Food Water Energy for Urban Sustainable Environments (FUSE)

Political Economy

FWE challenges under the political economy of the sugar industry in Maharashtra, India

Pune, one of our case study sites, is located in Maharashtra state, which is the leading sugarcane and sugar producing state in India. Sugarcane is the state’s biggest water user and plays a major role in the food and energy sectors. These particular challenges have a long history owing to political support for the sugar industry dating back to the 1930s. Therefore, in our case study of Pune, we assess water-food-energy challenges stemming from the sugar industry and contextualize them in the long-standing political economy of the sugar industry. For decades, the sugar industry has benefitted from economic supports to producers and consumers. These supports have led to four important consequences for water-food-energy security in the state and nation. First, as sugarcane has become the most profitable and secure crop for farmers in Maharashtra, sugarcane area has expanded and irrigation water use for sugarcane has increased. This has intensified competition for water within the agricultural sector and between the agricultural and domestic sectors in the state. Second, while more nutritious crops are left under-irrigated, sugarcane provides high income to farmers producing “empty-calorie” white sugar with consequences for human health. Specifically, sugar consumption negatively fuels India’s current food security challenges of micronutrient deficiency and the country’s emerging epidemic of diabetes. Third, low-nutrition white sugar has been historically subsidized by the government to boost sugar demand of the nation’s poor. Fourth, recently sugarcane-based ethanol production has tied together the food and energy economies by reducing surplus sugar and providing extra revenue to sugar mills. Ultimately the growth of sugarcane-based ethanol production could further stress water and land resources in Maharashtra. Together these and other considerations of political economy in Maharashtra provide major constraints on the ability of future policies to improve sustainability of the coupled water-food-energy system.

The state and central governments support both producers and consumers in the sugar industry.

This is a photo of a sugarcane field near Pune City. The surrounding rural area of Pune City intensively grows sugarcane. Photo by Ju Young.
This chart integrates a) Number of cooperative and private sugar mills and sugar production in Maharashtra; b) major phases of the sugar industry development; and c) Critical events to the sugar industry. The main takeaway is that the sugar industry in Maharashtra has grown over decades under various government interventions and this analysis provides a better understanding of the past and future trajectory of the industry.