Biofuels to the rescue of distressed farmers in Andhra Pradesh

The Statesman reports that farmers in India's state of Andhra Pradesh who have been through crises for years, are looking to turn the corner thanks to the unprecedented emphasis on biofuels by the the state's government. With the aid of the Andhra Pradesh based Institute for the Semi-Arid Tropics (ICRISAT), a partner of the Consultative Group on International Agricultural Research (CGIAR), Governor Rajashekar Reddy has launched a biofuel program adapted to local agro-ecological conditions and which includes guaranteed minimum prices for biofuel feedstocks, resulting in new and secure incomes for the rural poor. Smallholders, and not agro-industrial giants, make up the vast bulk of producers who stand to benefit.

High fuel prices are having a direct negative effect on all sectors of life in the state, from industry to mobility and agriculture. Replacing fossil fuels with biofuels reduces this impact. Under the program, two types of biofuel feedstocks are being focused on: maize for the production of ethanol and pongamia seeds for biodiesel.

In Andhra Pradesh, the area under maize has doubled in the last three years and the government procured around 400,000 tonnes last year. Though this amount is currently meant to meet fodder needs for the poultry industry, the government is using this stream to lay a networking and marketing base for exploiting the feedstock for future biofuel production. Andhra Pradesh is aiming to begin ethanol extraction by mid-2008.

The manner in which government is promoting maize is impacting the farmers directly. Before the program, they would sell maize for 4000 rupiah (US$90) per ton or even less. The government has fixed a minimum support price of 5400 rupiah (US$122) per ton last year. "Now no farmer can say he is getting less than that. In fact they are selling at 6000-7000 rupiah (US$135-158) per ton on average”, the agriculture minister says.

Persistent drought in the state has made agriculture for food increasingly difficult, which is why drought-tolerant biofuel crops are being introduced as well, offering new opportunities for often desperate farmers.

The pongamia program relies on a system of guaranteed prices too. Pongamia pinnata (see profile in the Handbook of Energy Crops) is a widely grown drought tolerant tree that yields seeds the oil of which makes for a good biodiesel feedstock. It's water requirements are even lower than that of Jatropha curcas. The ICRISAT has been running a promising pilot project with the crop, which is benefiting the livelihoods of poor rural women by strengthening their incomes and by allowing them to diversify crops.

"We started work [with pongamia] in early 2006 and now 130,000 acres (52,610 hectares) are under plantation. This is national record. We prepared a scheme where the government pays 10,800 rupiah (US$244) for each acre of pongamia plantation managed by a smallholder. That is the amount needed for digging pits, planting saplings, watering and finally grafting”, he said.

The farmer would begin realising harvestable yields from the fourth year onwards. Now the government has announced that it offers a guaranteed minimum price of 10 rupiah per kilo. Each acre holds around 200 plants and each plant, in the worst case scenario, yields 2.5 kilos of seed. In other words, the smallholder is reaping 5,000 rupiah (US$113) worth of harvest per acre without any upfront investment:
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“In the tenth year an acre would yield between 12,000 to 15,000 rupiah of income (US$271 - 339). After the third year the plant needs no water support. This is a drought resistant variety and can survive even if there is no rain for four years. Biofuels are turning out to be a huge boom for our farmers”.

Agriculture minister Mr N Raghuveera Reddy adds that "no state has a road map for biofuel plantations and extraction comparable to Andhra Pradesh's. We are aiming to bring 5 million acres [2 million hectares] under cultivation exclusively for biofuel crops. That would be one fifth’s of the state’s total cultivable area,”

The government has tied up with companies to set up plants to extract petrol and diesel from maize and jethropa respectively. These units are coming up at Kakinda, Nandyal, Guntur and Hyderabad.

Image: poor women tending a pongamia nursery, courtesy ICRISAT.

More information:
Institute for the Semi-Arid Tropics: Biofuel Crops: Power to the Poor - Sept. 2006.