The anticipated impacts of the EUDR on deforestation, forest degradation and coffee producing households: Formulating a Theory of Change based on the cases of Cameroon and Ethiopia

Forests play a crucial role in removing greenhouse gases and supporting biodiversity, but deforestation continues at an alarming rate, partly driven by agricultural expansion. The new EU Regulation on Deforestation-free Products (EUDR) aims to curb deforestation by requiring due diligence for certain commodities, including coffee. This study focuses on how the EUDR affects smallholder coffee farmers in Cameroon and Ethiopia. In both these countries, farmers and sector stakeholders were interviewed to assess how they perceive the EUDR, and what the expected consequences of its adoption are. These findings were combined with a document review, and culminated into the development of a Theory of Change, identifying potential causal pathways resulting from the implementation of the EUDR. Key finding #1: The EUDR relies on critical assumptions that may not hold across contexts The Theory of Change demonstrates that the EUDR relies on three critical assumptions: adequate due diligence is conducted to identify (risk of) deforestation or forest degradation (or lack thereof), effective deforestation risk mitigation strategies are applied, and farmers (start to) apply EUDR compliant production practices. However, evidence suggests that these assumptions may not hold across contexts, potentially undermining the intended outcomes of the regulation. Furthermore, we found that the EUDR impact pathways do not address the underlying drivers of the agricultural expansion that causes deforestation. We recommended monitoring critical assumptions systematically to ensure the planned pathways are being realized, as well as the adoption of accompanying measures which could increase the likelihood of achieving the desired outcomes. These measures should be considered within a systemic approach that aligns with other relevant EU initiatives to enhance overall effectiveness. Key finding #2: Smallholder farmers could face negative implications of the EUDR Smallholder farmers may face greater challenges than currently anticipated by the EU in complying with the EUDR, particularly due to limited awareness and infrastructural gaps that hinder traceability, contrary to expectations that requirements for farmers are straightforward and low-cost. The lack of differentiation between traceable and non-traceable coffee streams in countries like Cameroon and Ethiopia further complicates smallholder access to the European market, with potential negative impacts on their market opportunities and income. Recommendations that emerged are to make it easier for farmers that do not contribute to deforestation to demonstrate this on paper. Furthermore, addressing some of the indirect drivers of deforestation (e.g. poverty, a lack of alternative income sources) may benefit smallholder and forest protection impact synergistically.