By Christopher Burke
T he European Union Deforestation Regulation (EUDR) is poised to significantly impact Uganda’s cocoa sector.
As Uganda strives to strengthen cocoa exports, EUDR is introducing stringent requirements to ensure products entering EU market are deforestation-free.
Introduced to Uganda by the British in 1901, the cocoa sector peaked in the 1960s. Most cocoa is grown in Bundibugyo district with a substantial quantity grown in the DR Congo and sold in Uganda.
The majority of cocoa is grown by smallholder farmers. Approximately, 15,000 farming households rely on cocoa as a key source of income.
Gustav Gonget, the managing director and Founder at Equator Chocolate in Uganda, suggests the quality of Uganda’s cocoa, once fermented to specialty cocoa level, is recognised globally resulting in high demand.
Cocoa represents Uganda’s fourth-biggest commodity export after coffee, tea and fish.
Uganda’s cocoa exports reached $105.4m in the fiscal year 2020/21 with an export volume of 44,441 metric tonnes and dropped to $97.6m in 2021/22 and $93m in 2022/23 according to the Bank of Uganda. The drop is largely attributed to disease and ageing trees. Multiple challenges hinder the development of Uganda’s cocoa sector.
These include low productivity due to inadequate agricultural practices, limited access to quality inputs and lack of knowledge of modern techniques says Alastair Taylor, at the EU-funded Coffee and Cocoa Development Project (CoCoDEV) implemented by the Government through Uganda Coffee Development Authority (UCDA).
Maintaining the high-quality standards of Ugandan cocoa is essential to sustaining its reputation as a premium product.
A number of farmers cannot negotiate fair prices and financial constraints restrict investment to improve yields and crop quality.
The EUDR introduces additional challenges, ensuring commodities entering the EU do not contribute to deforestation or forest degradation.
From December 31, this year, companies exporting cocoa to the EU will require comprehensive due diligence, demonstrating their products are deforestation-free.
Carolina Reynoso Pieters, the senior director of Global Programmes at Cadasta Foundation, submits companies must also provide geographic coordinates for the origin of commodities, presenting challenges due to complex global supply chains.
Full compliance with the EUDR presents significant hurdles for Uganda’s cocoa sector.
There is no policy governing the cocoa sector, explained Pamela Anyoti Peronaci, the Food and Agriculture Organisation (FAO) technical advisor on climate resilient cocoa value chain development.
The policy vacuum causes inefficient resource allocation and inconsistent support to farmers and other stakeholders.
Without a dedicated cocoa policy, farmers and exporters lack the guidance and support necessary to implement sustainable practices and traceability measures.
The policy gap must be addressed to align Uganda’s cocoa sector with international standards and market demands.
FAO is starting the process to support the agriculture ministry with the development of a strategy and policy framework for the cocoa sector explained Peronaci.
Limited financial resources restrict the ability of farmers to invest in infrastructure and technology to meet the requirements of the EUDR’s.
Developing financial support mechanisms with government subsidies, access to capital and partnerships with financial institutions can bridge this gap and enable farmers to implement sustainable practices according to Richard Mwesigwa, the programme director at aBi Development in Uganda.
Strengthening market positions, through cooperatives, is another potential strategy.
This strategy has proven effective in other regions and can be replicated in Uganda. The regulation also necessitates robust supply chain transparency.
Businesses need to maintain transparency across their supply chains, including the provision of due diligence statements accessible to authorities and, to an extent, the public, Alastair explained.
The EU is currently supporting multiple initiatives, including CoCoDEV, aBi Development and the E-EAC Market Access Upgrade Programme.
These all support the cocoa and coffee sectors, and prepare stakeholders for the implementation of the EUDR asserts Sanne Willems at the EU Delegation in Uganda.
The path to realising the full potential of Uganda’s cocoa industry is fraught with challenges, but the opportunities are vast.
With appropriate policies and support, Uganda can capitalise on its natural advantages and establish itself as a key player in the global cocoa market, benefiting thousands of farmers and driving economic growth.
The writer is a Senior Advisor at WMC Africa
