Keep Smallholders In or Cut Them Out? The EU Buyer's EUDR Decision

There is a commercially rational case for cutting smallholders out of your supply chain before 30 December 2026. Fewer suppliers means fewer plots to map, fewer data gaps to chase, and a cleaner due diligence statement. Large plantation operators and integrated estates are easier to onboard. The arithmetic is not wrong.

But the arithmetic is often incomplete. Before you act on it, it is worth being clear about what you would actually be giving up - and what happens to the production you walk away from.

The case for keeping smallholders in

Volume and origin. In cocoa, coffee, rubber and palm oil, smallholder production is not a marginal share of global supply - it is the supply. Pivoting to plantation-only sourcing in many origins is not a compliance strategy; it is a sourcing strategy that may not be executable at the volumes you need.

Price and differentiation. Origins with strong compliance infrastructure may strengthen their appeal among specialty buyers and premium importers. In the EUDR era, reliability and documentation could become nearly as important as cup quality. The buyer who has already mapped and verified a smallholder base holds a documented, differentiated origin - one that competitors who dropped those farmers cannot easily recover.

Customer commitments. Many EU buyers have public commitments to smallholder inclusion, living income, or responsible sourcing. Dropping farmers to simplify a compliance filing creates a different kind of reputational exposure.

The leakage effect. This is the argument that tends to get lost in compliance discussions. Research highlights a significant risk of market exclusion and leakage: about three-quarters of respondents in one study believed that stricter compliance requirements could push producers toward less regulated markets if they cannot access affordable and practical pathways to compliance. This could undermine both the environmental objectives of the EUDR and smallholder livelihoods. A buyer who drops a smallholder does not make that farmer's land deforestation-free - they simply remove the incentive for it to stay that way. A shift of deforestation-linked commodities from the EU to non-regulated markets could undermine the EUDR, while smallholder farmers could be sidelined to more easily meet the regulation's goals, worsening social problems, risking land-use change and even causing harm to ecosystems beyond forests.

The decision to exclude is not cost-free. It has volume consequences, origin consequences, and environmental consequences that sit outside your DDS.

---

What the EUDR does and does not require of a smallholder

This is the most important legal point in this article, and it is frequently misunderstood.

Producers and companies outside the EU have no direct EUDR obligations unless they themselves place products on the EU market. They may still be asked to provide information - such as where products were grown, harvested or raised - to help EU companies meet their requirements. But the legal obligation sits entirely with the EU operator placing the product on the market. The pressure reaching a smallholder in Ghana or Indonesia is contractual, transmitted by buyers, not a direct legal requirement of the regulation itself. (Source: European Commission Green Forum EUDR hub, section "How does the EUDR apply outside the EU?")

This matters for how you frame your data requests. You are asking a farmer to help you meet your legal obligation. That is a different relationship from one in which the farmer is independently required to comply. It has implications for who bears the cost, who owns the data, and what it is reasonable to ask.

Liability stays with the operator placing the product on the EU market. Delegating data collection to a cooperative or exporter does not delegate responsibility. If your aggregator collects plot coordinates on your behalf and those coordinates are wrong, the DDS is your problem. Equally, no certification scheme has been recognised under the EUDR. A co-op's Rainforest Alliance or Fairtrade status is a useful foundation for due diligence, but it does not transfer liability or replace the requirement for plot-level geolocation and deforestation-free verification.

---

The five real blockers - and what buyers can do

IISD research identifies land tenure, compliance costs, traceability across aggregation points, digital infrastructure, and limited technical capacity as the structural barriers constraining smallholders' ability to demonstrate EUDR compliance. (Source: IISD, Smallholders and the European Union Deforestation Regulation)

1. Land tenure and unclear boundaries

In major cocoa-producing countries like Ghana and Côte d'Ivoire, most land is held under customary tenure rather than formal titles - around 80% of land in Ghana is under customary ownership and largely undocumented, and in Côte d'Ivoire only about 4% of rural land is covered by a certificate or title. While farming on such land is often legal, most smallholders lack documentation to prove their land-use rights.

The practical relief: recent EU guidelines confirm that formal land title documents are not required under the EUDR, as long as national laws recognise customary or traditional arrangements. What you need is evidence that production was legal under the laws of the country of production - which in many jurisdictions means customary tenure is sufficient. Check what your origin's national law actually says before assuming a title deed is required.

2. Compliance costs

One Peruvian cacao cooperative estimated spending between $60,000 and $100,000 USD on EUDR adaptation alone. Peruvian coffee organisations report that new compliance systems have doubled their administrative costs. The Union of Ecuadorian Cocoa Farmers' Organisations calculated initial compliance costs of around $5,000 USD per member organisation. And what have buyers contributed? Most buyers have not offered meaningful co-financing.

