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Title:Ethanol production from sugarcane in India: Viability, constraints and implications
Author(s):Mino, Alexander K.
Advisor(s):Khanna, Madhu
Department / Program:Natural Res & Env Sci
Discipline:Natural Res & Env Sciences
Degree Granting Institution:University of Illinois at Urbana-Champaign
energy security
blend mandate
food security
Abstract:In 2008 India imported 128.15 million metric tons of crude, constituting 75% of its total petroleum consumption for that year. By 2025 it will be importing 90% of its petroleum (UNESCAP 2009). In an effort to increase its energy security and independence, the Government of India in October of 2007 set a 20% ethanol blend target for gasoline fuel to be met by 2017. In India, the vast majority of ethanol is produced from sugarcane molasses, a by-product of sugar. In the future it may also be produced directly from sugarcane juice. The main objective of this study is to develop an economic framework to determine the implications of the 2017 blend mandate for India’s food and energy security and allocation of land and water between food and fuel production. This is accomplished through the development of a static, spatial, multi-market economic model. The model is a partial equilibrium model which includes eight markets for agricultural commodities: wheat, rice, sorghum, corn, groundnut, rapeseed, cotton, and soybean in addition to the markets for sugar, alcohol and fuel (gasoline and biofuel). I evaluate the economically optimal allocation of land for sugarcane in the primary agricultural states of India. I analyze the implications of biofuel production for food prices and regional land use decisions between sugarcane and competing crops. I also examine the impacts of this biofuel policy on India’s export and import balance and test the sensitivity of my results to world market conditions by assuming multiple trade scenarios. Additionally I examine the potential for improved irrigation efficiency to lessen the trade-off of irrigation water for food crops versus fuel crops. If the Government of India hopes to successfully reach their ethanol blend goal for 2017 with minimum negative side effects on the rest of its economy, my model results suggest that it will need to convert its ethanol industry from one dependent solely on sugarcane molasses to one based primarily on sugarcane juice. My results also suggest that negative impacts on the domestic sugar and alcohol industry and agricultural markets are unavoidable. However these impacts can be lessened through investment in crop production technology and agricultural infrastructure to improve yields and efficiency of irrigation systems to increase availability of water or reduce water requirements for irrigated crop production.
Issue Date:2011-01-14
Rights Information:Copyright 2010 Alexander K. Mino
Date Available in IDEALS:2011-01-14
Date Deposited:2010-12

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