Technology as an Enabler for Smallholder Inclusion and European Union Deforestation Free Regulation (EUDR)

• Main Authors: Muthu, Uthaya Kumar, Unnithan, U.R., Santhanam, Prakash
• Format: Conference or Workshop Item
• Language: English
• Published: 2023
• Subjects: HF Commerce
• Online Access: https://repo.uum.edu.my/id/eprint/30627/1/8th%20ICSC%202023%20349-355.pdf; https://repo.uum.edu.my/id/eprint/30627/

Smallholder farmers, who contribute significantly to global agricultural production, face challenges in complying with the EUDR's regulation, potentially leading to their exclusion from the EU market and undermining the regulation's effectiveness in reducing deforestation. The regulation aims to impose deliberate measures that raise costs and create obstacles for Malaysia's palm oil sector, which encompasses over 450,000 smallholders. These outcomes would lead to an escalation in poverty rates, decreased household incomes, and adverse impacts on rural communities in Malaysia, contradicting the European Union's commitments as outlined in the United Nations Sustainable Development Goals (UN SDGs). Thus, technology is explored as a facilitator for smallholder inclusion and EUDR compliance, offering readily available solutions. The EU should support technology companies with domain expertise and allocate funds for the development of a free digital supply chain platform tailored to smallholders' needs, mapping the entire supply chain and ensuring EUDR compliance. This research further emphasises the significant role of smallholders in the palm oil industry and their ability to comply with EUDR regulations, crucial for achieving zero deforestation and promoting nature-positive outcomes. By incentivising nature-positive practices and investing in smallholder capacity building, a mutually beneficial scenario can be created for smallholders and the environment in the long term.