Small cocoa companies in Ivory Coast say they could go bankrupt due to the cost of complying with new European Union regulations targeting imports linked to deforestation.
The law, designed to curb the roughly 10% of global deforestation driven by EU consumption, requires companies importing commodities like cocoa, coffee, beef, and soy to prove their supply chains are not contributing to forest destruction or face steep penalties.
To meet the requirements, Ivory Coast is implementing a digital system for buying and selling cocoa to improve traceability.
But small cooperatives and local exporters worry they can’t keep up with large Western multinationals that have greater financial means and staffing to handle the extra burden. “Compliance with the regulation requires investments that we cannot make,” said the director of an Ivorian trading company who fears the business might collapse.
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According to two sources from Ivory Coast’s Coffee and Cocoa Council (CCC), about 900,000 out of the country’s one million cocoa farmers have already received their digital ID cards, which also function as bank cards.
Under the new model, farmers will be paid through mobile money services by exporters after cooperatives or buyers deliver the cocoa beans to ports. This move cuts out the traditional cash payments made through middlemen.
“With this card, the traceability of Ivorian cocoa is 100% guaranteed,” one CCC source told Reuters, noting that all farmer data will be stored online.
The second source added that the system, tested with a sample group of farmers, cooperatives, and exporters, will be rolled out nationwide and made mandatory starting October 1. While the EU has delayed implementation of the regulation to December 2025 following pushback from trade partners and industry leaders, small Ivorian cocoa businesses are still bracing for the impact.
The president of a cocoa export cooperative said multinational firms are preparing to spend at least 200 CFA francs (around $0.36) per kilogram to meet the EU’s standards, an expense cooperatives simply can’t afford.
Cocoa industry leaders argue that the regulation could wipe out vulnerable cooperatives and local exporters unless the Ivorian government steps in with support.
“We are not opposed to traceability and sustainability. What we are criticizing is that the EU only protects its own industry and citizens, not those of other countries, and this regulation will kill local businesses,” said the director of another export company. “If we don’t get help from the government, there won’t be any cooperatives or local exporters left in two years,” another cooperative director added. “We’ll all disappear.”
All company leaders spoke anonymously, fearing retaliation or pressure on their businesses.
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Image Credit: African Climate Wire
