Small-scale farmers who underpin Thailand’s lucrative natural rubber industry are under pressure to prepare for the EU Deforestation Regulation (EUDR), due to take effect at the end of the year.
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Workers unload and weigh lump rubber at a collection center in Krabi province. The raw rubber will be combined with other deliveries and sent on to a processing factory. Image by Carolyn Cowan/Mongabay.
Beneath a humid canopy of rubber trees, Sathit Phromraksa pauses to inspect a coagulated ball of rubber in a palm-sized bowl fastened to a trunk. Last night, he and his wife worked their way through the plantation, carefully carving a line in the bark of each tree to stimulate the flow of milky latex. With a total 500 trees to tap in their 1.6-hectare (4-acre) plantation, their work took them from midnight to 3:30 a.m.
“I inherited this rubber farm from my father,” says 59-year-old Sathit, a lifelong resident of Namgaan subdistrict in Thailand’s Krabi province. “Back then, my family used a lot of chemicals to control weeds and pests, but now, we follow organic practices.”
Sathit is one of roughly 1.7 million smallholders who produce 90% of Thailand’s natural rubber supply across millions of individual plantations, most of them no bigger than his. For many, staying profitable is a constant challenge amid fluctuating market prices, crop diseases and climate change.
Now, the EU Deforestation Regulation (EUDR) is poised to add to the pressures facing small-scale producers like Sathit. Under the law, set to take effect in January 2027, only suppliers who can prove their land wasn’t cleared after Dec. 31, 2020, will be allowed to continue selling rubber to EU markets.
As the world’s leading natural rubber producer, the economic implications for Thailand are significant. While the bulk of its exports go to China and Malaysia, the value of Thai rubber entering the EU increased by roughly 65% between 2019 and 2024, according to the World Integrated Trade Solution database. Meanwhile, Thailand’s rubber industry supports roughly one-quarter of domestic households engaged in agriculture.
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Sathit Phromraksa in his family’s rubber plantation in Krabi province in Thailand. Image by Carolyn Cowan/Mongabay.
The new rules have been broadly welcomed as a vital step to curb deforestation and reduce the footprint of EU consumption on forests. However, the new law presents significant challenges for both traders and producers, particularly the requirement that companies verify their products as deforestation-free by tracing their products back along entire supply chains to the farm plots where they were grown.
Thailand’s rubber supply chain is highly fragmented. Millions of smallholder farmers supply thousands of intermediaries, who in turn channel raw rubber to more than 200 processing factories before goods are exported to international markets like the EU.
Within the existing system, traders and middlemen commonly mix rubber batches without requesting origin or legality documentation from producers. Combined rubber from multiple different sources is then sold to processors who don’t typically need to trace the origins of shipments. Therefore, producers, traders and processors will have to update their practices if they wish to continue supplying EU markets.
The burden of change is particularly heavy on smallholder producers. From precise digital mapping of farm plots to proving legal land tenure and evidence of business practices that respect labor and human rights, the new rules demand skills and technologies that are beyond the means of many farmers.
Experts warn that without technical or financial support, the EUDR could leave millions of small-scale producers unable to comply, potentially shutting them out of European markets in favor of bigger producers who can more easily adapt. With the industry so heavily dependent on small-scale producers, both government and private-sector groups are pitching in.
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A sea of rubber plantations and oil palm closely surrounds ecologically and geologically significant limestone karst forests in Krabi province. Image by Carolyn Cowan/Mongabay.
Private sector steps in
Rubber ranks high on the global list of commodities most responsible for forest loss, behind beef, soy and palm oil. The industry has been responsible for 4 million hectares (10 million acres) of deforestation across Southeast Asia since 1993, an area roughly the size of Switzerland. In Thailand, forest conversion to rubber peaked in the 1990s, driven by government incentives that established the commodity among the country’s top five agricultural exports.
While regulation delivered through the Rubber Authority of Thailand (RAOT) has slowed rubber-linked deforestation in most production areas, climate warming is creating increasingly favorable conditions for growing rubber trees (Hevea brasiliensis) in the north and northeast, raising concerns that new forest areas could be opened up for cultivation.
