The European Union’s (EU) deforestation regulation (EUDR), for which compliance will become mandatory in December 2024 for larger companies and in June 2025 for smaller enterprises aims to ban imports of seven commodities, including cattle, cocoa, coffee, palm oil, rubber, soy and wood items, if they come from land that was deforested after December 31, 2020.
Importers in EU dealing in imports of the above commodities will have to provide "conclusive and verifiable information" mapping their supply chains, including geolocation data for where products were grown, to ensure products are compliant.
Companies trading rubber and rubber-based products on the EU market will need to change their business processes to comply with the EUDR.
The EU is a significant importer of rubber, importing 25% of global rubber imports.
Rubber is one of Malaysia's main agricultural commodities and the majority of natural rubber in the country is produced by pekebun kecil getah.
In 2021, smallholder rubber plantations in Malaysia amounted to around 1.05 million hectares of total planted areas.
How is the EUDR going to hurt pekebun kecil getah in Malaysia?
Compliance with the EUDR is already a challenge and costly for big companies, let alone for the pekebun kecil getah to learn and upload traceability data including GPS coordinates mapped against satellite photos of farms and forests.
As it is, the pekebun kecil getah is already facing low productivity - producing between 1,400kg and 1,430kg of natural rubber per hectare in a year - an ageing smallholder population and uneconomic farm sizes.
According to the Association of Bumiputera Rubber Entrepreneurs Malaysia (PUGBM), there are about 450,000 Malaysian families involved in the rubber sector.
Assuming each family consists of 5 people, this adds up to 2.25 million people who live off the commodity.
According to this news report, a group of 6 associations representing palm oil and rubber smallholders in Malaysia filed a petition to the European Union to protest against the EUDR preventing imports into the bloc of commodities linked to deforestation risks on 15 March 2023.
The pekebun kecil getah definitely will be affected as it is impossible for them to have the funds to invest in a traceability system.
Until and unless RISDA and other government agencies step in to help, it looks like the pekebun kecil getah has to just stop exporting their production to Europe.
Given the constraints that the pekebun kecil getah will face, shouldn’t RISDA get out ahead and actively work with other bodies like the Malaysia Rubber Council, the Plantation and Commodities Ministry (PCM) or UNDP to build a roadmap for the pekebun kecil getah to comply with the EUDR?
For example set up a national platform for sustainable natural rubber to help the country's 450,000 Malaysian families meet the impending traceability requirements instead of protesting against the new law.
The objective of the platform is to seek the active participation of different stakeholders in land use planning and monitoring, identify and further develop ecologically sound agricultural practices, provide technical support and promote the multi-stakeholder partnership between the Plantation and Commodities Ministry, pekebun kecil getah and international companies to leverage their respective roles and means, supports sustainability and deforestation-free commodity criteria and sustainable production models, which are crucial in meeting the EUDR.
Propose and offer solutions such as instead of individual farm plots for each pekebun kecil getah, maybe the platform adopts a `kawasan’ or daerah level approach to traceability.
As the Minister for Plantation and Commodities said in his speech at the International Rubber Conference 2023 in Feb 2023,
- the government will establish Malaysian Sustainable Natural Rubber (MSNR) guidelines to ensure that Malaysian raw rubber is certified as sustainable raw rubber sourced responsibly and complies with Malaysia’s current social and environmental laws taking into consideration the needs and challenges of rubber smallholders in Malaysia in complying with sustainability principles, and
- the government aims to synergise the relevant stakeholders including the pekebun kecil getah through flagship programmes such as the Rubber Production Incentives, the East Coast Latex Corridor and the National Rubber Transformation Programme.
Big companies like Michellin, well known for their tyres which by far are the largest users of natural rubber, have already announced officially that they will comply with the EUDR once it becomes mandatory.
RISDA has to play a more active and involved role to ensure that the pekebun kecil getah adopts and practices the traceability system and leaves no gap in adoption, unlike the gap that still remains in the adoption in the field for other technologies introduced over the years in the upstream and downstream sectors.
Forget about petitioning or mounting campaigns or sending protest notes to EU about the EUDR.
As shown in the fight over palm oil between Malaysia and Indonesia, EU will not budge nor accommodate any petition or pleading.
The producers and exporters either comply with their regulations or stop exporting to EU altogether.
There are no 2 ways about it.
Worse will be if the EU labels Malaysia as a high-risk country for deforestation in the regulation.
If such a designation is ascribed to this country, it would be highly demeaning to the Malaysian government.
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