Putting smallholder farmers at the heart of EUDR implementation

The European Union deforestation regulation (EUDR) comes into effect from the beginning of 2026 – a crucial step towards its goal of achieving deforestation-free supplies of agricultural commodities such as beef, soy, cocoa and palm oil. Companies trading commodities in the EU will need to know where they were produced to prove that they are not linked to deforestation or illegal practices.

The regulation is the cornerstone of the EU’s plan to reduce its role in driving deforestation. Research by Trase estimates that the EU is exposed to 190,500 hectares (ha) of recent deforestation on average every year from its direct imports of agricultural commodities – an area more than ten times the size of Brussels. Cocoa accounts for around a third of the EU’s deforestation exposure, most of which occurs in Côte d’Ivoire and Ghana, the leading producers.

While traceability is critical to help buyers and importing countries identify and manage supply chain risks, it also brings initial challenges. The EUDR requires companies to provide EU member state enforcement authorities with the geographical location of the plots of land where commodities were produced to prove there is no or negligible risk that they were grown on land deforested after the end of 2020.

In Côte d’Ivoire, there is the additional challenge that most cocoa is grown by smallholder farmers and brought to market through intermediary suppliers, making traceability and compliance with the EUDR more difficult. Trase data shows that around 60% cocoa from the Côte d’Ivoire is indirectly sourced or of unknown origin. Without the provision of adequate support for smallholder farmers, there is a significant risk that some could be excluded from supplying the EU, putting their livelihoods at risk.

The need for cooperation

The national traceability system currently under development in Côte d’Ivoire for cocoa will potentially facilitate the compliance of all farmers to the EUDR. Until it is fully operational, it is critical that companies have their own robust and credible traceability systems to ensure EUDR compliance and support smallholder farmers. It is also important for companies to collaborate with the government to support the development of the national traceability system as it is a more efficient solution in the long term. Companies should support their suppliers to transition from their private systems to the national system, provided it meets the necessary standards required to effectively limit and eliminate deforestation.

Companies can support smallholder farmers in other ways, helping to address the issues of poverty, illegal labour and deforestation in the cocoa supply chain. One example is Tony's Open Chain, the collaborative initiative started by Tony’s Chocolonely, whose cocoa-sourcing model operates according to five principles.

Tony’s Open Chain is committed to ensuring deforestation-free cocoa and has already aligned its cocoa supply chain practices with the requirements of the EUDR, while keeping its partner cooperative at the centre of its approach. This is enabled by the following best practices:

Efficient supply chain mapping: companies managing the downstream end of their supply chains, such as Tony’s Chocolonely, often share the same suppliers and can collaborate in pre-competitive ways to optimise efforts. Instead of each company having its own supply chain mapping effort that costs each company money and the cocoa farmers time, they can combine efforts. Tony’s Open Chain, comprising 20 companies dubbed ‘Mission Allies’, has implemented a joint effort to map their suppliers, centrally led by the partner cooperatives. Data ownership sits with their partner cooperatives for improved local decision-making and empowerment.

Fair compensation: smallholder cocoa farmers in Côte d’Ivoire often receive too little for their cocoa, and the resulting poverty leads to issues such as child labour. Tony’s Open Chain works directly with partner cooperatives who lead the implementation of the five sourcing principles and who are compensated for their efforts. This includes GPS mapping, which earns a cooperative management fee of about €47 per tonne based on the average fee offered across the sector. This is paid on top of a higher cocoa price and is solely meant for the partner cooperatives to be able to run activities guided by the five sourcing principles, such as environmental and operational traceability efforts.

Timely data availability and checks: Tony’s Open Chain actively supports all partner cooperatives to implement EUDR requirements. This includes annual audits, as well as making sure full datasets of GPS polygon mapping data are shared transparently with all relevant parties, Mission Allies and partner cooperatives alike, before the start of the season.

Targeted assessments: To prioritise smallholder farmer support, Tony’s Open Chain identifies the most pressing risk factors by monitoring farms that are located close to protected areas. It goes beyond EUDR requirements by monitoring deforestation not only on farms, but within a 500-metre radius to identify at-risk areas near protected zones. They also monitor farmer delivery quotas and conduct seasonal site visits, together with the partner cooperatives.

Training and farmer coaching: without support from companies and governments, smallholder farmers face the risk of being excluded from supply chains once EUDR starts being implemented. To address this risk, Tony’s Open Chain has implemented a programme that provides training and support for partner cooperatives to interpret risk assessments and set up alerts for monthly risk monitoring. Tony’s Open Chain is also working with partner cooperatives to develop a remediation plan for non-compliant farmers, allowing for re-entry into the supply chain once they have regained compliance. Coaching programmes in areas such as agroforestry are executed by the partner cooperatives and include meeting cocoa farmers twice annually to review farm development progress. Specialised tasks, such as high-branch pruning, are handled by labour brigades under cooperative supervision. For 2023–24, Tony’s farm development plans targeted the maintenance of 15–30 shade trees per hectare with 30% crown coverage, a minimum of six tree species per hectare, including 50% native species and free-shade tree seedlings and planting assistance. Having a wide variety of plant and tree species on farms invites a host of different birds, animals and insects to maintain a natural balance in the ecosystem and prevent pests and diseases from spreading.

Tony’s Open Chain provides a good example of how companies can work with each other and partner cooperatives towards deforestation-free supply chains. It shows that collaboration among companies, governments, and other stakeholders is essential to ensuring effective EUDR compliance while supporting smallholder farmers. By aligning efforts, the cocoa sector can create a more sustainable and efficient cocoa supply chain that benefits both people and the planet.

Find out more about Tony’s Open Chain and its Mission Allies