Gadkari Urges Sugar Mills to Diversify into Bio-Energy, Warns Plain Sugar Future Uncertain

Union Minister for Road Transport and Highways Nitin Gadkari has said that futuristic technology and a forward-looking vision are essential to make agriculture economically viable and rural India prosperous. Speaking at the National Efficiency Awards ceremony organised by the National Federation of Cooperative Sugar Factories, he argued that standalone sugar production is no longer economically sustainable given global market dynamics and higher domestic production costs.

Gadkari urged sugar mills to aggressively diversify into by-products such as compressed bio-gas (CBG), ethanol, bio-manure and sustainable aviation fuel. He noted that India produces 300 to 350 lakh tonnes of sugar against domestic consumption of 280 to 300 lakh tonnes, which depresses prices. Competing producers such as Brazil, he said, make sugar at Rs 23 per kg, compared with India's Rs 33 to Rs 34 per kg.

"The future of plain sugar is mediocre at best," the Minister said, adding that diversification into complementary by-products guarantees a strong future. He said by-product utilisation would eventually allow mills to pay farmers up to Rs 6,000 per tonne of sugarcane, against the current Rs 4,000.

Highlighting the scale of India's fossil fuel import bill, Gadkari said Rs 22 lakh crore is spent annually on importing petrol, diesel and gas. Converting agricultural waste into CBG instead of dumping it on road embankments would reduce these imports, he said.

He pointed to the country's large agricultural residue output, including 220 lakh tonnes of paddy stubble in Punjab and Haryana. Five tonnes of stubble yield one tonne of CBG, offering a permanent solution to stubble burning and air pollution while generating rural wealth, he said. Technology now allows CBG production from stubble, bamboo, rice straw, bagasse and Napier grass, he added.

According to the Minister, 1,908 CBG plants have been registered nationwide, with 132 already operational. National CBG potential stands at 50,000 tonnes per day, while current production covers barely two per cent of capacity. The government has mandated procurement obligations at a fixed price of Rs 106 per kg, an initiative he said could inject Rs 2.5 lakh crore into the rural economy and create up to 15 lakh jobs.

Gadkari also urged the sugar sector to adopt artificial intelligence, precision farming and agricultural drones to cut input costs and raise yields. He cited the policy decision to allow ethanol production directly from corn, which he said transferred Rs 45,000 crore directly to farmers in Uttar Pradesh and Bihar.