EUDR Compliance in Ghana’s Natural Rubber Sector and Its Implications for Smallholders

Stephan Mabica (), Erasmus Narteh Tetteh, Ingrid Fromm () and Caleb Melenya Ocansey
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Stephan Mabica: School of Agricultural, Forest and Food Sciences (HAFL), Bern University of Applied Sciences, 3052 Zollikofen, Switzerland
Erasmus Narteh Tetteh: Department of Agroforestry, Kwame Nkrumah University of Science and Technology (KNUST), Kumasi AK-385, Ghana
Ingrid Fromm: School of Agricultural, Forest and Food Sciences (HAFL), Bern University of Applied Sciences, 3052 Zollikofen, Switzerland
Caleb Melenya Ocansey: Crop Research Institute (CRI), Council for Scientific and Industrial Research (CSIR), Fumesua AE-0680, Ghana

Commodities, 2025, vol. 4, issue 3, 1-19

Abstract: The enforcement of the European Union Deforestation Regulation (EUDR) may reduce the supply of natural rubber to the European Union (EU), potentially leading to price increases due to the inelastic nature of rubber demand. This study assesses the potential financial implications for smallholder producers in Ghana, considering both the opportunities and risks associated with the evolving regulatory environment under EUDR and local market access conditions. A cost–benefit analysis (CBA) was conducted to evaluate the impact of different EUDR-related export decline scenarios on the net present value (NPV) of a standard 4-hectare plantation. The results suggest that even a minor 2.5% decline in global exports to the EU could increase the NPV by 17% for an independent compliant producer. However, a simulated COVID-19-like crisis in the fifth year of production leads to a 20% decline in NPV, reflecting vulnerability to external shocks. Based on these findings, the study identifies two priorities. This first is improving the coordination and harmonization of compliance efforts across the value chain to enable more producers to benefit from potential EUDR-related price increases. The recent creation of the Association of Natural Rubber Actors of Ghana (ANRAG) presents an opportunity to support such collective mechanisms. Second, minimizing losses during demand shocks requires the Tree Crops Development Authority (TCDA) to establish clear rules and transparent reporting for authorizing unprocessed rubber exports when factories reduce purchases due to low international prices—thus preserving market access for vulnerable producers. Together, these approaches would ensure that the potential benefits of the EUDR are realized inclusively, remain stable despite market downturns, and do not undermine value addition in domestic processing factories.

Keywords: EUDR; natural rubber; cost–benefit analysis; market access (search for similar items in EconPapers)
JEL-codes: C0 C1 C2 C3 C4 C5 C6 C7 C8 C9 D4 E3 E6 F0 F1 F3 F4 F5 F6 G1 O1 O5 Q1 Q2 Q4 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:gam:jcommo:v:4:y:2025:i:3:p:14-:d:1706224

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