Cocoa, oil palm sectors on tenterhooks
Ghana’s tree crop sector, key among them the cocoa and oil palm industries, is anxious over an impending vote by the European Union (EU) parliament to postpone or validate its proposed implementation date for the crucial EU Deforestation Regulation (EUDR).
Per earlier proposals, the regulation was expected to come into force for most companies and organisations which trade with the EU bloc from December 30, 2024.
The European Parliament is preparing for a crucial vote next week on November 13 and 14, 2024. The decision will determine whether enforcement of the law will be postponed or begin as scheduled on December 30, 2024.
This regulation will critically apply to local companies and organisations placing relevant commodities or products on the EU market.
They will need to demonstrate that their products are deforestation-free, and not linked to forest degradation, nor illegal harvesting and trade.
The regulation will affect the cocoa, oil palm, cashew, coconut and coffee sectors, among others.
Ghana and the Ivory Coast are the world’s two largest producers of cocoa, accounting for over half of the global supply, currently at 65 percent – Ivory Coast (45 percent) and Ghana (20 percent).
Production of the cocoa commodity has been linked to heavy suspicions and allegations of deforestation by the EU.
While smallholder associations in Africa and Indonesia say they are supportive and prepared for the December 30 deadline – when the regulation is scheduled to go into force, others say they need extra time or increased government support.
A consensus to delay the regulation, when approved or agreed by the EU parliament, may grant another one-year grace period to traders and exporters – up to January 1, 2026.
Excitingly for Ghana, the EU maintains that the cocoa sector is much better prepared for the EUDR than other commodity sectors, since the country and Ivory Coast prioritised a national approach and have, from a long time ago, started investing heavily in farm traceability approaches.
However, agriculture sector stakeholders are apprehensive that issues of galamsey, which have thrived in the past few months, may dent Ghana’s quest to make a case when the regulation begins.
Other countries, including Honduras and others, according to reports, have maintained that there are millions of smallholders who are not even aware of the EUDR let alone prepared to comply.