At the beginning of 2025, the agri-food industry will have to start implementing the deforestation regulation in practice, i.e. the regulation preventing deforestation and forest degradation around the world. Dr. Przemysław Tronina, country representative of USSEC, clearly indicates that we can expect an increase in the prices of soybean meal, and therefore of feed used in animal production.
The regulations limiting deforestation are to be applied in practice at the beginning of 2025. For importers of soybeans or soybean meal, this means the need to document the origin of goods imported to the EU, based on geolocation data. Time is passing and still little is known. For example, how data is to be collected, processed and verified. However, for traders, this means a huge amount of data that they will have to collect, document and store. The industry takes this seriously because the proposed penalties for failure to comply with the documentation obligation are severe.
What will this mean for the agricultural industry, certainly another increase in the costs of animal production. – In the short term, i.e. after 2025, when the regulation will actually start to be applied or should be applied, we can expect an increase in the prices of soybean meal, and therefore of feed used in animal production. In this way, the European Union wants to limit the acquisition of raw materials from areas subject to deforestation after December 31, 2020, which means that the history of raw materials, including processed ones such as soybean meal, will have to be traced back to the field. All this to prove whether, for example, the meals come from Brazil, Argentina or the United States and whether, by chance, the areas that were used for soy production were not deforested after that date – explains Dr. Tronina.
Is the European Union, including the Polish administration, prepared administratively?
– The level of preparation is low and multi-threaded. On the one hand, the government is working to actually appoint an appropriate authority in Poland that will supervise the implementation of the requirements of this regulation. On the other hand, the European Commission should provide a special IT system in which this information is input for products imported into the European Union. This data will be collected and it will be checked whether a given raw material actually came from areas subject to deforestation or not – says the expert.
Dr. Tronina emphasizes that the regulation does not apply only to importers. – Companies that are not small and medium-sized enterprises will be largely covered by the requirements of the regulation. The regulation does not apply to goods, as is often wrongly said, but only to entrepreneurs and what conditions must be met for such goods or products to be used in the European Union. The European Commission has no system, no risk assessment for these countries of origin at national level, no implementation guidelines. The administrative requirements for implementing these requirements arising from the regulation are highly advanced and quite administratively burdensome, including the need to trace the history of the raw material to a specific geolocation and check whether there has been deforestation there or not. So there are a number of challenges, both at the local administrative level, at the European level and at the companies themselves, to be able to implement it. And the penalties are significant, because the highest penalty provided for in the regulation cannot be less in a given country than 4% of the annual turnover, which in the feed and agricultural industry can sometimes mean the entire annual margin.
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