Agriculture and food systems play a pivotal role in the economies of Latin America and the Caribbean (LAC), representing a substantial share of national GDP, providing employment for millions, and utilizing significant natural resources—particularly land, water, forests, and biodiversity. The importance of LAC extends beyond its borders; it stands as a key player in the global food and agricultural landscape. As a major net exporter of food and agricultural commodities, the region also generates ecosystem services with far-reaching effects worldwide (World Bank, 2020). As illustrated in the graph below, net agricultural exports from Latin America and the Caribbean have steadily increased over the past decade.
Net exports of agriculture products by region, 1992–2016
Source: World Bank, 2020
This region has a long-standing reputation for producing and exporting a diverse array of agricultural commodities, including avocado, coffee, soybeans, sugarcane, sugar, beef, and cocoa. It is often referred to as the "food supplier to the world" (World Bank, 2020). However, beneath these significant contributions lies a sobering reality: these remarkable achievements have been accompanied by substantial environmental and health costs.
Agriculture occupies more than one-third of the region's land area, consumes nearly three-quarters of its freshwater resources, and accounts for almost half of its greenhouse gas (GHG) emissions. Despite the rich agrobiodiversity that the region possesses, approximately 75 percent of the genetic diversity of its agricultural crops has been lost over the past century. This decline is largely attributable to the proliferation of monoculture practices and an over-reliance on a limited number of crops and varieties that depend heavily on fertilizers and pesticides (World Bank, 2020). Furthermore, the expansion of the agricultural frontier is a significant driver of deforestation in many areas, undermining the region’s forests and their ability to provide essential ecosystem services.
Understanding EUDR Compliance: The Key to Sustainable Growth in Latin America Agriculture
As the world intensifies its focus on environmental sustainability, the European Union has taken a decisive step with the European Union Deforestation Regulation (EUDR), published on June 29, 2023. Initially set to take effect on December 30, 2024 (with a later implementation date of June 30, 2025, for micro and small enterprises). As the initial implementation target approaches, on October 2, 2024, the European Commission introduced a game-changing proposal: to extend the EUDR timeline by a crucial year. If approved, this extension would give large companies until December 30, 2025, and smaller entities until June 30, 2026, to meet compliance.
This regulation is set to fundamentally reshape global agriculture by requiring businesses to ensure their products are deforestation-free and produced according to local laws. Affected commodities include cattle, cocoa, coffee, oil palm, rubber, soy, and wood, marking a transformative shift in supply chain accountability. Regardless of the potential delay, businesses must begin preparing now to establish the traceability required to demonstrate that their products are unlinked to deforestation—failing to do so could mean losing access to the EU market.
Gain valuable perspectives from our Head of Markets – AMERICAS, Silvan Ziegler, who shares insights on the future of sustainable agriculture, the critical role of collaboration, and the importance of digital innovation in navigating an increasingly regulated marketplace. In this interview, Silvan sheds light on Latin America’s complex agricultural landscape, examining the unique challenges faced by agribusinesses, smallholders, and cooperatives as they work toward meeting the EUDR’s demands for traceability and due diligence.
Driving EUDR Compliance in Latin America: Expert Perspectives from Head of Markets - AMERICAS, Silvan Ziegler
Q: Could you outline the key aspects of your role as Head of Markets Americas at Koltiva, Silvan? We’re interested in understanding both your overarching responsibilities and the specific activities that shape your day-to-day work.
Silvan Ziegler (SZ): Certainly. As Head of Markets Americas at Koltiva, my role centers on driving market expansion and establishing strategic business across the Americas to promote sustainable agricultural practices. I oversee market entry strategies that involve coordinating market expansion, adapting our solutions to meet clients' evolving needs, and ensuring seamless functionality while at the same time empowering smallholder producers through traceable and transparent supply chains. On a day-to-day basis, I work closely with America's region team and cross-functional teams to adapt our solutions to regional needs and engage directly with clients to deepen relationships and drive resilient global supply chains. I lead a dedicated team of 12 to support clients in implementing our digital solutions across 18 countries in various sectors, including cocoa, coffee, palm oil, rubber, and dairy.
Q: In the context of impending EUDR regulations, what is your assessment of the current challenges within LATAM's agricultural supply chains?
SZ: The agricultural supply chains in the LATAM region are currently grappling with notable challenges, particularly in terms of digitalization and technical development. Many smallholder producers, especially those operating in the "first mile," have yet to fully leverage the tools and opportunities available to them. Despite a range of public and private initiatives aimed at enhancing these supply chains, significant hurdles remain in managing the information flow among various suppliers. This complexity complicates efforts to achieve true traceability from the farm to the consumer, making it difficult to ensure transparency and accountability in the supply chain. Addressing these challenges will be crucial for improving efficiency and compliance in the face of impending EUDR regulations.
Q: What specific on-the-ground challenges do businesses, cooperatives, and SMEs face in aligning with these regulatory standards?
SZ: Despite advancements in farm mapping and polygon data collection, businesses, cooperatives, and SMEs in Latin America still face considerable challenges in aligning with EUDR standards. A key issue is the management of the extensive data necessary for due diligence, particularly regarding risk assessments, legality documentation, and supply chain traceability. Many organizations lack the technological infrastructure and expertise needed to digitize and centralize this data effectively. As a result, preparing for regulatory compliance and potential audits from EU authorities can become an overwhelming task, impeding their progress toward meeting these critical standards.
