ETHANOL: NEW EDGE BUSINESS OPPORTUNITY FOR FARMERS

Ethanol production has provided substantial economic, social, and environmental gains for the farmer community in India, with marked increases in income, job creation, crop diversification, and support for rural prosperity.

- KRISHAN BIR CHAUDHARY

Ethanol production has created a reliable new market for crops like sugarcane, maize, and surplus grains, which stabilises farm gate prices and increases incomes for participating farmers. Data from recent years shows sugarcane and maize farmers have seen a 15-18 per cent increase in annual earnings due to higher ethanol procurement rates, with maize farmers in Bihar, for instance, earning Rs 2,500-3,000 per hectare more than those in states lacking ethanol production.

‘The sector has facilitated payments exceeding Rs 1.04 lakh crore to farmers, greatly strengthening rural incomes and financial sustainability, especially in sugar belt regions like Uttar Pradesh and Maharashtra.

Expansion of ethanol production facilities and infrastructure has generated significant employment in rural areas, with every crore litre of ethanol produced resulting in nearly 290 direct and 1,280 indirect jobs along the agricultural value chain.

New distillery and logistics jobs have been created across states, supporting the broader rural bioeconomy and reducing dependence on government subsidies.

The ethanol program promotes crop diversification by incentivizing cultivation of alternate feedstocks (e.g., maize, sweet sorghum, biomass), which helps farmers manage risks and achieve more stable incomes. Absorption of surplus and damaged food grains prevents gluts, stabilizing prices, supporting food security policy goals, and reducing wastage.

Ethanol production and blending in fuel have considerably reduced greenhouse gas emissions—avoiding roughly 700 lakh tonnes of CO? equivalents and supporting India’s climate commitments.

2G ethanol production offers significant economic and environmental benefits to farmers by converting agricultural waste into a valuable commodity. This creates new revenue streams, addresses the issue of crop stubble burning, and stimulates the rural economy.