21 Aug 2021 Sugar to ethanol: Government increases its support
Posted at 08:43h in Daily current-affairs 0 Comments
Sugar to ethanol: Government increases its support
Sugar cane farmers will benefit greatly as the government supports the export of excess sugar and the conversion of sugar to ethanol in order to secure timely payment of cane dues.
- To assure prompt payment of sugarcane farmers’ dues and to strengthen the agricultural sector, the Indian government is pursuing proactive measures to boost exports of surplus sugar and diversion of sugar to ethanol.
- Sugar production in the country has surpassed domestic demand in recent years.
- Sugar mills have been encouraged to divert surplus sugar to ethanol, and the government has provided financial aid to sugar mills to facilitate sugar export, boosting their liquidity and allowing them to pay sugarcane farmers’ cane price dues on schedule.
- During the 2017-18, 2018-19, and 2019-20 sugar seasons, approximately 6.2 lakh metric tonnes (LMT), 38 LMT, and 59.60 LMT of sugar were exported, respectively.
- The government is offering support at a rate of Rs. 6000 per MT to facilitate the export of 60 LMT of sugar during the current sugar season 2020-21 (October – September).
Steps taken by the government
- To find a long-term solution to the problem of excess sugar, the government is encouraging sugar mills to redirect excess sugarcane to ethanol, which is combined with gasoline and acts as both a green fuel and a foreign exchange saver due to crude oil imports.
- Sugar mills benefit from the revenue generated by ethanol sales since it helps them pay off farmers’ cane price debts. Approximately 3.37 LMT and 9.26 LMT of sugar were diverted to ethanol in the 2018-19 and 2019-20 sugar seasons, respectively.
- More than 20 LMT of sugar is expected to be diverted during the current sugar season (2020-21). About 35 LMT of sugar is expected to be diverted in the following sugar season (2021-22)
- By 2024-25, about 60 LMT of sugar will have been redirected to ethanol, addressing the problem of excess sugarcane/sugar as well as delayed payment difficulties because farmers will be paid soon.
- However, due to the addition of significant ethanol distillation capacity by 2024-25, sugar exports will continue for another 2-3 years.
- Diversion of maximum sugar to ethanol and export of maximum sugar would not only help sugar mills improve their liquidity, allowing them to pay cane dues to farmers on time, It would, however, stabilise the ex-mill price of sugar in the domestic market, boosting revenue realisation for sugar mills and addressing the surplus sugar problem.
- Increased blending levels will reduce reliance on imported fossil fuels, as well as air pollution, and will improve the agricultural sector for another 2-3 years.
Syllabus: GS 3 (Agriculture)