Reforestation for all nations: EU’s new law could lack scope to incentivize regenerative agriculture

15 Jun 2023 --- The EU’s incoming law to combat deforestation could fail to achieve the global impacts regulators expect unless the UN delivers a complementary framework to support it. Industry insiders warn that the European transparency rules could simply shift environmentally damaging activities from monitored to unmonitored regions if demand for forest-based products persists. 

While the regulation compels companies to improve their supply chain ethics through “due diligence,” its positive impacts will be limited without more stringent UN intervention to protect nature and support human rights.

“The EU’s law poses a risk of ‘leakage,’ which means that if demand for forest land remains the same, no real reduction in deforestation will occur, as deforestation activities will move to less monitored regions,” João Brites, director of growth and innovation at HowGood, tells Food Ingredients First.

“Also, the law only considers land cleared after 2021, by which time the world had already lost one-third of its forests, mostly to grazing land. We can only be satisfied when we start regenerating the forests we’ve lost.”

In April, multinational businesses in cocoa, coffee, palm oil, soya and other affected commodities welcomed the European Parliament’s decision to adopt the law. But smallholder farmers were left fearing exclusion from international supply chains due to the law’s technological demands.

Technology exclusions?
Carbon solutions provider ReSeed expects that the new rules requiring farms to be mapped by GPS coordinates will financially burden small-scale farmers, particularly in poorer parts of the world.

“Countries like Brazil and the Democratic Republic of the Congo depend on smallholder farmers for food security. Their potential exclusion from critical supply chains could be devastating and steer businesses to large monocrop farms instead of reinforcing regenerative agriculture,” Vasco van Roosmalen, CEO and co-founder of ReSeed, tells Food Ingredients First.Regeneration required: The world has reportedly already lost one-third of its forests, meaning the protection of remaining forests is inadequate.

“But both companies and smallholder farmers can meet the new requirements in a cost-effective way and finance increased resiliency and yield by engaging with climate finance to map and recognize their ecosystem services in a transparent way.”

For Brites – a small, non-commercial farmer in Brazil – the new GPS mapping rules are not overly concerning due to the free availability of new technologies.

“The evolution of remote sensing technologies makes it possible and cost-efficient to track land use change over time based on geographical coordinates. As long as remote sensing technologies are widely available and free to use, this seems like an exciting opportunity,” he says.

HowGood – a SaaS platform that helps food and agricultural companies measure, improve and report their sustainability impact – is one such tool that enables companies to track deforestation trends based on geospatial data.

Remote sensing relief
Satellite-based solutions are increasingly popular within agriculture as farmers battle to increase productivity amid surging energy and fertilizer costs. Remote sensing technologies analyze space photos of Earth and provide data that can be analyzed to increase yields, optimize field management and support precision agriculture.

“Farmers have been adopting digital tools to improve their work for almost a decade, so they’re no longer game-changers. But satellite-based solutions stand out for not requiring their users to perform any extra tasks,” Brijesh Thoppil, strategic partnerships lead at EOS Data Analytics (EOSDA), tells Food Ingredients First.

“What matters most is the quality and accuracy of the analytics. Agricultural cooperatives must be sure they can rely on the insights revealing how to boost soil fertility and address crop threats.”

“Agro-cooperatives can take advantage of EOSDA solutions to mitigate virtually all market risks. By enabling precision agriculture methods with satellite data, they can use less fertilizer and seeds, cut costs on energy and fuel and keep their yields high by preparing their lands for climate changes.”

EOSDA Crop Monitoring is an online satellite-based precision agriculture platform that empowers producers with remote farm management.How EOSDA’s technology monitors farms from space (Image credit: EOSDA).

Democratic due diligence
While industry leaders generally agree that the EU law’s mandatory due diligence rules help develop a level playing field for traders and operators, supply chain collaboration and financial support for smaller farmers will ultimately determine the regulation’s success.

For Vasco, it is vital that the costs of increased due diligence are properly accounted for throughout the supply chain and do not unduly burden any one actor. ReSeed’s tools can help companies and smallholder farmers access climate financing to offset the new costs.

“These cost-savings had not been possible before as the available carbon offset tools were not developed for smallholder agricultural farmers,” he explains.

“But with these new tools, there is no reason not to apply appropriate due diligence and ensure that farmers within supply chains can continue to provide critical ecosystem services while identifying and correcting areas of concern.”

The challenge now is to apply carbon offsetting tools at a larger scale to establish sustainable and resilient food systems.Before and after: Brites has cultivated a small agroforestry coffee system in Brazil that includes over 50 types of trees, aromatic plants, ladybugs and stingless native bees.

Data-driven insights
Meanwhile, R&D teams are increasingly playing a positive role in combating deforestation by using ingredient data to make smarter sourcing decisions, comply with ESG filings and avoid greenwashing claims.

“R&D teams are realizing that they hold one of the most important roles in helping companies improve their social and environmental impact. After all, while the R&D stage accounts for only 5% of the cost, it influences 80% of a product’s resource footprint,” says Brites.

“As these teams become more aware of the unique role they play, they start experimenting with creating products with new ingredients, sourced from different origins, with higher standards, agricultural practices and industrial processes.”

“But these advancements can only happen if R&D teams have access to data at Gate Zero of the Innovation Process. That is why platforms like HowGood are becoming indispensable to R&D teams.”

A new field of research has discovered early evidence that human and planetary health are inextricably linked. Notably, a recent study found that food grown using regenerative agriculture practices has higher nutritional content.

By Joshua Poole