Centre eyes ways to stabilize sugarcane production amid weather shocks to meet domestic consumption and ethanol target

This comes against the backdrop of El Nino weighing on monsoon rainfall and causing prolonged dry spells last year especially in key sugarcane growing regions, including Maharashtra, Karnataka and Tamil Nadu. Inadequate rainfall has also caused drying up of the country’s 150 major reservoirs, especially in the southern regions where the water level in 42 reservoirs in the week ended Thursday were as low as 14% of capacity.

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Maharashtra, Uttar Pradesh, Karnataka, Gujarat and Tamil Nadu are key sugarcane producing states. In the ongoing 2023-24 (October-September) season, the country is estimated to produce 32 million tonnes (mt) of sugar after 2.38 mt diversion to ethanol, as against 32.9 mt last year.

Concerns over output

Uncertain weather conditions have also created concerns over crop output, driving the government to take a slew of preventative measures to tame food inflation, including an indefinite sugar export ban.

This also assumes significance as the government aims to achieve its E20 (20% ethanol blended with petrol) target by 2025-26.

The country requires 29 mt of sugar each year, with an annual growth rate of 1.5-2%. As per the estimates by Niti Aayog, to achieve E20 target by 2025-26 under the government’s ambitious EBP, the country needs 9.88 billion litres of ethanol, of which 55% must come from sugarcane.

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The sugar industry supplied over 83% ethanol in 2021-22 and 73% in the 2022-23 ethanol supply year. However, because of El Nino causing inadequate precipitation, productivity fell in drought prone areas which are identified to be about 25-26% of the total planted area of 5.7 million hectares (mh).

Sugarcane crop requires irrigation around the year, and it is crucial to augment irrigation resources and encourage drip irrigation systems to overcome such production fluctuations to bring stability in ethanol supply after meeting domestic consumption. Production of sugarcane in 2021-22 reached 46.1 mt but it dropped due to El Nino.

Productivity needs to rise

To meet the domestic consumption and E20 target, cane production requires to be enhanced from the current productivity of 76 tonnes per hectare (ha) to 83 tonnes a ha in the next five years and sustain at that level thereafter. There is also a requirement to increase the area under sugarcane to 6.2 million hectares (mh) from 5.7 mh so that production goes up to 51 mt.

Under the plan, a committee has been formed, consisting of industry members from ISMA and NFCSF, which is advising the government to come up with a sustainable plan to build a farmer centric pro energy transition ecosystem and become vehicle for realization of the government’s vision on the bio led energy transition in the country, ISMA director general Deepak Ballani told Mint.

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Ballani said that ISMA and NFCSF have drafted a proposal and sent it to the department of food and public distribution. 

“We proposed to the government to implement five schemes across different ministries—Per Drop More Crop, Watershed Development-PMKSY 2.0, Crop Residue Management, mechanisation under Sub-mission on Agricultural Mechanisation and National Agricultural Development Programme in red and yellow zone districts of key producing states particularly for sugar farmers or come up with a new scheme (National Mission on Sugarcane) similar to National Mission on Edible Oil. Financial outlay for the National Mission on Sugarcane for five years up to 2028-29 is estimated to be nearly ₹38,000 crore if the proposal gets through."

“With stabilization in production, cane output can increase further and be stable in future irrespective of weather changes," Ballani added.

Economic viability needs check

“The food ministry is examining the proposal and is yet to take a call after discussing it with the agriculture and Jal Shakti ministries as economic viability is to be checked," a senior government official said. 

“Due to constant weather changes, sugar production has become unpredictable. We need to bring sustainability to the sector in terms of production after what we have seen this season. Even if we fail to increase production, the current area needs to be sustained, and it won’t be possible until the irrigation issues due to poor rainfall in top growing states are resolved. Therefore, we are committed to addressing the issue and come up with a plan to incentivize sugarcane growers so that the crop area does not shrink. Otherwise, meeting EBP target and ensuring domestic consumption will be challenging."

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“However, I’m not sure if there will be a new scheme/policy drafted. We are yet to discuss it with the agriculture ministry. Depending on its suggestions, we will come up with a plan and push it to the government. We are still at the conceptualization stage and exploring all the options to increase the area under sugarcane and productivity and will keep them on the table after the new government is formed in June," the official added.

Queries sent to the agriculture, jal shakti and food and public distribution ministries remained unanswered at press time.