In 2021-2022, India surpassed Brazil to become the largest sugar producer in the world, producing 359 lakh tonnes – an all-time high. But this isn’t sweet news: with the resources that go into making all that sugar dwindling at an alarming rate, India’s sugar market might slip into its biggest crisis ever in the coming decades.
For farmers across most of India, sugarcane is one of the most profitable cash crops. This has led to chronic over-cultivation of sugarcane, reflected in the country’s sugar surplus and high sugar exports. The impact of this on the country’s groundwater is, however, disastrous – and it has also been overlooked. If we don’t address the chronic overuse of groundwater in the sugar industry soon and effectively, India’s agricultural sector will be at risk of collapse.
Why is there excess sugar production?
India is the world’s largest consumer of sugar, and thus has to produce enough to meet its huge domestic demand. But the excess production stems from policies and measures that make farmers favour sugarcane cultivation. The Central government offers a fair and remunerative price (FRP) scheme, which mandates a minimum price that sugar mills have to pay to sugarcane farmers, ensuring that farmers always get fair profits for their crop.
State governments also offer heavy subsidies to incentivise sugarcane cultivation. Some have argued that this is done to win farmers’ votes in politically important rural areas.
The resulting sugar surplus has led to higher exports, with a record 110 lakh tonnes exported in 2021-2022. In fact, Brazil, Australia, and Guatemala filed a complaint with the World Trade Organisation against India for violating international trade rules by offering excessive export subsidies and domestic support to farmers to outcompete other countries in the global sugar market. The Organisation ruled against India and India also lost its appeal.
What efforts have been made to address this issue?
To deal with the sugar surplus, the Indian government considered diverting it to the production of ethanol, an organic compound made by fermenting sugarcane molasses or sugar. Ethanol is the active ingredient in alcoholic beverages and is also used in the chemicals and cosmetics industries. In the transport sector, the use of ethanol-blended petrol (EBP) significantly reduces harmful emissions, such as of carbon monoxide and various hydrocarbons, from vehicles.
The government launched the EBP programme in 2003 to reduce crude oil imports and curtail greenhouse gas emissions from petrol-based vehicles; it has been fairly successful. It started with the modest goal of achieving a blending rate of 5%, but the target set for 2025 is 20%.
The government also reduced the Goods and Services Tax on ethanol from 18% to 5% in 2021. In the same year, of the 394 lakh tonnes of total sugar produced, about 35 lakh tonnes were diverted to produce ethanol, while India achieved a blending rate of 10% months ahead of target.
How does excessive sugarcane cultivation impact groundwater?
While the EBP programme has helped India significantly reduce its crude-oil imports and sugar exports – and overall greenhouse-gas emissions – sugarcane over-cultivation has exacted a steep natural cost. Sugarcane is a highly resource-intensive cash crop: it needs a large swath of land and guzzles groundwater.
There is abundant research as well as public discourse on sugarcane’s land needs, with experts recommending that installing solar panels would be a better use of land than sugarcane cultivation, to reduce net emissions. But relatively little attention has been paid to the crop’s inordinate consumption of water.
India’s top sugarcane-growing states are Maharashtra, Uttar Pradesh, Karnataka, Gujarat, and Tamil Nadu. The first three account for 85-90% of the sugar produced in the country. If sugarcane were a purely rainfed crop, it will need around 3,000 mm of rainfall a year to be irrigated. But these three states receive around 1,000-1,200 mm a year. The remaining water requirement is met by groundwater.
Most of this groundwater resides in confined aquifers, i.e. the water is trapped between two impermeable layers of rock. It can only be extracted by drilling a borewell through the upper layer. Such groundwater can’t be recharged by rainfall, so it is a limited resource.
Normally, 100 kg of sugar is produced from one tonne of sugarcane, which consumes around 2 lakh litres of groundwater for irrigation alone. Add to this the water for industrial sugar-manufacturing and -refining. In other words, the 110 lakh tonnes of sugar that India exported in 2021-2022 ‘includes’ 26 lakh crore litres of groundwater!
This is a worry: the top sugarcane growing states are already drought-prone as well as groundwater-stressed. In a 2022 report, the Central Ground Water Board (CGWB) noted that a third of all its groundwater assessment units in Maharashtra, Uttar Pradesh, and Karnataka were ‘semi-critical’, ‘critical’ or ‘over-exploited’.
What are the solutions to this problem?
While the environmental implications of excess sugar production should be clear, surplus production and export have enormous financial gain, amounting to lakhs of crores of rupees a year. So simply cutting sugar production isn’t a viable solution.
A better and more sustainable way would be to assess and then correct incentives that skew in favour of sugarcane over other crops, leading to the consistent surplus. Introducing fair and comprehensive subsidy schemes for a variety of crops can help farmers diversify as well as distribute cultivation evenly, prevent monocultures, and ensure an equitable income. Availability of a wider range of profitable and less resource-intensive crops can lower the strain on vital natural resources.
This must be complemented by environmentally responsible sugarcane cultivation practices that prioritise groundwater, such as drip irrigation, to tackle the issue in the long run. In drip irrigation, water is allowed to drip slowly but directly to the roots of sugarcane plants, reducing water consumption by up to 70% relative to the current flood irrigation method. Drip irrigation has already been made mandatory in many parts of India (including in the three states), and the government has also offered subsidies to farmers for setting up the systems.
Next, India needs to invest in overall water-saving and management systems. Concerted efforts to adopt cleaner practices such as rainwater harvesting, wastewater treatment, and canal irrigation networks, will help minimise stress on groundwater reservoirs as other water sources become available for irrigation.
Although the CGWB conducts significant research and generates valuable data, many aspects of groundwater availability and distribution remain poorly understood and/or mapped. Investment in groundwater research, therefore, needs to be considered seriously.
As India continues to become more of a global frontrunner in the agricultural sector, it must put sustainability at the centre.
The author is an analyst in the Climate, Environment and Sustainability sector at the Center for Study of Science, Technology and Policy (CSTEP), a research-based think tank.
