what the ODR has exposed is how untraceable and obscure supply chains are. That's what it has exposed. Like it has been three years of this conversation and nobody has published deforestation rates in their supply chain, but only the traceability gaps that exist. Due to the success of the last time we ran this workshop, future proofing your coffee business 2026 and beyond is back again in February.
This three hour live workshop is designed for coffee business owners across the supply chain who want to plan properly for what's ahead, not guess, not react and not rely on hope. Together we'll work through a practical 12 month roadmap for your business, including pricing decisions, risk planning, campaign planning and a cash flow model that helps you stay profitable and adapt in an increasingly uncertain industry. This isn't a high level talk or a trends presentation. It's a working session for people who are serious about staying in the coffee industry long term and surviving this coffee crisis.
If you're running a coffee business anywhere in the supply chain and want more clarity and control going into 2026 and beyond and you missed the last sessions at the end of 2025, you can learn more and book tickets at mapofour.coffee or find direct links in the show notes. And if you're a Patreon backer, you'll receive the usual discount. Welcome to the Daily Coffee Pro by Mapofour friends. I'm your host Lee Safar and this is episode two of a five-part series where we are talking about coffee farms in a decade from now with Pedro Manga from Caravella Coffee.
In this episode, we're going to be talking about deforestation and EUDR. Before we do that, though, Pedro, I would like you to tell people what your qualifications are. Of course, I am a chemical engineer and a biologist. I'm in love with plants.
If you go to Instagram, you'll find me a spare little blanta. Links in the show notes. I have focused kind of my academic life into risk assessments and different methodologies to assist risks, primarily environmental risks. And I did my master's on a methodology to use biochar and compost to remediate soils that have been polluted with hydrocarbon.
And little I know where I knew back in 2014 when I was doing so that it was going to be biochar. This is a big, big topic on my deforestation as well. I worked for nine months in the Amazon rainforest doing assessments on the three inventories and forest inventories. I've worked with primates and their diet.
It all comes to place now with the UDR, with biochar. I feel now that I was straining for these for many, many years. Yeah, and Pedro didn't know guys that I was going to ask him that question and neither did I until we press record. But the reason I wanted you Pedro to say that is because everything that we're going to talk about in this episode and in the conversation about biochar in the next episode, I want people to understand that this is not just like something that you've read about.
You know, like, oh, like me, it's stuff that I've read about and stuff that I've had conversations with people about. No, no, no, no, no. I didn't try to be here 10 minutes ago, that's for sure. No, right.
You have a deep, deep understanding about this stuff. And so going into this conversation where, let's talk about refresh people, what UDR is and why the European Union is focusing on it and its relation to deforestation. We don't know anymore whether UDR is, but it's not. That's the truth.
That's the hard truth. But on 2022, we thought the UDR was these European regulation that was addressing deforestation issues globally and trying to mitigate deforestation rates in agronomic supply chains and was a directive from the EU Commission to restrict the products that the EU consumers, that the restrict products that were available to EU consumers. So increased raiseability and reduced deforestation kind of risk for the consumers in Europe. Nowadays, we don't know anymore what it is.
These are directives that should have been in place in 2024. We push them one year, and then we push them a second year. And it is generally, and usually these conversations come to October, but I wouldn't be shocked if they are pushed to 2028 or 2027 or whatever. Even though the UDR were built to assess the deforestation risks, what the UDR, not even being implemented, has exposed are not deforestation risks or deforestation rates.
Nobody talks about deforestation rates when they talk about UDR. What the UDR has exposed is how untraceable and obscure supply chains are. That's what it has exposed. Like, it has been three years of this conversation, and nobody has published deforestation rates in their supply chain.
But only the traceability gaps that exist. But surely, hold on there. Surely that if I'm understanding this correctly, there was something that happened that triggered EUDR. Surely, they had to have had a study.
And part of me is like, you're an idiot for even thinking that this is a viable question. But surely, somebody did a study that said, we have mass deforestation, we can prove that there's mass deforestation. These are the numbers of deforestation we can sound like such a fool right now, even saying this out of my mouth. And that is what triggered EUDR, but clearly not.
Oh, of course. Of course, I mean, the clearance of Christine's forest to expand the agronomic frontier is a fact. What I refer to is that EUDR should have ignited a conversation on how to reduce deforestation rates within supply chains. But that's not the conversation we are having.
We are having a conversation on how unfair they are on policy, on how they restrict the market. But nobody is talking about forests. And it has been for two, three years, and nobody has mentioned forests. We have mentioned the burden of producers, the cost of producers that we shouldn't mention because the regulations are not on producers.
And we have been complaining on this, but it is truly just how we have been exposed on how untraceable and obscure the supply chains are. And if I mainly, all these backlash on the UDR saying that it closes markets, I don't think producers, at least in Latin America, I cannot speak for other continents, but they will assume it's something similar. Producers in Latin America will not lose access to market because they deforest. They will lose access to market because their supply chain partner do not have the ability to trace their supply chains.
