Traceability is a crucial part of the upcoming EUDR. To make sure that a commodity to be compliant with the regulation, sellers of an EUDR-covered commodity must be able to trace talked about commodities once more to their provide.
EUDR compliance in palm oil is, in step with the Roundtable on Sustainable Palm Oil (RSPO), significantly superior, as a result of it instructed FoodNavigator in a present interview.
Nonetheless, in Thailand, distinctive attributes of its present chain make traceability, and subsequently EUDR compliance, tougher than in numerous markets.
A smallholder-dominated market
In Thailand, 85% of palm oil is grown by smallholders, in step with the RSPO. The land inside the nation is allotted to those people who keep inside the area, pretty than big companies.
As a result of Thai authorities’s free-trade protection, in step with Trin Phongpetra, Authorities Committee of Thaksin Palm Group, Enterprise Assist Division and President of Federation of Thai Industries in Surat Thani province, processing mills could also be opened merely and thus rivals between the mills is acute. On this model, smallholders are free to advertise to any mills they want.
After implementation, this model lastly led to a system the place smallholders would contract expert harvesters to reap the palm, along with fruit collectors to collect it. On this technique, many of the palm cultivators actually do not work the land.
As a result of longer present chain, the palm is far much less up to date, and the extraction cost is lower. In Indonesia and Malaysia, in step with Phongpetra, the extraction cost is roughly 21-23%, whereas in Thailand it’s simply 18-19%.
How intercropping can defend smallholders
Palm oil is, like all commodities, sometimes on the mercy of fluctuating worldwide prices, as a consequence of shifting demand from prospects. For smallholders, this will likely current an obstacle to sustaining their income. Unpredictable local weather patterns as a consequence of native climate change can exacerbate this disadvantage. Intercropping can current a fallback risk, a failsafe in case points go improper.
In Thailand’s Surat Thani province, FoodNavigator spoke to grease palm smallholders who utilised intercropping. All via the farm we observed, smallholders develop pandan leaf, a tropical plant sometimes utilized in South East Asia for desserts. The crop simply is not eaten by bugs and in actuality repels them, making it a secure numerous provide of income for farmers, and will develop inside the shade, which implies it could be grown beneath palm bushes.
Pandan leaf is well-liked in Thailand, and is not exported nonetheless primarily purchased domestically. Thus, it is not on the mercy of worldwide fluctuating prices.
How does this impact EUDR compliance?
Little or no of Thailand’s palm goes to the EU, and the palm oil that does is often inside meals merchandise. Nonetheless, Thai palm that is exported there could also be a lot much less vulnerable to comply to the EUDR because of further superior present chain in Thailand.
It’s as a result of it’s miles tougher to keep up traceability information. As a result of the harvesters and fruit collectors shouldn’t tied to a specific plot of land, the palm that they promote to the crushing mill cannot be traced once more to a piece of land declared free of deforestation.
They should, Phongpetra instructed, be given devices which may allow them to judge the land of the cultivators which they’re harvesting on, and confirm whether or not or not the palm that they’re harvesting is deforestation-free.
