A new European Union regulation has sparked concerns that it could have a devastating impact on the millions of farmers in the world's largest cocoa-producing country - Ivory Coast who rely on the industry for their livelihood.

A new EU regulation demands proof that imported cocoa is not linked to deforestation
The country is introducing a digital sales system for farmer identification and traceability, aiming to comply with EU requirements by 2026.
Smallholder farmers in Ivory Coast face challenges in affording technologies and meeting administrative demands for compliance.

Ivory Coast, the largest cocoa producer globally and in Africa, exports nearly two-thirds of its output to the European Union and its chocolate industry.

But cocoa farming has come at a high environmental and social cost, contributing to widespread deforestation and remaining closely tied to child labour. According to a European Investment Bank report, between 2000 and 2019, Ivory Coast lost around 2.4 million hectares of forest to cocoa cultivation?an area roughly the size of Rwanda.

In response, the European Union has launched initiatives such as the Sustainable Cocoa Initiative and the Alliance for Sustainable Cocoa to address deforestation and child labour in the supply chain.

A key measure is a new EU regulation, set to take effect in 2026, that will require importers to prove their cocoa is not linked to forest loss. The regulation targets the roughly 10% of global deforestation driven by EU consumption.

These efforts place increased pressure on major producers like Ivory Coast and Ghana, which together account for 60% of global cocoa output, to improve industry oversight, protect forests, end child labour, and ensure fair incomes for farmers.

Though designed to promote sustainability, the policy has stirred deep anxiety among African producers who lack the technical and financial capacity to meet its rigorous demands.

These producers now face the risk of exclusion from European markets and severe financial penalties for failing to provide the required proof of compliance.

However, the burden of compliance remains steep. The demand for traceability, satellite monitoring, and strict documentation, while commendable from an environmental standpoint, poses a major challenge for the Ivory Coast?s cocoa sector, which is dominated by smallholders operating in a fragmented, largely informal supply chain.

Small farmers raise alarm as Ivory Coast initiates compliance

Ivory Coast has taken steps to comply with the European Union?s incoming deforestation regulation by introducing a digitalised sales and purchasing system aimed at facilitating traceability and verification.

However, many smallholder farmers and domestic exporters in the country say they cannot afford the required technology or meet the administrative burden imposed by the new rules.

According to two sources at the country?s Coffee and Cocoa Council (CCC) who spoke to Reuters, around 900,000 out of an estimated one million cocoa farmers have received digital ID cards, which will also serve as bank cards under the new system.

The system, which has already been tested with a sample group of farmers, cooperatives, and exporters, is scheduled to become mandatory starting October 1.

Under the new arrangement, farmers will be paid directly by exporters via mobile money platforms after their cocoa beans are delivered to ports, effectively bypassing the traditional network of middlemen and cash-based payments.

Despite this progress, industry insiders are raising concerns. A director of an Ivorian export company told Reuters that while the sector supports traceability and sustainability, the EU?s regulation appears to prioritise the protection of European industries and consumers at the expense of African businesses.

He warned that such policies could severely impact local exporters.

Another source said that multinational companies are preparing to spend at least 200 CFA francs ($0.36) per kilogram to comply with the regulation, an investment most small cooperatives cannot afford.

With the EU's implementation deadline fast approaching, pressure is mounting for international support, transitional funding, and a more inclusive framework that doesn?t leave African producers behind.

While large multinationals are already investing in compliance infrastructure to maintain market access, smaller domestic players risk being excluded.

This growing divide threatens not only the livelihoods of rural farmers but also the broader economies that rely on cocoa as a major export. (Business Insider Africa)

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