Q: How do you envision the EUDR influencing the future landscape of agribusiness and trade in the Americas, particularly regarding Latin America’s strategic position?
SZ: The EUDR represents the beginning of a broader regulatory trend aimed at enhancing sustainability within the agricultural sector. We can expect other markets to adopt similar measures, which will necessitate increased transparency regarding the origins of agricultural products and the implementation of stringent traceability protocols. Consequently, it is imperative for agribusinesses to invest in advanced digital information systems that facilitate compliance with these evolving regulations. Furthermore, the issue of deforestation will remain a critical concern on the global stage, particularly as the Amazon rainforest encompasses 55-60% of the world’s rainforests. This underscores the urgent need for sustainable practices in the region, positioning Latin America as a pivotal player in the global effort to address these challenges.
Q: As the EUDR reshapes global industry practices, what are the critical steps you recommend for LATAM businesses to secure compliance and remain at the forefront of competitiveness?
SZ: To effectively navigate the changes brought by the EUDR, businesses in LATAM must adopt a proactive stance in preparing for the new regulations to avoid being caught off guard. A crucial first step is investing in technology that facilitates the collection and management of comprehensive data necessary for compliance. Equally important, however, is fostering close collaboration with producers. This partnership is essential for helping them adopt sustainable practices and for addressing the existing technological and informational gaps that may hinder their progress.
As we consider the likelihood of the EUDR's effective date being extended to December 30, 2025, this timeframe presents a valuable opportunity for businesses to refine their strategies. Developing a robust supply chain approach that integrates effective digital systems will be key during this period. While this additional time may seem ample, achieving full traceability and onboarding suppliers will still demand considerable effort and dedication. Therefore, initiating these initiatives now will be vital for maintaining competitiveness in an evolving regulatory landscape and ensuring long-term success.
Q: Given the profound land stewardship of indigenous communities in many LATAM countries, how does Koltiva work alongside these populations to align EUDR compliance efforts with their rights and cultural heritage?
SZ: To ensure EUDR compliance while effectively engaging with producers in the field, we actively collaborate with smallholder producers, many of whom are part of indigenous communities in LATAM. Our approach integrates their rights and cultural heritage into our compliance strategies through several key initiatives:
Consultation and Collaboration: We prioritize the active involvement of indigenous communities in decision-making processes, valuing their knowledge, perspectives, and contributions.
Tailored Solutions: Our compliance efforts are specifically designed to align with the unique social and environmental contexts of indigenous lands, ensuring that regulatory requirements do not disrupt traditional ways of life.
Capacity Building: We provide training and resources to empower these communities, enabling them to meet sustainability standards while preserving their cultural heritage.
Q: In what ways does Koltiva add value for LATAM businesses focused on growth and EUDR compliance, and what tailored solutions enable them to meet these dual objectives?
SZ: With over 11 years of experience in sustainable agriculture and supply chain traceability across 61 countries globally, we are uniquely positioned to assist LATAM businesses in meeting the increasing demand for EUDR compliance solutions. We provide substantial value through our robust traceability technology platform, KoltiTrace MIS, which enables processors to achieve comprehensive Supply Chain Mapping and Risk Assessment, ensuring thorough producer compliance.
We conduct extensive data collection on product origins, including precise geolocation data, to guarantee that products are deforestation-free and compliant with local laws. We also perform detailed risk assessments that evaluate factors such as country risk levels and forest presence, enabling businesses to understand their exposure to compliance risks.
The KoltiTrace MIS platform simplifies the documentation of supply chain connections and offers expert field implementation support for businesses that may lack the necessary resources. It verifies supply chain links from plantations to processors and collaborates with local stakeholders—including dealers, agents, and collectors—to accurately register transactions from mapped producers.
Additionally, we analyze transactional data to identify both new and existing mapped producers within supply chains. Our dedicated Field Agents throughout the region provide training and oversight at collection centers, ensuring effective implementation, compliance, risk mitigation, and transparency.
To further support compliance, businesses must implement risk mitigation measures, such as conducting audits and providing assistance to suppliers. The EUDR regulations also require annual public reporting on due diligence systems and the maintenance of related documentation for a minimum of five years. By leveraging our expertise, we empower businesses to navigate these regulatory requirements efficiently, positioning them for success in a competitive market.
Learn how to achieve EUDR compliance directly from industry expert Silvan Ziegler in our upcoming BeyondTraceability Talks webinar, "Steering Latin American Businesses Toward EUDR Compliance." Register to gain critical insights and practical tools to help your organization meet EUDR requirements confidently. This is a valuable opportunity to gain practical strategies tailored to LATAM’s unique challenges and growth potential under EUDR. Don’t leave compliance to chance; take this step toward safeguarding your market position with essential knowledge and tools.
Resource:
Morris, M., Sebastian, A. R., Perego, V. M. E., Nash, J. D., Diaz-Bonilla, E., Pineiro, V., Laborde, D., Chambers, T. T., Prabhala, P., Arias, J., De Salvo, C. P., & Centurion, M. E. (2020). Future foodscapes: Re-imagining agriculture in Latin America and the Caribbean. World Bank. Retrieved from https://documents.worldbank.org/curated/en/942381591906970569/Future-Foodscapes-Re-imagining-Agriculture-in-Latin-America-and-the-Caribbean
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