Anti-deforestation rule leaves EU farmers worried about feeding livestock

Paris. A lack of detail on the implementation of new EU anti-deforestation rules has European farmers worried about shortages of the Brazilian soybeans they need to feed their cattle and pigs.

A new EU rule set to come into force at the start of 2025 will ban the import of beef, coffee, cocoa, palm oil, rubber, soybeans and wood that has contributed to deforestation.

But with details about certification still unclear, importers are worried about ensuring adequate soybean supplies used to make animal feed.

"There are currently no price quotes for soybeans for 2025" which prevents buyers from having an idea of what purchases for next year will cost, said David Saelens, who raises cattle in northern France and is the point man for animal nutrition at the Cooperation Agricole, a trade association that unites farmers cooperatives.

"This poses organisational problems for factories" making animal feed and creates "risk of supply shortages and higher prices," he added.

Andres Gomez Bueno, president of Unistock Spain, Madrid's arm of the European association of firms that store agricultural commodities at ports, said the measure had sparked "fear" among his members who are worried about the effect on prices for the coming year.

"In Europe, soybeans are not grown, imports can be paralysed, and this can greatly impact food production," he was quoted as saying recently by Spanish news agency EFE.

The problem for European importers is that it is still not clear how to certify imports are deforestation-free.

The result is that "the majority of importers, suppliers, have suspended quoting prices and their clients who make animal feed have only very limited and insufficient information at their disposal," said the French trade association for the animal feed industry.

90% soyabeans imported

While France has tried to boost its domestic production in recent years, it still imports more than 90 percent of the soybeans used in animal feed, mostly from Brazil, according to Cooperation Agricole.

Solteam, one of the leading soybean importers in France, is confident it will be able to comply with the new regulation but said the fact the platform to submit data isn't yet running is causing difficulties.

The EU data platform should go live in the final quarter of this year.

"Until then we're not quoting prices publicly on the French market beyond December 2024," said Solteam's chief executive, Laurent Houis.

Another major importer, the Louis-Dreyfus group, said it is working on data collection and documentation in order to be able to ensure the traceability of its imports but is waiting for the European Commission to detail how the new regulation will be implemented.

Firms which fail to respect the new regulations face fines of up to four percent of their sales or even being banned from the market.

Companies "don't want to take any risks. They want to know with certainty what documents will be taken into consideration," said Claude Soude, deputy director of the French Federation of Oilseed and Protein Crops.

Small producers punished?

Brazil's soybean industry says it is ready.

Traders "have been working full out on the issue, particularly on logistics, in order to ensure the needed traceability," said Azael Pizzolato Neto, head of the Brazilian association of Soybean growers in Sao Paulo state.

He said Brazil has strict laws against deforestation.

If a shortage of soybeans develops on the European market, it won't be due to "a lack of compliant goods" but from "European inefficiency".

The European Union is Brazil's second largest export market for soybeans, accounting for about eight percent of the total, far behind China at 71 percent.

Carolina Teodoro of a trade association representing 168,000 farmers in Parana state said they hope existing Brazilian environmental certification will be sufficient for the EU.

Brazil's government has also urged the EU to take into account its data and systems when determining its deforestation-free criteria.

The Brazilian national farm association has expressed concern that the EU regulation "punish small producers" who don't have the money to pay for satellite imagery to prove their products haven't contributed to deforestation.

The European Commission did not reply to requests from AFP for information on how the regulation will be applied.

In March it said it was providing technical and financial assistance to exporting nations to develop traceability systems.