Date : 08/08/2023

Relevance : GS Paper 3 : Agriculture

Keywords: Fair and remunerative price (FRP) scheme, WTO, Ethanol petrol blending, Deversified Subsidy Scheme

Context-

• In a significant shift, India secured its position as the world's leading sugar producer in the year 2021-2022, surpassing even Brazil. However, this achievement is accompanied by a growing concern – the excessive production of sugar is rapidly depleting vital resources, potentially setting the stage for a crisis in the future.
• The intricate relationship between policies favoring sugarcane cultivation, the resulting sugar surplus, and the subsequent strain on groundwater resources has cast a shadow over the sustainability of India's agricultural sector.

The Factors Behind Excessive Sugar Production

• The phenomenon of India's excess sugar production can be attributed to a confluence of factors, including government policies and measures aimed at promoting sugarcane cultivation. At the heart of this lies the fair and remunerative price (FRP) scheme, a government initiative ensuring that sugar mills pay sugarcane farmers a minimum price, thereby ensuring their fair profits. State governments have further incentivized sugarcane cultivation through substantial subsidies, which some critics argue are aimed at securing the votes of farmers in politically influential rural regions.
• The repercussions of these policies have led to a significant sugar surplus, driving up exports to record levels. However, this expansionary approach has not escaped global scrutiny. Brazil, Australia, and Guatemala raised objections with the World Trade Organization (WTO), alleging that India's excessive export subsidies and domestic support violate international trade rules. The subsequent ruling against India by the WTO underscored the global ramifications of this sugar surplus.

Addressing the Excess Sugar Production: Ethanol as a Solution

• To mitigate the challenges posed by surplus sugar production, the Indian government has explored alternative avenues, with a focus on diverting excess sugar to ethanol production. Ethanol, a versatile organic compound derived from fermenting sugarcane molasses or sugar, has a range of applications in various industries, from alcoholic beverages to chemicals and cosmetics. In the realm of transportation, ethanol-blended petrol (EBP) has emerged as an effective strategy to reduce harmful emissions from vehicles, contributing to reduced crude oil imports and greenhouse gas emissions.
• The government's Ethanol Blended Petrol (EBP) program, initiated in 2003, has made significant strides, aiming to achieve a blending rate of 20% by 2025. Reductions in the Goods and Services Tax (GST) on ethanol have further supported this transition. Efforts to channel a substantial portion of sugar towards ethanol production have yielded positive results, highlighting a potential solution to the problem of excess sugar.

Groundwater Depletion and Environmental Consequences

• While India's EBP program has succeeded in reducing certain imports and emissions, it has also unearthed environmental concerns associated with sugarcane cultivation. The intensive water requirements of sugarcane, coupled with over-cultivation, have significantly impacted groundwater resources. This trend is particularly pronounced in India's top sugarcane-growing states, which rely heavily on groundwater for irrigation.
• With sugarcane demanding approximately 3,000 mm of rainfall for optimal growth, regions that typically receive 1,000-1,200 mm of rainfall resort to excessive groundwater extraction from confined aquifers. A startling statistic emerges – the cultivation of 100 kg of sugar necessitates a staggering two lakh liters of groundwater for irrigation. This alarming scenario has escalated concerns, particularly in drought-prone and groundwater-stressed areas, threatening the availability of this vital resource.

Sustainable Solutions and the Path Forward

• To safeguard India's agricultural sector from a looming crisis and ensure its long-term sustainability, a multifaceted approach is imperative. While the allure of financial gains from sugar surplus and exports is undeniable, a shift towards balanced and sustainable agricultural practices is essential.

Diversified Subsidy Schemes

• A crucial step involves reevaluating incentive structures that disproportionately favor sugarcane cultivation over other crops. By introducing comprehensive and fair subsidy schemes for a variety of crops, farmers can be encouraged to diversify their cultivation practices. Such measures can prevent monocultures, promote equitable income distribution, and contribute to more efficient resource utilization.

Environmentally Responsible Cultivation

• The adoption of environmentally conscious cultivation practices holds the key to mitigating the groundwater depletion crisis. Implementing methods such as drip irrigation, which directs water directly to the roots of sugarcane plants, can significantly reduce water consumption compared to traditional flood irrigation techniques. Government support through subsidies for setting up drip irrigation systems can accelerate this transition.

Integrated Water Management

• India's agricultural landscape requires a comprehensive approach to water management, encompassing rainwater harvesting, wastewater treatment, and improved canal irrigation networks. By minimising stress on groundwater reservoirs and exploring alternative water sources for irrigation, the strain on vital resources can be alleviated.

Investment in Research

• Despite significant strides, gaps remain in understanding groundwater availability and distribution. Investing in comprehensive groundwater research and data collection is essential for informed decision-making and sustainable resource management.

Conclusion:

As India assumes a prominent role in the global agricultural arena, the imperative for sustainability becomes increasingly apparent. While the achievements in sugar production are commendable, the nation must navigate the delicate balance between economic gains and environmental responsibility. By reassessing subsidy structures, promoting diversified cultivation practices, and embracing environmentally conscious techniques, India can pave the way for a resilient agricultural sector that not only based on the article: meets domestic demands but also ensures the well-being of future generations.

Source - The Hindu