Bridging the compliance gap: Ensuring smallholder inclusion in Ethiopia’s coffee sector under the EUDR

Policy brief Firms, Trade and Sustainable Growth

This brief examines Ethiopia's preparedness for the European Union Deforestation Regulation (EUDR), highlighting significant gaps in farmers' awareness and capacity to meet its requirements. While voluntary sustainability certification improves awareness, it has a limited impact on farmers' ability to comply, particularly in forest and semi-forest coffee systems. The main barriers are structural, including land tenure, mapping challenges, and inadequate supporting infrastructure, which risk excluding vulnerable yet sustainable producers. The brief calls for coordinated investment and governance to build compliance capacity, support diverse farming systems, and ensure fair implementation.

With acknowledgements to the Ethiopian Coffee and Tea Authority; Southwest Ethiopia Region Bureau of Agriculture; Southwest Ethiopia Region Coffee, Tea and Spice Authority; NABU Ethiopia; and Cooperatives Agency for the Southwest Ethiopia Region; this brief identifies key considerations for Ethiopia regarding the European Union Deforestation Regulation (EUDR):

  • A significant awareness-capacity gap: While basic awareness of the EUDR is emerging, farmers’ technical and institutional capacity to meet its core requirements remains critically low.
  • Certification is a partial bridge: Participation in Voluntary Sustainability Standards (VSS) improves awareness but has a weaker and more selective effect on actual compliance capacity.
  • High risk of inequitable exclusion: Farmers in ecologically valuable forest and semi-forest coffee systems face the highest compliance barriers due to land tenure and mapping difficulties. Without intervention, the EUDR may inadvertently exclude the most vulnerable and sustainable producers.
  • Structural, not behavioural, constraints: The primary barrier is a lack of enabling infrastructure.

To prevent market disruption and achieve the EUDR’s environmental goals, a collaborative and enabling governance framework is needed. This requires shared investment from the Ethiopian government, EU policymakers, coffee buyers, and development partners to build compliance capacity, differentiate pathways for diverse farming systems, and ensure equitable cost-sharing.