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The Opportunity behind EUDR for Smallholders’ Palm Oil Plantations

Doc. InfoSAWIT
The Opportunity behind EUDR for Smallholders’ Palm Oil Plantations

InfoSAWIT, JAKARTA - It is believed that palm oil plantations would have no more deforestation issues. Of course, the solution in AgTech and Blockchain would play significant roles to encourage sustainability and fight deforestation.

Deforestation is one environmental issue that urges the world the most. Every year, million hectares of forests are vanished because of many factors, such as, illegal logging, agriculture, and development. Deforestation would negatively deliver impacts significantly to climate issues, natural conservation, and indigenous people.

European Union (EU) has published regulation to minimize deforestation. It is European Union Deforestation Regulation (EUDR) that obliges every consumer and producer in certain commodities supply chain to get due diligence and risk assessment and confirm that their products did not contribute to deforestation.

EUDR would significantly deliver impacts for smallholders’ palm oil plantations in Indonesia. Palm oil is one commodity that has something to do with deforestation the most and Indonesia is the biggest palm oil producer in the world. EUDR implements inspection system, penalty in phase based on the risks that the original country (produces the products) would get. Indonesia is taken as the high risk one and the smallholders in Indonesia should qualify every close term and condition in the regulation.

According to Jon Trask, the founder and CEO Dimitra Inc di Nasdaq, only 1% smallholders in Indonesia got sustainable certificate based on nowadays available regulation. it means, EUDR implementation would make smallholders in Indonesia not have market access in the continent. This would raise worry for the other smallholders in southern world including Indonesia. They thought the regulation would ignore every effort to balance natural conservation by protecting sources of living.

Besides, the regulation would raise unexpected consequences: potentially relocate the products that were produced by having deforestation to the markets (countries) where the regulations are not too close, such as, India and China. It would also raise worry about the effectiveness of EUDR to realize deforestation mitigation goals in the global level.


Take Advantage on AgTech and Blockchain

The solution on AgTech and Blockchain – base is ready to play the significant roles to encourage sustainability and fight deforestation in every palm oil plantation scale, starting from the smallholders to big corporates. The technology would have potential to significantly solve environmental challenges and would contribute for more sustainable future.

For instance, blockchain can be used to trace the material origins of palm oil and would help confirm that the products derived not from deforestation.

AgTech, on the other hand, can be usd to escalate agricultural productivity and minimize every environmental impact.

The sophisticated AgTech solution took advantages on artificial intelligence and satellite images to escalate sustainability and supply chain transparency. For instance, artificial intelligence (AI) can be used to develop model that would predict environmental damages because of palm oil plantations. Satellite images can be used to monitor area and forest condition and would help identify and prevent deforestation. Such technology would support sustainable practices, for instance, to escalate soil fertility, and reduce land erosion.


The Helps of Technology and Trainings

But smallholders’ plantations always have small scale and limited sources of data and they might be difficult to qualify the expensive and complex terms and conditions in EUDR. For instance, smallholders could not have access of precious agricultural technology or natural resources needed to track down their materials.

That is why it needs the help of technology and development to help them in qualifying EUDR terms and conditions. The government and non-government organizations should play their significant roles to deliver the helps.

For further information, please contact team of Dimitra and InfoSAWIT.