In a recent address, Union Petroleum & Gas Minister Hon. Hardeep Singh Puri emphasized the three key principles of availability, affordability, and sustainability as the vision for India’s energy sector. These principles are not only crucial for the energy sector but also hold significant relevance for the sugar industry, which is eagerly awaiting revisions in the Minimum Support Price (MSP) for sugar, ethanol prices, and green hydrogen policies. This article explores how these principles can be applied to ensure the sustainability of the sugar industry in India.
1) AVAILABILITY: Availability in the context of the sugar industry means ensuring a consistent and reliable supply of sugarcane and its by-products.
a) Enhanced Agricultural Practices: Implementing advanced farming techniques and high-yield sugarcane varieties can increase production. For instance, the adoption of drip irrigation and precision farming, consolidated farming at village level can optimize water usage and improve crop yields.
b) Infrastructure Development: Building robust infrastructure for storage and transportation can reduce post-harvest losses and ensure that sugarcane reaches mills in optimal condition.
c) Research and Development: Investing in R&D to develop disease-resistant and climate-resilient sugarcane varieties will help maintain a steady supply despite environmental challenges.
The latest survey by the National Bank for Agriculture and Rural Development (NABARD) reveals some significant trends regarding per capita land holdings among Indian farmers. According to the survey, the average landholding size has decreased from 1.08 hectares in 2016-17 to just 0.74 hectares in 2021-22, marking a reduction of about one-third (31%).
Small land holders can’t afford for mechanised farming which has resulted in low productivity of the land. Total land under cane cultivation in India is 55 lakh hectares and considering the per hectare yield of sugarcane 80 MT’s, total available sugarcane for the crushing season 2024-25 will be 4400 Lakhs MT. Hence, for enhancing the land productivity and making more cane for the Ethanol Blending Program, there is an utter need for policy formation of “ Consolidated Farming at Village Level “. Union Govt. should think on this issue and formulate the policy accordingly which is the need of the day for increasing availability of the sugarcane. By this system, we can go for Drip Irrigation, Mechanised Farming Practices, Variety Planning, Inter Cropping etc and achieve the benefits of vast scale production coupled with reduction in cost of production.
Economic and Environmental Benefits of consolidated farming –
1) Boosting Rural Economy:
Job Creation: Large-scale farming can create employment opportunities in rural areas, reducing migration to urban centers.
Income Stability: Improved productivity and market access can lead to higher and more stable incomes for farmers.
Foreign Exchange Savings:
1) Ethanol Production: Increasing ethanol production can reduce the need for crude oil imports, saving foreign exchange.
Export Opportunities: Surplus sugar production can be exported, generating additional foreign exchange earnings.
Environmental Sustainability –
1) Reduced Carbon Footprint: Ethanol as a biofuel can help reduce the carbon footprint of the transportation sector.
Sustainable Farming: Consolidated farming can promote sustainable agricultural practices, preserving natural resources.
2) AFFORDABILITY: Affordability is about making sugar and its by-products economically accessible to consumers and profitable for producers. Key measures include:
a) Fair Pricing Policies : Revising the MSP for sugar to reflect the true cost of production and ensure fair compensation for farmers. This will encourage farmers to continue cultivating sugarcane.
b)Ethanol Blending Programs: Increasing the ethanol blending target to 20% by 2025, as highlighted by Hon. Minister Shriman Puri saheb, can provide an additional revenue stream for sugar mills and reduce dependency on sugar prices alone.
India has made significant strides in its ethanol blending program, achieving a blending rate of 13.9% during the ethanol year 2023-24. This progress is a testament to the country’s commitment to reducing its dependence on fossil fuels and promoting sustainable energy sources. With sugar consumption reaching 290 lakh metric tons (MT) against a production of 330 lakh MT, the nation is well-positioned to leverage its agricultural output for further advancements in ethanol production.
As India looks beyond 2025, the strategic planning for ethanol blending above 20% becomes crucial. This initiative not only aims to enhance energy security but also to support the agricultural sector, reduce greenhouse gas emissions, and promote economic growth. The roadmap for achieving higher ethanol blending levels will involve scaling up production capacities, optimizing supply chains, and ensuring regulatory support. Additionally, consumer awareness and industry collaboration will play pivotal roles in the successful implementation of this ambitious target.
Oil Marketing Companies (OMCs) have allocated around 837 crore litres of ethanol against 970 crore litres of offers submitted by manufacturers across the country for Ethanol Supply Year 2024-25 – Cycle 1. OMCs had invited tenders for the supply of 916 crore litres of ethanol for ESY 2024-25.
c) Subsidies and Incentives: Providing subsidies for inputs like fertilizers and machinery, and offering incentives for adopting sustainable practices can lower production costs and make sugar more affordable.
