As global markets tighten sustainability standards, Indonesiaโs agricultural sector faces both challenges and opportunities in meeting the European Union Deforestation-Free Regulation (EUDR). This regulation, aimed at preventing deforestation-linked products from entering the EU, has sparked discussions on its implementation and impact on commodity-producing countries like Indonesia.
The EUDRโs enforcement, initially scheduled for 2024, has been delayed by 12 months due to concerns from various stakeholders. While this delay provides some breathing room, it also underscores the challenges of compliance, particularly for smallholder farmers who may struggle with the costs of traceability systems and certification.
To address these concerns, Koltiva hosted BeyondTraceability Talks, a hybrid forum bringing together key industry stakeholders to discuss EUDRโs evolving framework. Experts at the event included Ainu Rofiq, Co-Founder and Board Member of Koltiva, Diah Suradiredja from the Secretariat National Dashboard Development at Indonesiaโs Coordinating Ministry of Economic Affairs (CMEA), and Insan Syafaat, Executive Director at PISAgro. The discussion explored the economic implications of the EUDR and practical strategies to strengthen Indonesiaโs position in the global supply chain.
The role of technology in compliance
Indonesiaโs agricultural sector remains vital to its economy, with exports reaching US$52.9 billion and imports at US$30.3 billion in 2023 (Antara, 2023). However, deforestation and greenhouse gas emissions from land-use changes continue to be major challenges. Additionally, the sector lags in global value chain integration due to limited technological adoption, which affects product quality and efficiency.
To improve transparency and compliance, the Indonesian government is developing a National Dashboard, an integrated data system aimed at ensuring full traceability in commodity supply chains. This initiative is expected to support smallholder farmers and businesses in meeting the EUDRโs strict requirements.
According to Rofiq, businesses must shift from reactive to proactive supply chain management by investing in digital traceability solutions. He warns that companies failing to monitor sourcing practices risk losing access to key markets and damaging their brand reputation.
KoltiTrace, Koltivaโs flagship supply chain management platform, offers real-time insights into product origins, supplier compliance, and sustainability risks. Businesses using KoltiTrace can conduct risk assessments, implement mitigation strategies, and ensure their operations align with international sustainability regulations.
Bridging the gap for smallholders
While digital solutions are essential for compliance, Rofiq stresses that technology alone is not enough. Field verification and direct engagement with producers are equally important.
“Relying on digital reports alone is not enough,” says Rofiq. “Sustainability claims must be verified in the field to ensure credibility. Thatโs why the hybrid approachโcombining technology with hands-on field engagementโis the most effective way to build trust and ensure real impact.”
Koltiva deploys agronomists and field officers to conduct on-site evaluations, training sessions, and sustainability audits. These teams help smallholder farmers adopt best agricultural practices, comply with sustainability standards, and integrate into global value chains.
Beyond compliance, empowering smallholders through capacity-building programmes ensures long-term competitiveness in international markets. Training sessions covering financial literacy, regulatory standards, and sustainable farming techniques equip farmers with the skills needed to succeed.
“Education is critical in ensuring that smallholders are not excluded from global supply chains,” says Rofiq. “By equipping them with the right skills, we help them improve productivity, increase income, and meet international standards.”
Turning compliance into a competitive advantage
Despite the hurdles posed by EUDR, businesses that invest in traceability, verification, and smallholder inclusion can turn compliance into an opportunity. Proactive companies not only ensure regulatory compliance but also position themselves as leaders in sustainable and ethical trade.
“With the right combination of technology, field engagement, and capacity building, we can turn compliance into a competitive advantage,” concludes Rofiq.
As global markets shift towards deforestation-free commodities, collaboration between governments, industry leaders, and technology providers will be crucial in securing Indonesiaโs place in sustainable trade. By embracing transparency and innovation, businesses can navigate EUDR compliance while supporting smallholders and ensuring long-term sustainability in the agricultural sector.
