Title: Biofuels from Marginal lands: Some insights for India Deepak Rajagopal Energy and Resources Group, UC Berkeley
1Biofuels from Marginal lands Some insights for
IndiaDeepak RajagopalEnergy and Resources
Group, UC Berkeley
2Outline
- Agricultural context for Biofuel in India
- Comparison of major biofuel crops
- Implications for welfare analysis
- Opportunity cost of marginal land
- Distributional aspects
- Electricity or Transportation fuel?
- Conclusion
3Agricultural Context for biofuel
- Vast differences in comparison with
US/Europe/Brazil - Food security
- barely self sufficient (considered an important
policy goal) - High income elasticity, population growth,
plateau-ing yield - Climate
- dry and semi-arid tropical (at least where low
cost land exists) - Water and Irrigation
- Dependent on seasonal monsoon rains (less than
30 irrigated) - Size of land holding
- small and fragmented with mean land holding lt 1
hectare - subsistence farming
- Energy needs
- 60 of rural homes have no electricity connection
- 90 of rural homes have no cooking gas
4Land allocation for agricultural crops
Sorghum, Millet, Maize and Cotton comprise about
21 of Indias cultivated land
Source Government of India, Ministry of
Agriculture
These lands offer opportunities for sweet sorghum
to produce biofuel without impacting food
5Mean profit for various crops
Source Cost of Cultivation of Prinicpal Crops in
India Survey, 2000, Govt. of India, Ministry of
Agriculture
6Semi-arid tropics
Climatic regions receiving low annual rainfall
(250-500 mm or 10-20 in)
Semi arid zone in south central and south India
Source Millienium Ecosystem Assessment 2005,
Chapter 22
- Rain-fed areas, which were largely unaffected by
Green Revolution, offer the most growth for an
additional unit of investment compared to fertile
and irrigated areas Fan and Hazell, IFPRI 1999
7Targets for Biofuel
- 16 billion litres biodiesel by 2011-12
- about 20 of anticipated diesel demand
- expected to require about 11 million hectares of
land devoted to Jatropha curcas (about 8 of
cultivated land today) - in reality more land is need since assumed yield
is high - targeted lands are degraded forests, waste and
marginal lands - target not adopted by parliament unlike US or EU
- Source Planning Commission Report 2003,
Government of India
8Marginal land
- Agricultural land is marginal due to several
reasons - Biophysical
- Water scarcity
- Soil fertility
- Drainage
- Slope
- Poor management practices
- Distance from market
- Several constraints can be overcome using
investments in - modern technology like drip irrigation,
fertilizers and micro nutrients, improved crop
varieties etc. - credit
- better management practices
9Comparison of oil seed crops
- Jatropha - Low water, high water productivity,
moderate yield and is non-edible - Perennial crop, requires 3 to 4 years to mature
- has not been grown commercially before
10 Simple cash flow analysis for hypothetical
Jatropha farm on wasteland with no irrigation
IRR based on point estimates is 25.6 Carbon and
other externalities not monetized No land cost
assumed
11Waste (Marginal) land use
Survey results indicate the importance of
wastelands which are mostly common lands to rural
households
- Percentage of households reporting use of
wastelands
Source National Sample Survey Organization 1999
as reported in Gundimeda 2005
Jatropha plantations do not provide fuelwood or
fodder and so they may be opposed by poor
requiring fencing and guarding which would
increase cost
12Wastelands have alternative economically viable
options for regeneration
Review of 18 afforestation projects under taken
on degraded common lands shows high IRR
(intercept 25.9)
Source Balooni 2003
13Sensitivity of NPV to land rent and oilseed price
Crops grown at these rents
Coarse cereals
Edible oil seeds
Rice/wheat
Sugarcane
- Jatropha not viable on sugarcane land
- Viable on land growing rice or wheat at higher
output prices - Viable on very low quality land
- Medium quality land seems no cars land
14Electricity or Transportation fuel?
- 2. LCA studies generally compare biodiesel with
diesel - If marginal capacity addition is coal then using
biodiesel to offset coal power may have higher
carbon benefit than offsetting diesel - IPCC emission factor for coal 96 g CO2 per MJ
- for diesel 74 g CO2 per MJ
-
- gt Additional offset 22 g CO2 per MJ
- Note this is per MJ of fuel combusted, so will
be different when we consider energy delivered - Need to also look at social and economic net
benefits of household electricity access versus
transportation
15Distributional implications
- For projects on common lands, need to compare the
increase in surplus from labor with decrease in
surplus from losing access to fuelwood and fodder - - may worsen energy poverty in rural areas
- Adoption in private farms likely to be confined
to large farmers - early evidence from State of Maharashtra (Prayas
2005) - barriers to small farms
- subsistence needs
- long growth phase
- risk and uncertainty
- lack of familiarity with cultivation practices
- market
- Economies of scale
16Sweet sorghum for ethanol
Sweet sorghum a variant of grain sorghum has -
Low water demand, high water productivity, high
yield - yields grain and fuel Grain sorghum is
already grown on 10 million hectares mostly by
small farmers in semi-arid areas under rainfed
conditions (Sugar beet, switchgrass and
Miscanthus are not viable in semi-arid tropics)
17Sweet sorghum and Jatropha
18Electricity or Transportation fuel?
Calculation comparing approximate land for
biodiesel and electricity
19Electricity or Transportation fuel?
- All rural homes can be provided electricity with
less land than required to meet 20 of diesel
demand - But diesel demand growing at 5 per annum
- Increasingly more land will be required unless
yield increases at that rate too, which is
unlikely
20Conclusion
- Jatropha on marginal land with low inputs will
not affect food and water - crop survives harsh conditions but yield is
affected - Two different diffusion strategies to exploit
economies of scale - Sweet sorghum on household farms for ethanol
- Jatropha on industrial scale with modern inputs
on marginal land for biodiesel but will have to
impact on current uses - Use of biodiesel for local electricity may
encourage people to cooperate in use of common
land - Finally, extension is happening ahead of RD
21Acknowledgements
- Prof. David Zilberman
- Prof. Alex Farrell
- Prof. Dan Kammen
- Prof. Udipi Shrinivasa
- Energy and Resources Group
- EBI
22Sorghum plot at Los Banos, Philippines
23Land for Industry
- Singur 400 hectares of agricultural land in the
State of Bengal was allotted to Tata Motors Group
for setting up a car factory - Led to massive protests, hunger strikes, etc.
- Land acquisition declared as illegal by the court
- Nandigram 5000 hectares of agricultural
allotted to Indonesian Conglomerate for setting
up a Special Export Processing Zone - Led to massive protests, police firing resulted
in the death of 14 villagers - Led to major review of SEZ policy