Not because they have the first. You are a producer, you are the producer, you haven't the first, but you sell coffee to an intermediary that sells coffee to a cooperative, that sells coffee to one coffee purchased buyer, that sells us to another, that sells us to another importer, that sells us to an intermediary in Europe, that sells us to a roaster. So that producer is not going to be able to sell coffee to Europe, not because he deforested, is because the supply chain partners do not have the ability to prove that he has not deforested or she has not deforested. So it's not a matter of deforestation.
No, it's a supply chain traceability. It's a supply chain traceability. That's the reason the gap, the problem here, is just that it was exposed through the deforestation regulation. What was the response from, what did you see on the ground about the response from, at Origin, towards EUDR across 2025?
You hear a lot, you hear a lot, and mostly you hear that UDR regulations are unfair, that they do not take into account the cost to the producer, and that they increase the cost on producers. It's mainly what you listen to. And a couple of things on that is that, yes, they were imposed up by the EU, and I think we spoke about these two years ago, but they were necessary. Like, planet, climate, we, as humans, we cannot wait for empathy to spark all over the place at the same time and take care of forests and take care of traceability.
Like, this has to be a top-bottom regulation. And there is also this information on the cost of it. The regulations are really clear on who has to pay for it, and who is being audited. Now, if those costs as everything in our supply chain are pushed towards the producer, is not because of the regulation, it's because of the supply chain.
And it's easier to put the burden on the producer and the producing communities than assume the responsibility. And that's what we are lucky. Like, there's a lack of accountability on it. So, yes, the framework is that cost of production and whatever they increase for producers, but that's not true.
What is true is that there has to be an investment of supply chain partners to make their supply chains traceable. And the more untraceable, and the longer the supply chains, but guess what? The more expensive it gets. It's as simple as that.
So we are in an industry with supply chains with eight, nine links between the gate of the farm and the probably more the gate of the roastery. And those are very expensive to align, those eight different links, and it's very expensive to trace. There is not because of the regulation, it's because how we build relationships with producers in origin countries. After you came on the podcast the last time, coffee farmer contacted me, and this was really quite telling.
He said that he really appreciated you being on the podcast, resonated with everything that you said. And then he said, listen, if the Europeans want us to stop defarasting, they should stop giving us a reason to deforestation. We cut down trees and you said it in the series. And he said, listen, when you're buying coffee cheap, I have to grow more coffee to cover the costs of living.
And so the only way that I can do that is to clean all land. And so you tell the Europeans, if they start paying us a fair price, we'll stop cutting down our forests. But they're causing deforestation by paying us nothing for the coffee. It's this really strange with negative feedback loop, right?
Of course, we are asking producers to prove in a sense, on land use decisions they took, in a situation that was not created by them. Yeah. That's basically what happens here. It's basically what happens there.
Just prove in a sense of decisions you made, of the decision we push you to make. And that's, I don't think that's fair. And I don't think that's fair. And, but again, the regulations are not asking producers to prove their innocence, is the supply chains they are asking.
The regulations are asking the operator that makes coffee available in Europe to prove their supply chains is deforestation risk. And they have pushed that burden to producers, to prove their innocence. But this is not about producers proving innocence. And again, nobody's talking about forests here.
Nobody. When you see companies struggling with UDR, they are not struggling with deforestation. And what they are improvising are traceability schemes to keep their market open, not to protect forests. And with regards to the connection between EUDR and tariffs, has that meant that the coffees that, for farmers who can't send their coffee to Europe, once EUDR starts to become a reality.
It's not a reality yet, is it? Like, has it gone into, when does it go into effect? Wasn't it like June this year? Or they still haven't decided?
No, they pushed it to 2027. Okay. So it's not. I thought it was 2027 for big companies and midway through...
That's what it was, that's what was proposed on September. But then in November, December, it was pushed one year for everybody. Yes, that's my understanding. So then, a different question.
All of the money that's been spent and the due diligence that's been done, to do traceability for all of these companies that have gone through the process. I'm sure Caravilla has spent a lot of money and a lot of effort into making sure that you can trace the supply chains and give that information to the buyers or the importer. In Europe, are you guys the importers? Also, you have to demonstrate anyway.
So I'm sure you guys have gone through a lot of effort to be able to demonstrate that. But now you don't have to hand that over to the government. What happens with all of that work? Look, Caravilla is different.
Yes, we have invested on refining the traceability systems that we had. It's not that we had to create the traceability framework for our coffee. Our coffee was traceable 100% before UDR was even thought about. What we have done is refining that traceability, adding some things on deforestation, partnering with satellite, partner and intelligence.
It's our partner in assessing deforestation. But it's not that we have put a lot of effort in changing the way we have relationships with producers to make them trace. I wouldn't say that we haven't done an effort. Our technical assistance team has been, you know.