If you want smallholders to remain in your supply chain, the cost question is unavoidable. Mapping campaigns, field agents, and data systems cost money. The buyer who absorbs none of that cost while demanding plot-level data is transferring a compliance burden they created onto producers who had no say in the regulation.

3. Traceability across aggregation points

Cooperatives must collect and consolidate plot-level data from individual members before passing it upstream. A single aggregated polygon for the co-op is not sufficient - plot-level data per member is required. A single mid-size coffee exporter may need GPS polygon data from 2,000 to 10,000 individual smallholder farmers per season. Without a structured field data collection programme, this volume of geolocation capture is operationally impossible to achieve manually before the December 2026 deadline.

The aggregation point - the wet mill, the buying station, the co-op warehouse - is where traceability most often breaks down. Buyers who work through aggregators need to understand what data those aggregators are actually capturing at intake, not just what they claim to hold.

4. Digital infrastructure

Many smallholders lack essential tools for EUDR compliance, including remote sensing, data analysis platforms, and even basic digital tools - with only 29% of the population in Sub-Saharan Africa having internet access. Millions of smallholder farmers across Ghana, India, Indonesia, and Colombia who produce coffee, cocoa, and rubber have never used a GPS device. They have hand-drawn maps, verbal land descriptions, and no digital plot records.

Offline-first field collection - where a trained agent walks the plot boundary with a GPS-enabled device and syncs data when connectivity is available - is the practical answer in most smallholder contexts. This is a buyer-funded or buyer-facilitated activity, not something a subsistence farmer can self-organise.

5. Technical capacity

Compliance barriers are largely structural, not simply a matter of awareness. Farmers who have never filed a regulatory document, in a language that is not their own, for a regulation they had no part in designing, cannot be expected to self-comply. Capacity building - through cooperatives, extension services, or buyer-funded field programmes - is a prerequisite, not an optional extra.

---

Mechanisms that make inclusion workable

Cooperative and aggregator-level plot mapping

The cooperative or aggregator is the natural unit for organising smallholder data collection. It already has farmer relationships, field staff, and (in many cases) some form of farmer registry. Strategies that work include deploying field teams with mapping equipment to capture polygons for smallholders, using offline mobile apps that sync data when connectivity is available, training lead farmers to collect coordinates for their communities, and leveraging cooperatives or aggregators as data collection hubs.

What this solves: the logistics of reaching thousands of dispersed farmers. What it does not solve: the cost, which still needs to be allocated somewhere. What does not change: liability stays with you, the EU operator.

Voluntary grouping in the Information System

The EUDR Information System, relaunched in June 2026 under Implementing Regulation (EU) 2026/1565 (in force 17 July 2026), supports voluntary grouping of due diligence statements. (Source: eudr.today) This allows an operator to reference a group of previously submitted statements rather than filing a fresh full DDS for every consignment from the same supply base. For buyers sourcing repeatedly from the same cooperative network, this reduces per-shipment administrative burden once the underlying plot data has been collected and verified.

What this solves: filing friction for repeat consignments. What it does not solve: the initial data collection effort.

The simplified declaration route

Under the 2026 simplification package, micro and small primary operators - those who grow or raise the relevant commodities themselves - may submit a one-time simplified declaration (per Annex III) instead of a full due diligence statement, with updates required only if material changes occur. (Source: eudr.today) This is a meaningful concession for smallholder supply chains: a farmer who qualifies as a micro or small primary operator does not need to file a fresh DDS for every harvest.

What this solves: per-consignment filing burden for qualifying producers. What it does not solve: the underlying geolocation and deforestation-free verification, which still needs to happen. And the EU operator receiving goods from that producer still needs to verify the simplified declaration identifier - liability does not transfer.

For the operational detail on how the simplified declaration works in practice, see our post on the 2026 simplification package.

Shared-cost mapping consortia

Collaboration reduces costs. Industry platforms, cooperatives, and regional initiatives can share the expense of satellite monitoring services and field verification campaigns. Your suppliers are likely selling to multiple buyers with similar EUDR obligations - pooling resources makes sense.

If you are one of five European roasters sourcing from the same cooperative in Ethiopia, there is no reason for each of you to commission a separate plot-mapping exercise. A shared dataset - with appropriate data governance - serves all five buyers and distributes the cost. Buyers requesting data in incompatible formats multiply administrative work for cooperatives; standardising what you ask for, and coordinating with other buyers in the same origin, directly reduces that burden.

Team Europe technical assistance

The Team Europe Initiative on Deforestation-free Value Chains, launched in December 2023 under the Global Gateway framework, is a joint effort of the European Commission with Member States including the Netherlands, Germany and France. It provides coordination, technical assistance and capacity building for partner governments and producers on traceability, geo-localisation and land-use mapping. Active workstreams include financial and incentive mechanisms for smallholders in Indonesia and Malaysia, and good practice on inclusive smallholder data governance in forest monitoring.

