The Indian government, in partnership with the Indian Sugar and Bio-Energy Manufacturers Association (ISMA) and the National Federation of Cooperative Sugar Factories (NFCSF), is exploring strategies to stabilize sugarcane production amid dwindling irrigation resources and falling water levels in key reservoirs of major producing states. This initiative aims to ensure domestic consumption and meet ethanol blended with petrol (EBP) goals. The move comes as El Nino continues to impact monsoon rainfall, causing prolonged dry spells in sugarcane-growing regions like Maharashtra, Karnataka, and Tamil Nadu. The inadequate rainfall has led to the drying up of 150 major reservoirs across the country, particularly in southern regions where water levels in 42 reservoirs stood at a mere 14% of capacity as of the week ending Thursday. Maharashtra, Uttar Pradesh, Karnataka, Gujarat, and Tamil Nadu are the primary sugarcane-producing states. In the ongoing 2023-24 (October-September) season, India is projected to produce 32 million tonnes (mt) of sugar after diverting 2.38 mt to ethanol, compared to 32.9 mt last year. The uncertain weather conditions have raised concerns over crop output, prompting the government to implement precautionary measures, including an indefinite sugar export ban, to control food inflation. These concerns also align with the government’s goal of achieving an E20 (20% ethanol blended with petrol) target by 2025-26. India requires approximately 29 mt of sugar annually, with a steady growth rate of 1.5-2%. According to Niti Aayog estimates, to achieve the E20 target by 2025-26 under the government’s EBP initiative, the country needs 9.88 billion liters of ethanol, 55% of which must be derived from sugarcane. The sugar industry supplied over 83% of ethanol in 2021-22 and 73% in the 2022-23 ethanol supply year. However, due to insufficient precipitation caused by El Nino, productivity has declined in drought-prone areas, which account for approximately 25-26% of the total planted area of 5.7 million hectares (mh). Sugarcane cultivation requires year-round irrigation, and it is essential to bolster irrigation resources and encourage drip irrigation systems to mitigate production fluctuations and ensure a stable ethanol supply while meeting domestic consumption. In 2021-22, sugarcane production reached 46.1 mt but subsequently declined due to El Nino. To meet domestic consumption and E20 targets, cane production needs to be enhanced from the current yield of 76 tonnes per hectare (ha) to 83 tonnes per ha in the next five years and maintained at that level thereafter. Additionally, the area under sugarcane cultivation must be increased from 5.7 mh to 6.2 mh to elevate production to 51 mt. Under the plan, a committee comprising industry members from ISMA and NFCSF has been formed to advise the government on developing a sustainable plan that fosters a farmer-centric, pro-energy transition ecosystem and serves as a vehicle for realizing the government’s vision of a bio-led energy transition in the country, said Deepak Ballani, ISMA director general, to Mint. Ballani mentioned that ISMA and NFCSF have drafted a proposal and submitted it to the Department of Food and Public Distribution. He stated, “We have proposed to the government to implement five schemes across various ministries—Per Drop More Crop, Watershed Development-PMKSY 2.0, Crop Residue Management, mechanization under Sub-mission on Agricultural Mechanisation, and the National Agricultural Development Programme in red and yellow zone districts of key producing states, particularly for sugar farmers, or to introduce a new scheme (National Mission on Sugarcane) similar to the National Mission on Edible Oil.” The proposed National Mission on Sugarcane is estimated to require a financial outlay of nearly 38,000 crores over five years up to 2028-29 if approved. Ballani added, “With stabilized production, cane output can rise further and remain steady in the future, regardless of weather fluctuations.” A senior government official commented, “The food ministry is reviewing the proposal and has yet to make a decision after consulting with the agriculture and Jal Shakti ministries as economic viability needs to be assessed.” He elaborated, “Sugar production has become unpredictable due to constant weather changes. We need to bring stability to the sector in terms of production after what we have witnessed this season. Even if we cannot increase production, the current area needs to be maintained, which will be challenging without addressing the irrigation issues stemming from poor rainfall in top growing states. Therefore, we are committed to tackling this issue and developing a plan to incentivize sugarcane growers to prevent any reduction in the crop area. Otherwise, meeting EBP targets and ensuring domestic consumption will become increasingly challenging.” The official added, “However, I am unsure whether a new scheme or policy will be drafted. We have yet to discuss this with the agriculture ministry. Depending on their suggestions, we will formulate a plan and present it to the government. We are still in the conceptualization phase and exploring all options to expand the area under sugarcane cultivation and enhance productivity. We will continue to explore these options after the new government is formed in June.” Queries sent to the agriculture, jal shakti, and food and public distribution ministries remained unanswered at the time of press.
Government Explores Measures to Boost Sugarcane Production Amidst Climate Challenges
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