100
with little or no effort. Although the biofuel policy was supposed to support the rural
landless laborers and farmers, in reality it supported partial employment for women
and children mainly due to its irregularity and wage structure with below market
rates. In most cases, it was observed that during the plantation process and seed collection, the involvement of rural women and children, for whom this was a part-time
activity, reduced productivity. This further indicates the lack of incentives in the
program to engage the rural male population.
Regarding the goal of promoting energy self-sufficiency and national energy
security, it seems difficult for first-generation plant-based biofuels to make a significant contribution. With the burgeoning total fossil fuel demand in the country, the
absolute amount of biofuels that would be required by the 20% target is also rapidly
increasing and at a much faster rate compared to the pace of increase in biofuel
production. Finally, the goal of improving environmental quality through biofuels
remains a lower priority, as large-scale market production has not been achieved.
Uneven availability of market information, which is related to underdeveloped
regulation, is another problem. The majority of the market information still lies with
the downstream stakeholders starting from the seed crushers to the oil marketing
companies. However, a severe lack of information still persists among the upstream
stakeholders including the farmers and field workers. Such information asymmetries have created opportunities for middle traders in the market who are distorting
the pricing system. It has been recorded that in some places Jatropha seeds are sold
ten times the market price to the mill owners, while the farmers and producers are
still getting a below average price (even lower than the minimum selling price).
India’s national biofuel policy and its mission were well-intentioned, but many
details were not developed, so they were not well-implemented. Many aspects of the
policy were either vague or not well developed, especially in comparison with other
industrial promotion policies, particularly related to pricing.
8.3.4 Analysis
As the first-generation biofuels have come under global scrutiny in the context of
their sustainability in terms of net energy gain, emission reduction potential, and
resource utilization, the Indian biofuel program has also not been free from those
concerns. India has been suffering from a severe water crisis and lack of irrigation
facilities. India’s bioethanol production is highly vulnerable to water shortages
since it is heavily dependent on water-intensive sugarcane production. Sugarcane is
one of the most water- and energy-intensive crops, and unfortunately in India, sugarcane is being produced in the most water-stressed regions and with complete
groundwater irrigation. Given the limited availability of natural resources in India,
especially land and water, it is doubtful that the country can produce enough surplus
sugarcane in the coming years to satisfy the potentially huge demand for ethanol.
M. Elder et al.
with little or no effort. Although the biofuel policy was supposed to support the rural
landless laborers and farmers, in reality it supported partial employment for women
and children mainly due to its irregularity and wage structure with below market
rates. In most cases, it was observed that during the plantation process and seed collection, the involvement of rural women and children, for whom this was a part-time
activity, reduced productivity. This further indicates the lack of incentives in the
program to engage the rural male population.
Regarding the goal of promoting energy self-sufficiency and national energy
security, it seems difficult for first-generation plant-based biofuels to make a significant contribution. With the burgeoning total fossil fuel demand in the country, the
absolute amount of biofuels that would be required by the 20% target is also rapidly
increasing and at a much faster rate compared to the pace of increase in biofuel
production. Finally, the goal of improving environmental quality through biofuels
remains a lower priority, as large-scale market production has not been achieved.
Uneven availability of market information, which is related to underdeveloped
regulation, is another problem. The majority of the market information still lies with
the downstream stakeholders starting from the seed crushers to the oil marketing
companies. However, a severe lack of information still persists among the upstream
stakeholders including the farmers and field workers. Such information asymmetries have created opportunities for middle traders in the market who are distorting
the pricing system. It has been recorded that in some places Jatropha seeds are sold
ten times the market price to the mill owners, while the farmers and producers are
still getting a below average price (even lower than the minimum selling price).
India’s national biofuel policy and its mission were well-intentioned, but many
details were not developed, so they were not well-implemented. Many aspects of the
policy were either vague or not well developed, especially in comparison with other
industrial promotion policies, particularly related to pricing.
8.3.4 Analysis
As the first-generation biofuels have come under global scrutiny in the context of
their sustainability in terms of net energy gain, emission reduction potential, and
resource utilization, the Indian biofuel program has also not been free from those
concerns. India has been suffering from a severe water crisis and lack of irrigation
facilities. India’s bioethanol production is highly vulnerable to water shortages
since it is heavily dependent on water-intensive sugarcane production. Sugarcane is
one of the most water- and energy-intensive crops, and unfortunately in India, sugarcane is being produced in the most water-stressed regions and with complete
groundwater irrigation. Given the limited availability of natural resources in India,
especially land and water, it is doubtful that the country can produce enough surplus
sugarcane in the coming years to satisfy the potentially huge demand for ethanol.
M. Elder et al.