3) SUSTAINABILITY: Sustainability involves adopting practices that ensure long-term environmental, economic, and social viability.
For the sugar industry, this includes:
a) Green Hydrogen Policies: Encouraging the use of green hydrogen in sugar mills can reduce carbon emissions and promote cleaner production processes.
b) Waste Management: Utilising by-products like bagasse for bioenergy and molasses for ethanol production can minimize waste and create additional revenue streams.
c) Water Conservation: Implementing water-saving technologies and practices, such as rainwater harvesting and efficient irrigation systems, can reduce the industry’s water footprint.
Hence, it can be said that the sustainability of the Indian sugar industry hinges on the effective implementation of Green Hydrogen policies, robust waste management practices, and comprehensive water conservation strategies. The National Green Hydrogen Mission aims to revolutionize the energy landscape by promoting the use of green hydrogen, which can significantly reduce the carbon footprint of sugar mills. Concurrently, adopting advanced waste management techniques, such as converting bagasse into bioenergy and utilizing molasses for ethanol production, can minimize environmental impact and enhance resource efficiency. Furthermore, prioritizing water conservation through efficient irrigation methods and recycling processes is crucial for maintaining the ecological balance and ensuring the long-term viability of the industry. Together, these initiatives can pave the way for a more sustainable and resilient future for the Indian sugar sector.
ECONOMIC IMPLICATIONS IN APPLICATION OF SUSTAINABLE PRACTICES: Adopting sustainable practices in the sugarcane industry can have several significant economic implications, both positive and challenging. Here’s a detailed analysis:
Positive Economic Implications-
Cost Savings
Resource Efficiency: Sustainable practices such as efficient irrigation systems and precision agriculture can reduce water and fertilizer usage, leading to cost savings for farmers.
Energy Savings: Utilising renewable energy sources like bagasse for bioenergy can lower energy costs for sugar mills.
Increased Productivity
Improved Soil Health: Practices like crop rotation and organic amendments can enhance soil fertility, leading to higher crop yields and increased productivity.
Pest and Disease Management: Integrated Pest Management (IPM) can reduce crop losses due to pests and diseases, ensuring more consistent and higher-quality yields.
Market Opportunities
Premium Pricing: Products certified as sustainable or organic can often command higher prices in the market, providing better returns for farmers.
Export Potential: Sustainable practices can open up new export markets, especially in regions where there is a high demand for sustainably produced goods.
Government Incentives
Subsidies and Grants: Governments may offer financial incentives, subsidies, and grants to encourage the adoption of sustainable practices, reducing the initial investment burden on farmers and producers.
Long-term Viability
Resilience to Climate Change: Sustainable practices can make the sugarcane industry more resilient to climate change, ensuring long-term viability and stability of production.
Sustainable Supply Chains: Building sustainable supply chains can attract investment and partnerships with companies committed to sustainability.
Challenging Economic Implications
Initial Investment Costs-
High Upfront Costs: Transitioning to sustainable practices often requires significant upfront investment in new technologies, equipment, and training, which can be a barrier for small-scale farmers.
Infrastructure Development: Developing infrastructure for efficient water management, renewable energy, and waste treatment can be costly.
Market Fluctuations-
Price Volatility: The market for sustainable products can be volatile, with prices fluctuating based on consumer demand and market trends.
Certification Costs: Obtaining sustainability certifications can be expensive and time-consuming, adding to the financial burden on producers.
Knowledge and Training
Education and Training: Farmers and workers need to be educated and trained in sustainable practices, which requires time and resources.
Adoption Barriers: Resistance to change and lack of awareness can slow down the adoption of sustainable practices.
In short we can say that while the adoption of sustainable practices in the sugarcane industry presents some economic challenges, the long-term benefits far outweigh the initial costs. By improving resource efficiency, increasing productivity, and opening up new market opportunities, sustainable practices can lead to greater economic stability and profitability for the industry. Additionally, government support and incentives can play a crucial role in facilitating this transition, ensuring that the sugarcane industry remains competitive and sustainable in the future.
The principles of availability, affordability, and sustainability are integral to the future of India’s sugar industry. By taking immediate and decisive actions on these fronts, the Union Government can ensure the industry’s long-term viability and contribute to the nation’s economic and environmental goals. The revision of sugar MSP, ethanol prices, and the introduction of green hydrogen policies are critical steps in this direction.
P.G. Medhe is the former Managing Director of Shri Chhatrapati Rajaram Sahakari Sakhar Karkhana Ltd and sugar industry analyst. He can be contacted at +91 9822329898.
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