With the EUDR implementation date approaching, RAOT is leading the georeferencing of farm plots in Thailand. With millions of parcels of land contributing to the country’s rubber output, it’s a formidable challenge and a real-world illustration of what EUDR compliance looks like on the ground.
The agency has so far mapped more than 3.1 million hectares (about 7.7 million acres), or roughly 79% of the country’s total rubber production area, according to a 2024 report published by RAOT in partnership with the European Forest Institute. RAOT is also exploring the development of a rubber traceability system modeled on a producer self-declaration process currently operated in Thailand’s timber sector.
Private-sector companies wishing to maintain ties with high-value EU markets are also joining in the efforts to support producers. Agriac, an intermediary firm sourcing natural rubber from smallholder farmers across 19 Thai provinces, already operates a traceability system designed to meet the standards of the Forest Stewardship Council’s (FSC) voluntary sustainability scheme, which the firm claims is EUDR-ready.
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Latex is tapped daily, usually at night, by farmers who make a narrow cut in the bark to stimulate the flow of latex, which is collected in a small bowl. Image by Carolyn Cowan/Mongabay.
As an intermediary, or “middleman” firm in the rubber supply chain, Agriac oversees the transfer of raw rubber from farm plots to processing factories, where it’s turned into concentrated latex and industrial-grade sheeting ready for manufacturing.
Their traceability platform, named Traztru, is based on software developed in-house. Farmers enrolled in the system have their farm plots georeferenced and mapped by Agriac field staff, and the platform maintains traceable records of land title deeds and farm operations that comply with FSC standards.
Staff at rubber collection points log the details of each batch of rubber delivered by registered farmers into the Traztru system, and the information is forwarded with each consolidated consignment of rubber to processing factories. Agriac is now partnering with factories in Surat Thani, Narathiwat, Yala and Songkhla provinces to standardize the use of the platform further along the supply chain.
“The traceability is being done forward,” says Maiprae Loyen, the company’s managing director. She says the digital system enables users to view details about shipments, including the identity of producers, their legal rights to use plots of land and the geographic coordinates of the land.
Agriac works exclusively with smallholders, most of whom are registered with cooperatives, Maiprae says. This includes 9,665 smallholders who meet FSC certification standards. Working with collection centers organized under cooperatives helps ensure strict separation of compliant and noncompliance rubber, she notes. This ensures processing factories requesting sustainable produce receive uncontaminated supplies.
It also brings individual farmers together to fulfill large orders from overseas buyers, making them competitive with large-scale agribusinesses. “As sustainable markets have grown, it’s only the big guys who have been able to profit,” Maiprae says. “We want to change that.” Agriac’s current end buyers include major firms operating in Europe, such as tire manufacturer Pirelli, sports retailers Decathlon and Adidas, and industrial tape firm 3M.
From certified rubber to EUDR compliance
Sathit is one of the farmers registered with Agriac through his local cooperative. In return for meeting FSC standards on environmental and labor practices, he receives 1.5-3 Thai baht (about $0.05-$0.10) per kilogram (2.2 pounds) above market price for his rubber. The premium price is less prone to market fluctuations, he says, making a “big difference” to household earnings. The extra earnings can pay for the cost of fuel to transport intercropped vegetables to market, for instance, further increasing his income.
Sathit says he’s confident his farm will comply with the EUDR when it comes into force. However, he’s concerned for his neighbors, many of whom haven’t adapted to sustainability trends and will likely be left behind.
“Only 10% of farmers around here join in the cooperative practices,” Sathit says, noting the training offered by his local cooperative in partnership with Agriac, which has helped him adopt more environmentally-friendly approaches, such as the use of biofertilizers and weeding machinery in place of harmful chemicals. “Most are still doubtful, they’re not open to learning new ways of doing things.”
Maiprae views the emergence of the EUDR as part of a broader global shift in demand for more sustainable and ethical products. She says skepticism in the farming community indicates a need for better outreach and support on the part of RAOT to raise awareness about changing market expectations.
