The food-fuel conundrum – The Hindu BusinessLine

India that imports virtually 80 per cent of its oil necessities has seen costs spiralling upwards in latest weeks. To cut back imports, the Centre has regarded in direction of renewable vitality, electrical autos and hybrid or blended gasoline.

The Centre notified the Nationwide Coverage on Biofuels–2018 (NPB–2018) to spice up use of blended gasoline in June 2018.

However little thought has thus far gone into how this coverage might threaten meals safety. It might result in demand-supply disruptions of meals crops resulting in inflation. Additionally, elevated manufacturing of water-intensive crops can deplete floor water desk.

So, ethanol manufacturing utilizing meals crops is a double-edged sword.

To decrease the carbon footprint and cut back reliance on petrol, the Centre has targetted a gasoline normal of 20 per cent ethanol by 2030. This transfer would require about 10 billion litres of ethanol yearly and about ₹500 billion to construct extra biorefineries. The Prime Minister hopes to avoid wasting $4 billion for the exchequer yearly from this transfer.

Sugarcane is a significant supply for ethanol manufacturing. Nonetheless, the Centre has plans to push for better manufacturing from non-sugar sources and has supplied credit-linked subsidy schemes to arrange distillation items and bio-refineries that utilise molasses and surplus and broken foodgrains.

The Centre’s plans to construct ethanol distillation capability of of 760 crore litres from molasses-based distilleries and 740 crore litres from grain-based distilleries will want 60 lakh tonnes of sugar and 165 lakh tonnes of grains each year by 2025.

Guarantees and pitfalls

Given the dip in sugar consumption as a result of well being consciousness, better ethanol manufacturing might give a push to the sugar trade.

That is true for foodgrains in addition to farmers will rely much less on MSPs if various demand in bio-refineries is created. This can additional improve the productiveness of farmland in much less fertile areas. Additionally they’ll develop low-value crops like maize, millet, barley, which can be utilized in second-generation distilleries.

So, the Centre’s plan will profit each sugarcane and grain farmers as they might have a number of choices to promote their produce.

However the adversarial impression of grains diversion on ethanol manufacturing can’t be ignored. In years of deficit foodgrains manufacturing, the diversion of foodgrains and sugarcane to distilleries and bio-refineries can create stress on the shares earmarked for human consumption via the PDS, leading to meals inflation.

At the moment, the Centre has permitted using sugarcane, molasses, sugar, maize, broken foodgrains and surplus rice mendacity with the FCI for ethanol manufacturing. States like Chhattisgarh allowed using rice procured by the state authorities for ethanol manufacturing and even different states might undertake comparable initiatives.

However this coverage might additionally drive extra farmers in direction of water-intensive crops.

Sugarcane and paddy devour virtually 70 per cent of the whole water utilized in irrigation.

Regardless of being a water-intensive crop and costly uncooked materials for ethanol manufacturing, the NITI Aayog Professional Committee has thought of sugarcane as a profitable meals crop. Alternatively, maize, millet, barley require much less water and are low-cost crops and farmers can develop them as a substitute of water-intensive sugarcane and rice.

Equally, tubers like potato, sugar beet, candy sorghum, cassava can be utilized as uncooked materials, that are utilized in a giant approach within the US, Brazil, European international locations, and China.

So, a deliberate break up between meals and industrial use of foodgrains and sugarcane ought to be labored out, and a coverage to manipulate the demand and provide of meals and gasoline must be devised.

To unravel the food-fuel conundrum we have to strike a stability between guarantees and pitfalls.

Rauniyar is a doctoral pupil, and Dey is Chairman, CFAM of IIM Lucknow. Views are private

https://www.thehindubusinessline.com/opinion/the-food-fuel-conundrum/article35348867.ece

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