Another Diwali, another unbearable spike in air pollution, health problems for a large section of the population, and public outcry. Deja vu. Must we reconcile ourselves to this annual phenomenon after harvesting the rice crop — of burning the crop residue in the agricultural fields in northern India? After all, the farmers will continue to grow rice and thus need to clear their fields for sowing wheat. This, in turn, will require them to burn the crop stubble. It is convenient and costs nothing. Nothing seems to have worked so far to end this practice. The smoke from stubble burning and the annual health crisis that results in large chunks of North India have been at the center stage for some years now.
There is, however, a simple solution that could solve the problem next year. For this to happen, decisions must be taken now. But, the solution is radical and would need a major change in our mindset. The government would have to assume direct and full responsibility. The solution is for the government to buy all the crop waste at a remunerative price. The farmer should get a reasonable margin over her cost of removing the crop residue from the field, bringing it to the mandi and selling it to a government-designated agency. She would respond to the price signal if it is sufficiently powerful. The entire crop waste would then come to the government. Farmers’ incomes would also rise a little. Nothing would be burnt in the fields next year.
Can the government do this? Very likely. The government is already buying rice through the Food Corporation of India (FCI), and the rice-purchase system is well-established and works smoothly. The same system can be used to buy all the crop waste that is brought by the farmer to the same mandi. It would, however, be a mammoth exercise, involving organizing the logistics of buying and storing the huge volumes of farm waste. The State alone can undertake this effort and succeed. There is enough time for the State to organize the system for complete purchase by next year. State governments have ample administrative capacity for such an exercise. This would, however, need a clear political decision. It has been a long time since the State assumed such a major, direct responsibility. But there is no other way of solving the problem.
But what would the government do with the enormous quantity of farm waste that it would buy? This is actually a valuable renewable source of energy and needs to be seen as one. The technology for converting this into pellets, which can function as a substitute for coal, is a robust and mature technology. There are private firms making pellets, which are successful even at a modest scale in the market. The National Thermal Power Corporation (NTPC) has successfully used these as a substitute for coal. The ministry of power has notified a 5% substitution of coal by pellets in thermal plants. The enabling regulatory framework exists.
The government would need to enter into a fixed-price contract for the conversion of crop waste into pellets with a large number of firms. The price should be so remunerative that a large number of firms come forward. Work should be allocated fairly and transparently among firms at the same predetermined price. This could be done on a first-come, first-serve basis. The quantities to be processed are so large that it should be possible to give work to all who come forward. Competitive bidding on price would not be a workable option to process all waste. Such an approach to getting work done on a large scale in a war-like effort has been used across the world. The conversion plants must be located near the mandis where the crop residue has been purchased to reduce transportation costs. The state governments would have to find land where the waste can be stored and converted into pellets. These plots of land would have to be offered at a nominal rent to the firms who are given the contracts for the conversion of the crop waste into pellets.
These pellets would need to be used. Since the quantities would be exceptionally large, only thermal plants can use the entire output of the pellets. The State would need to allocate these to the thermal power plants in North India with the directive to use these as a substitute for coal. The allocations should be done to minimize transport costs. The dispatch from the small, dispersed production units to the designated thermal plants would also have to be coordinated. The thermal plants may be directed to pay the full cost of these pellets — the cost of rice crop residue, the cost of converting crop residue into pellets, and transport costs. It is likely that this cost would be similar to what they are presently paying for thermal coal. So, the price of electricity would be impacted slightly at the most. There would be the added benefit of Coal India having to supply less coal to these thermal plants and being able to cater to other demands. Import of more expensive thermal coal would see a matching decline.
The whole cycle can then be sustained without the need for any subsidy. Nothing could be better. Only a large sum of working capital would be needed, along with the administrative resources required for such a huge exercise in which the central and state governments would have to work together. They would need to rise above their political differences, coordinate and work jointly to make this happen. The reward of clean air in North India would be well worth it.
Ajay Shankar is distinguished fellow, The Energy and Resources Institute (TERI), and former secretary, department of industrial policy and promotion, GoI.The views expressed are personal