Raising awareness of the EUDR among such a large farming community is tricky, however. Farmer training is usually organized through cooperatives. While there are 725 rubber cooperatives across Thailand, with roughly 122,600 members, this is a fraction of the total 1.7 million rubber smallholder community.
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Lump rubber, a raw material used to manufacture tires, dries in a collection center. It will soon be transported to a factory for further processing and export. Image by Carolyn Cowan/Mongabay.
Supply chain ‘revolution’
The scale of the supply chain overhaul required to effectively implement the EUDR is nothing short of a “revolution,” according to Stefano Savi, director of the Global Platform for Sustainable Natural Rubber (GPSNR), an industry association focused on developing a sustainable rubber supply chain. “Five years ago, supply chain traceability in natural rubber was considered impossible due to the fragmented nature of the industry.”
One of the major remaining challenges in Thailand is land tenure. Roughly 20% of Thailand’s rubber-producing smallholders lack formal documentation to prove the legality of their rubber plantations. Rather, land use is often managed through informal agreements with government agencies, particularly in forest frontiers that are more likely to flag up as deforestation risk areas under the EU rules. While RAOT’s geolocation mapping of rubber plots encompasses many of these areas, farmers lacking formal land titles will be required to verify their legal status with the Agricultural Land Reform Office before they can place their products on the EU market.
According to Savi, efforts must extend beyond engaging with farmers already working under cooperatives or with secure land tenure. He predicts the industry is likely to see what he terms a “compliance plateau” as the EUDR comes into effect, as farmers already producing to EUDR standards are included within the system, but those who are not able to comply haven’t yet been engaged.
Pushing beyond the compliance plateau to reach more farmers will require “collective responsibility” across the entire supply chain, he says, from farmers, processors and manufacturers to end-users, civil society and governments. “Doing the work to bring them up to speed is the real cost” of the new rules, he says.
While the EUDR’s focus on tracing deforestation risk and process on traceability systems is commendable, the industry could show even more ambition, Savi says.
GPSNR’s shared investment mechanism, for instance, allows its members to contribute financially on a per-ton basis to a fund that supports projects with smallholders, such as trialing local mobile phone-based traceability solutions and training farmers in agroforestry, a crop diversification approach shown to enhance air, water and soil quality while sequestering carbon and providing habitats for a range of pollinators and wildlife.
Improved traceability also means corporate buyers can now pinpoint weak areas in their supply chains where they can direct funding to meaningfully work with smallholders to boost their livelihoods, health and practices. “That’s really the work that makes a difference,” Savi says. “That’s when you go on the ground and fix stuff.”
For Maiprae, the new regulations are also a chance to increase transparency in what has historically been an opaque industry where each part of the supply chain looks after its own interests. She would like to see corporate buyers open up about their pricing models, which she notes are often “cost-driven” and rarely match their publicly disclosed sustainability values.
Pricing structures that truly account for the costs of sustainability could generate more cash flow through the supply chain to support better farming practices and reward producers for their efforts, Maiprae says. This could prove crucial, given the EUDR imposes heavy up-front compliance costs for producers, without offering them any price premium.
Agriac is expanding its operations into oil palm, a crop many smallholders are turning to amid low rubber profitability. With rubber and oil palm the dominant land uses across much of southern Thailand, the firm is working with conservation partners to learn how to encourage more biodiversity-friendly production approaches on plantations in buffer zones around protected areas. The ultimate aim of this is to create safe and connected wildlife corridors through what is currently intensely developed farmland.
There is still a long way to go for the rubber industry to transform the entire supply chain in time for the EUDR’s implementation at the end of 2026. But for farmers like Sathit and his wife, the nightly tapping rounds continue. Like millions of smallholders across Thailand, their trees are in the ground and they want to sell their product.
“Farmers are the most vulnerable people, and nobody protects them,” Maiprae says. “That’s why we try to be one of the entities who can be on the side of the smallholders.”
Author: Isabel Esterman
This article was originally published on Mongabay under the Creative Commons BY NC ND licence. Read the original article.
