Why in the News?
India now aims to increase ethanol blending in petrol to 30% to reduce the use of fossil fuels, after reaching its earlier target of 20% for 2025 ahead of time.
What factors have contributed to the decline in sugarcane production in India since 2022?
- Red-Rot Disease: A major fungal infection that affects the stalk and reduces crop health and yield. Eg. In Uttar Pradesh and Maharashtra, outbreaks of red-rot significantly reduced sugarcane productivity post-2022.
- Deficient Rainfall: Inadequate monsoon rains have led to water stress in sugarcane-growing regions. Eg. In Maharashtra and Karnataka, below-normal rainfall in 2023 led to poor crop growth and lower yields.
- Flowering Issues: Disruption in the natural flowering cycle affects cane maturity and sugar content. Eg. In southern India, unseasonal weather affected flowering patterns, resulting in underdeveloped canes.
- Soil Depletion (Soil Fatigue): Continuous sugarcane monocropping depletes soil nutrients, lowering productivity. Eg. In western Uttar Pradesh, repeated sugarcane cultivation without crop rotation has led to reduced soil fertility.
- Crop Diversion: Farmers are shifting to other crops due to uncertain returns and rising input costs. Eg. In Tamil Nadu and Andhra Pradesh, farmers moved to pulses and cotton, reducing the area under sugarcane.
Why has the Indian government approved a hike in the Fair Remunerative Price for sugarcane?
- Support for Farmer Income: The hike in FRP is intended to ensure that farmers receive a fair price for their produce, thus supporting their income. Eg: The increased FRP of ₹355 per quintal (up from ₹340) ensures that farmers are adequately compensated, especially as input costs have risen. This makes sugarcane cultivation more attractive to farmers.
- Addressing Rising Input Costs: The costs of farming inputs, such as fertilizers, labor, and irrigation, have increased, and the FRP hike helps mitigate these expenses for farmers.
Eg: With the rise in fertilizer prices, the government’s decision to raise the FRP ensures that farmers can continue cultivating sugarcane without facing financial distress due to high input costs. - Incentivizing Sugarcane Production: A higher FRP encourages farmers to cultivate more sugarcane, addressing concerns over declining sugarcane production in India.
Eg: In regions like Maharashtra and Uttar Pradesh, where production has been affected due to reduced farmer interest, the FRP increase motivates farmers to maintain or increase their sugarcane acreage. - Ensuring Steady Sugar Supply: Maintaining sugarcane production through higher FRP ensures a stable sugar supply for the domestic market. Eg: With India being one of the world’s largest sugar producers, ensuring adequate sugarcane production is vital to prevent sugar shortages and price hikes, as seen in previous years.
- Timely Payments to Farmers: The FRP hike ensures that sugar mills can afford to make timely payments to farmers, thus reducing arrears. Eg: In the past, many farmers faced delayed payments from mills. The higher FRP is expected to make it financially feasible for mills to pay farmers on time.
Which alternatives is the government considering to offset the sugarcane shortfall for ethanol?
- B-Heavy Molasses: The government has lifted restrictions on B-heavy molasses for ethanol production, increasing supply without extra sugarcane cultivation. Eg: 750,000 metric tons of B-heavy molasses are now available for ethanol production.
- Cane Juice and Syrup: Sugar mills can now use cane juice and syrup for ethanol, boosting production capacity. Eg: Policy change allows sugar mills to divert more resources into ethanol production from sugarcane juice.
- Grain-Based Ethanol: The government is encouraging the use of grains like maize and rice for ethanol, diversifying feedstocks. Eg: India has turned to maize for ethanol production, though it has led to increased corn imports.
- Food vs. Fuel Balance: The government has adjusted policies to prioritize sugar production when needed. Eg: Restrictions were imposed on ethanol production in December 2023 to ensure sufficient sugar supply.
- Molasses-Based Ethanol Procurement Price: The government has increased the procurement price for molasses-based ethanol to incentivize production. Eg: The procurement price was raised by 3% to ₹58 per liter to boost ethanol supply.
Way forward:
- Promote Crop Diversification and Sustainable Practices: Encourage farmers to adopt crop rotation and diversified farming practices, alongside promoting resilient sugarcane varieties, to reduce dependency on sugarcane monocropping and mitigate soil depletion.
- Strengthen Ethanol Supply Chain and Support Alternative Feedstocks: Enhance infrastructure for processing alternative feedstocks like maize and rice for ethanol production, while incentivizing the use of B-heavy molasses and cane juice to ensure a steady supply of ethanol without further straining sugarcane resources.
Mains PYQ:
[UPSC 2024] What are the causes of persistent high food inflation in India? Comment on the effectiveness of the monetary policy of the RBI to control this type of inflation.
Linkage: The rise in sugar price, partly due to diversion for ethanol blending, is “pinching the pockets of consumers”. This question directly addresses the causes of high food inflation, which is a significant impact of the “food vs fuel” dynamic where increased demand for crops for fuel can drive up food prices.
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