On point. On point, walking the farms. We do not trace polygons, like most companies do through Google Maps or Google Earth. We walk the perimeters farms.
And that's unfair, I don't walk. Our technical assistance team walks the perimeters of the farms. They do not trace the polygons in Google Maps or in Google Earth. So we literally do the walk.
And for us, these are all investments. It's hard for roasters to see, but you know the, even though deforestation, the UDR has been pushed, we have roasters in Europe. They're asking for the coffee to be UDR compliant this year. And that's the beauty of cardiovascular supply chains.
That we are implementing it, even though the UDR, the U is not asking for it. I wouldn't say it's all the roasters, of course not. There's a handful of them, but it's enough to give you hope. The reason I ask you that question is because I really wanna make the point to people that doing good business shouldn't be forced by legislation and policy.
Doing good business should be a part of the way that you run your business, whether you're forced to or not. And going to the effort of being compliant for UDR isn't a waste of money or a waste of effort or a waste of anything. We need to do better as an industry. And this has invited us to the table, whether we have to hand in the paperwork or not.
It is something that we should be doing because our supply chains are in desperate threat. And if we don't do this, I'm not sure how long we're gonna have as a supply chain. I'm not sure how long our businesses are going to be able to do business with each other. I totally agree with you.
I totally agree with you. And again, it's not a matter of forest, but a matter of how we build relationships with our region and how our supply chains are built. And again, transparency, traceability might not be for everybody. The problem comes or might not be aligned to every business model in the government industry.
The problem comes with every business model in the coffee industry claims responsibility, claims, direct rates, claims. That's greenwashing, right. Because it's not wrong when a company says we have been doing damage. This is where we are.
This is where we wanna get. But at the moment, half of our supply chain is not what we want and half of it is what we wanna go. Shout out to Bob and Michelle and Fish. Yes.
Because, I mean, everyone was blown away by their series of podcasts. I was thinking about them. When I was saying that. I mean, right, you know, big B is one of, well, big island.
One big island in space. One big island in space. That's their sourcing company. And they were very transparent on the podcast.
Like they'd been in business for a long time. They made a lot of money out of the coffee industry. And then they realized like, we were doing more harm than we were doing good without purchasing practices, right? Exactly.
And I think the burden on the God comes with the claim. So if you don't claim responsibility, if you don't claim transparency, if you don't claim direct trade, then you shouldn't be worried about this. The problem comes when everybody is doing things perfectly. Well, the whole industry is, well, I'm quote, sustainable.
But then we get exposed in this manner, where we have to push two years in a row, a regulation that is asking you, where did you purchase your coffee? It's not that they're asking for, you know, it's just, where did you purchase your coffee? That it's simple. Simple, you should have a receipt of it.
And the consumer wants it now. More and more, the consumer wants to be able to purchase something and not feel bad about it. And so whether we're doing this in Europe or whether we're doing this in Australia or in the Middle East or wherever it is, the consumer, especially Gen Z and Gen A, these guys care about where things are coming from. And when they age into being responsible for grocery shopping and all of that in their own households, this is what they're starting to ask for.
So it's important for us to do this beyond legislation in my mind. Yeah. I agree, but consumers should also do the walk, especially in not only in coffee, but in all the agro products we consume. And that's the thing on UDR.
Like one of my critics to the UDR is that if it is aligned to the Sustainable Development Goals, number 12 stands for Sustainable Production and Consumption. But then the UDR addresses only sustainable production of the agro products, but not the consumption. And I assure you Lee, as you were saying, at Origin producers are pushed to defer us because of the price they are getting. And I could be certain that we could reduce more deforestation if, yes, we put legislations or directors like UDR to producers or to producing audience, but also if we put a regulation on a minimum price to pay for an espresso in Europe.
Because we're building all these frameworks to trace deforestation, but it's the same framework to trace the value. If you're not able to trace deforestation, it's because you're not able to trace how value flows through your supply chain. And those two should be coupled. There should be responsible production, but also responsible consumption and shouldn't be voluntary because sustainable production is mandatory.
So why consumption is voluntary? So I think there is a disconnection in there and yes, they should work beyond regulations, but regulations should address both sides. Because if producers are being kept underpaid, what consumers will get is deforestation free coffee. Deforestation free coffee, right?
Well, I don't want. Because systems will be built not to reduce deforestation, but to comply with the rule. We're not fixing the problem, we're just creating another band-aid. Another layer, yes, yes.
Yeah, yeah, speaking about layers, our next episode, folks, is about biochar. And I say layers because I learned about terra pretta when we did the biochar workshop. And so join us for the next episode where we're talking about biochar. This is gonna be fun.
Cause this is a man who actually knows what he's talking about when it comes to biochar. Please don't have a peanut butter, I have an amazing rest of your day. If you enjoyed this episode, consider supporting my before we'd our guests and advertisers on social media. Subscribe, hit the like button, leave a comment and share this episode with a friend.
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