Water-food-energy challenges in India: political economy of the sugar industry

Abstract

Sugar is the second largest agro-based industry in India and has a major influence on the country’s water, food, and energy security. In this paper, we use a nexus approach to assess India’s interconnected water-food-energy challenges, with a specific focus on the political economy of the sugar industry in Maharashtra, one of the country’s largest sugar producing states. Our work underscores three points. First, the governmental support of the sugar industry is likely to persist because policymakers are intricately tied to that industry. Entrenched political interests have continued policies that incentivize sugar production. As surplus sugar has been produced, the government introduced additional policies to reduce this excess and thereby protect the sugar industry. Second, although the sugar economy is important to India, sugar policies have had detrimental effects on both water and nutrition. Long-standing government support for sugarcane pricing and sales has expanded water-intensive sugarcane irrigation in low-rainfall areas in Maharashtra, which has reduced the state’s freshwater resources and restricted irrigation of more nutritious crops. Despite its poor nutritional value, empty-calorie sugar has been subsidized through the public distribution system. Third, the Indian government is now promoting sugarcane-based ethanol production. This policy has the benefit of providing greater energy security and creating a new demand for surplus sugar in the Indian market. Our analysis shows that a national biofuel policy promoting the production of ethanol from sugarcane juice versus directly from molasses may help reduce subsidized sugar for human consumption without necessarily expanding water and land use for additional production of sugarcane.