Sweet sorghum farmers: Waiting for Govt to announce ethanol pricing

Trial of sweet sorghum as a crop for biofuel is stuck as a decision on its ethanol pricing lingers on.

A swift decision may help some mills to start convince farmers to plant the crop in January since meeting the sowing window is very crucial for the success of any biofuel project.

A project proposal, submitted by private seed company Advanta Enterprises, to the agriculture ministry in April 2024 for financial support of about ₹23.5 crore is yet to be materialised as the government has to sort out some inter-ministerial issues including pricing of ethanol, sources said.

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 acres area.

However, Mawana Sugars, which Advanta mentioned as to undertake sweet sorghum in 278 acres, has mentioned (in the consent letter) that it would conduct the trial in 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 per cent of the project cost will be recovered from selling ethanol.

“The ethanol price is the key factor as accordingly mills will decide the purchase price of sweet sorghum from farmers. In the absence of any declared price the government should announce its commitment to pay the final ethanol price if arrived after the processing so that mills will be able to buy sweet sorghum stalk at a competitive price,” an industry official said.

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 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 Indian Institute of Millets Research (IIMR) and National Sugar Institute as technology partners, but there is no allocation of any funds from the project cost. Secondly, if OMCs pay certain price to buy ethanol that covers 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.

“Farmers need to be convinced about its long-term benefits as they will have an assured market without the risk of price volatility. Besides, they will have some additional income from grains, though yield in that case is half from normal sorghum,” said a scientist.

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 minimum yield of 8 quintal/acre, sources said adding the cost of cultivation.