mergdata is a supply chain intelligence platform built to make EUDR compliance possible for everyone, including smallholders. Our tools are designed with local realities and global requirements in mind.
Here’s how we help:
📍 Collect MD – Localized Farmer Mapping & Registration
Using mobile devices, field agents can easily register farmers, map plots via GPS, and record production data—even in offline settings. This makes it possible to build a digital profile for every farmer, regardless of location or literacy level.
🛰️ Terra MD – Satellite Monitoring + Traceability
Terra MD uses high-resolution satellite data to track forest cover changes, confirm land use status, and link production to verified plots. It’s built specifically to support EUDR traceability and carbon stock estimation.
💬 Darli AI – Multilingual Farmer Engagement
With support for 27+ local languages (and more in development), Darli AI allows farmers to ask questions, get advice, and receive alerts via voice, text, and chatbot. This is critical for farmer awareness, consent, and compliance.
📄 Compliance Reporting Tools
Mergdata enables cooperatives and agribusinesses to generate ready-to-submit documentation for EUDR audits, reducing manual reporting and improving accuracy.
Real-World Impact
So far, Mergdata has:
- Digitized over 2.2 million farmers
- Analyzed 707,000+ farm plots for deforestation risk
- Verified 93% EUDR compliance among those mapped
- Traced over 17,000 metric tonnes of commodities through verified systems
- Supported forest monitoring on 280 million+ acres across five countries
These numbers represent more than scale—they show that inclusive compliance is possible when the right tools are put in local hands.
From Compliance to Resilience
The EUDR doesn’t have to be an obstacle. With the right partnerships, it can help modernize agriculture, improve livelihoods, and accelerate the transition to sustainable trade.
But we must act fast—and act together.
The next 12–24 months will determine whether the EUDR becomes a blueprint for inclusive climate action or another barrier to opportunity.
📣 Call to Action: Let’s Make Compliance Work for Smallholders
Whether you’re a trader, cooperative, development partner, or policymaker, now is the time to invest in smallholder readiness.
Mergdata is ready to partner with you to build EUDR-compliant, smallholder-inclusive supply chains—powered by local knowledge and world-class tech.
