Farmers of sweet sorghum awaiting government’s announcement of separate ethanol pricing

Since meeting the sowing window is essential to the success of any biofuel project, a prompt decision might allow some mills begin persuading farmers to plant the crop in January. According to reports, the government still has to resolve several interministerial difficulties, such as the price of ethanol, therefore a project proposal that private seed company Advanta Enterprises presented to the agricultural ministry in April 2024 for financial support of roughly ₹23.5 crore has not yet materialized.

According to the proposal, Advanta has secured consent of 8 sugar mills (4 in Maharashtra, 2 in Uttar Pradesh and 1 each in Karnataka and Odisha) having a combined distillery capacity of 1,170 KLPD to take up the project through contract farming in 2,709-acre area.

However, Mawana Sugars, which Advanta mentioned as undertaking sweet sorghum on 278 acres, has mentioned (in the consent letter) that it would conduct the trial on only one acre, sources said.

Some of the mills, like Shreenath Mhaskoba Sakhar Karkhana and Khandoba Distilleries, have submitted that till there is a proper study on the costs, the government should announce a tentative buying price of ₹65.50/litre for the ethanol to be produced from sweet sorghum. Advanta expects 70 percent of the project cost will be recovered from selling ethanol.

Currently, oil marketing companies (OMCs) buy ethanol at different prices, as decided by the government, based on the feedstock used in its production. The government is yet to fix rates of ethanol for current Ethanol Supply Year (November-October). Sugarcane juice/syrup, Be heavy molasses, C heavy molasses, damaged food grain (rice), maize are the feedstock used for ethanol. Though rice (same quality as in human consumption) from FCI stock is allowed, distilleries do not buy due to higher costs.

There should be one nodal department for ethanol, which should be the interface with all stakeholders, the industry official said, adding that currently the subject is split among various ministries and of no one’s responsibility.

Sources pointed out that there are some deficiencies in the proposal of Advanta, as it has named the Indian Institute of Millets Research (IIMR) and the National Sugar Institute as technology partners, but there is no allocation of any funds from the project cost. Secondly, if OMCs pay a certain price to buy ethanol that covers the profit margin of distilleries, the cost of the Advanta’s project may not be that high, the sources said.

Advanta has projected that about Rs 15 crore will be spent on procurement of sweet sorghum stalk from farmers at Rs 250/quintal. However, experts said that farmers might not agree at that price as they will currently get higher rates if they sell those stalks as cattle feed.

The proposal has estimated that farmers will get about Rs 55,000/acre only from selling stalks if the average yield is 22 tonnes per acre. Besides, there will also be an additional income of Rs 20,000-22,000 per acre from selling grains at a minimum yield of 8 quintal/acre, sources said, adding the cost of cultivation.