This is not a compliance shortcut - Team Europe assistance does not produce a DDS for you. But for buyers sourcing from origins where the initiative is active, it represents a source of co-investment in the traceability infrastructure your supply chain depends on. It is worth knowing what is available in your specific origins.

---

Data governance: whose polygons are these?

When a field agent walks a smallholder's plot boundary and uploads the coordinates to a buyer's system, something significant has happened: the precise location of that farmer's only productive asset is now held by a commercial counterparty in another continent.

Digitalisation is reshaping global supply chains, with regulations such as the EUDR increasingly relying on detailed farm-level data including geolocation and proof of legality. As these requirements expand, smallholder farmers are bearing a growing share of the burden of data collection, while protections around data governance, sharing, and privacy remain uneven.

Farmer-led data cooperatives and transparent national traceability systems are emerging as promising models. These ensure farmers retain control over their digital information and can leverage it for better pricing, technical support or market access. However, data is being extracted in some instances without farmers' meaningful consent or benefit.

The Team Europe Initiative has published good-practice guidance on inclusive smallholder data governance drawing on case studies from Colombia, Kenya, Viet Nam, Indonesia and Brazil. The core questions it raises are ones every buyer should be able to answer before deploying a mapping programme:

• Has the farmer given informed consent to the collection and use of their plot data?
• Who can access the data, and for what purposes beyond EUDR compliance?
• Can the farmer access their own data, correct it, or withdraw consent?
• Does the farmer receive any benefit from the data - for example, access to agronomic advice, better pricing, or land documentation they did not previously have?

These are not abstract ethics questions. They are the difference between a mapping programme that builds long-term supplier relationships and one that extracts data from people who had no real choice but to hand it over.

---

What to ask for, and what not to ask for

The EUDR sets a floor, not a ceiling. Asking for more than the regulation requires does not make your DDS stronger - it makes your supplier relationships harder and your data collection more expensive.

Ask for:

• Plot-level geolocation (a single GPS point for plots under 4 hectares; a polygon for plots of 4 hectares or more)
• Evidence that production was legal under the laws of the country of production - which in most jurisdictions does not require a formal land title
• Confirmation that the plot was not deforested after 31 December 2020 (this is verified against satellite data, not by the farmer)
• The commodity type and approximate production volume

Do not ask for:

• Formal land title deeds where customary tenure is legally recognised in the country of production
• Certification to a voluntary standard - no scheme is recognised under the EUDR, and demanding one adds cost without adding compliance value
• Data formats that are incompatible with what other buyers in the same origin are collecting - coordinate with peers to standardise requests
• Annual re-submission of data that has not materially changed

Our supplier data collection guide and free templates set out exactly what to request, in what format, with ready-to-send emails for different supplier types.

---

What is still moving - and what is not

Two developments are worth watching, but neither should change your planning assumptions.

The German proposal. Germany's Federal Ministry (BMLEH) submitted proposals to the Commission on 30 March 2026 that included collective regional reporting for small producers, lighter requirements for low-risk imports, and limiting checks and sanctions to the first placing on the market. These are proposals, not adopted law. The Commission has stated it will not reopen the Regulation. (Spokesperson Anna-Kaisa Itkonen, 27 April 2026. Source: eudr.today) Plan on the current text.

Country benchmarking. The country benchmarking system, published 22 May 2025, classifies approximately 140 countries as low-risk, around 50 as standard-risk (including Brazil, Indonesia and Malaysia), and four as high-risk (Belarus, Myanmar, North Korea and Russia). A first review is envisaged in 2026. A reclassification could reduce due diligence intensity for some origins - but it will not eliminate the plot-level geolocation requirement, and it is not guaranteed. Do not build a smallholder onboarding strategy that depends on your key origins moving to low-risk.

The Commission's position. The simplification package is done. The Information System is live. The Commission has been explicit that there will be no further delay. Treat the current text as the text you will be complying with.

---

The timeline is the buyer's problem, not the smallholder's

Large and medium operators must comply with the EUDR from 30 December 2026. Micro and small operators have until 30 June 2027. (Source: European Commission Green Forum EUDR hub)

The buyer's deadline arrives first. And the buyer's deadline is driven by the time it takes to collect, verify and upload plot data from every farm in scope - not by the date on the calendar. Companies using mobile-first digital platforms have completed GPS campaigns of 1,800 or more farmers in six weeks. Manual approaches have taken twelve months or more for comparable volumes.

If you are sourcing from a cooperative with 3,000 member farmers and you have not started mapping, the question is not whether you will be ready by December 2026 - it is how much of your supply base you will have to leave out because you ran out of time.

The operational how-to - what data to collect, in what format, and how to structure the request to your suppliers - is covered in our guides on collecting geolocation data from suppliers and government traceability systems. This post is about the strategic choice that precedes those operational questions. Make it deliberately, with the full picture in front of you.