Paper: GS – III, Subject: Economy, Topic: Broad/Overlap, Issue: Leveraging rural energy economy.
Context:
PM inaugurated a bamboo-based bio-refinery in Assam, signalling diversification beyond maize and sugarcane. Linking rural energy supply chains to biofuels can boost farmer incomes, reduce imports, and cut emissions.
Key Highlights:
Biofuels programme: India’s biofuel programme has expanded rapidly, with blending of up to 20% ethanol in petrol.
Objectives of Biofuel Programme:
- Reduce foreign exchange outflow as India imports 88% of its oil needs.
- Enhance farmer earnings by creating assured markets for farm produce.
- Cut carbon emissions through ethanol blending and reduced stubble burning.
Progress So Far:
- Ethanol blending programme supplied by public-sector oil companies.
- Price and volume support to miller-distillers encouraged farmer participation.
- Maize prices rose 70% in last 4 years due to ethanol demand; sugarcane prices held firm.
- Farmers gained liquidity as millers and oil companies cleared dues faster.
Challenges:
- Over-reliance on maize & sugarcane: As both are high-starch crops, over-concentration risks pose threat to food security if acreage expands excessively.
- Limited diversification: Though Bamboo, crop residues, and farm waste have promising potential in Northeast India, their supply chains are underdeveloped.
- Economic Costs: Ethanol production must remain competitive without distorting crop choices.
- Supply Chain Gaps: Lack of aggregation systems for crop residue and high upfront costs of baling machines discourage farmers.
Way Forward:
Conclusion:
By linking the biofuel programme to the broader rural energy economy, India can achieve energy self-reliance (Atmanirbharta), sustainable rural growth and environmental benefits through reduced stubble burning.
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