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Indonesian palm oil smallholders and the EUDR: Impacts and ways forward

4 February 2025

Indonesian palm oil smallholders and the EUDR: Impacts and ways forward

After much upheaval, the EU Deforestation Regulation (EUDR) will now come into action at the end of 2025. As the focus turns once again to implementation, careful attention must be paid to the EUDR’s impact on smallholders.

Companies in the palm oil sector and others have raised concerns that the EUDR might exclude smallholders from the supply chain. Some smallholder organisations, however, see the EUDR as an opportunity.

So, what impact will the EUDR have on Indonesian palm oil smallholders?

Fern interviewed companies, NGO experts and Indonesian palm oil smallholders to understand how they are likely to be impacted and how best to support them.

Indonesian palm oil smallholders are unlikely to be heavily impacted by the EUDR as they already have very little access to the EU market, due to their struggle to meet private certification requirements. The main challenge is therefore not how to keep them in the EU market but how to support their access to it.

This briefing identifies EUDR support mechanisms that could increase smallholders’ access to and participation in the EU palm oil supply chain:

  • Increasing funds: The funds currently allocated by the EU and Member States through the Team Europe Initiative, including the Sustainable Agriculture for Forest Ecosystems (SAFE) project, are woefully insufficient to overcome the barriers smallholders face. Important actions include supporting independent smallholders with geolocation and traceability requirements.
  • Accessible funds and support: Special care should be taken to ensure a significant part of the funds go directly to smallholders or their support organisations.
  • Companies’ commitment: Companies could increase the number of smallholders in their supply chain through quotas or other voluntary measures and support them to legalise their tenure and user rights.

Read the briefing

Categories: Reports, EU Regulation on deforestation-free products, Indonesia

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