Ex-situ Management of Crop Residue in Punjab: SomeInsights

Kamal Vatta
kmlvatta@yahoo.com; kmlvatta@gmail.com

The Status of Paddy Straw and its Management in Punjab• In Punjab, 70-80% of paddy straw is burnt

PADDY STRAW IN PUNJAB-2021

In-situ24%• Serious environmental issue
Ex-situ
6%
Burnt
70%

• GOI provided >1050 cr INR for in-situ
management• >76000 subsidized machines to the CHCs
and farmers

Source: NTPC India

Burning of paddy straw in Punjab
12000080%

84%

10000080000• Established 19,000 CHCs

54%79093

71304

37%

60000
102376
40000

67079

59684

20000

• Still the residue burning incidences
remain unchecked

56%
49%

50738

090%
80%
70%
60%
50%
40%
30%
20%
10%
0%

Yr-2016 Yr-2017 Yr-2018 Yr-2019 Yr-2020 Yr-2021
Number of fire incidences% paddy area burnt

Source: Govt. of Punjab

What adopters choose? Insights from a Field Survey
Quantity of PSM
Ex-Situ
16%
Shallow
Incorporation
49%

Ex-situ36%

Mulching
31%

In-situ64%

DeepIncorporation
4%

Adopter percentages

Source: PAU Survey, 2021

What adopters choose? Insights from Field Survey
W92%

PSM technique

W813%
W1
42%
W721%

Incorporation +Shallow

W64%

W53%

W211%

W42%

W32%

Incorporation +Deep

Mulching

CodeCombinations

W1

SMS + Super Seeder

W2

Stubble Shaver + Rotavator + Zero Drill

W3

Stubble Shaver + Disc Harrow + Cultivator +Planker + Seed drill

W4Disc Harrow + Cultivator + Planker + Seeddrill

W5

SMS + Chopper/Mulcher + Rotavator +Cultivator + Planker + Seed drill

W6

SMS + Disc Harrow + MB Plough + Cultivator+ Planker + Seed drillW7

SMS + Happy Seeder

W8

Conventional machines Approach

W9

SMS + other machines

In-Situ Choices
Source: PAU Survey, 2021

The Challenges of in-situ and ex-situ PSM
Delay innext
cropLongerdurationvarieties

Pests/
diseases

Very highinvestments

in-situmanagement

Expensive
andinadequate
machinery

Poor initialcropestablishment

Lack of highcapacityplantsCostly power
generation

ex-situmanagementHighsilicacontentHightransportation
costs
StorageproblemReasonResponse(%)

High Powered machinery

95-99%

Machinery not available
on rent

80-85%

Increase in cost ofproduction

97-99%

Non-availability of skilled
labour80-85%

Delay in operations

90-99%

Area under long-duration
varieties

2/3rdMachine availability(ha/machine)

53

Happy Seeder

683(7.8%)

Super Seeder

952(5.6%)

Source: PAU Survey, 2021

PSM Cost is a Deterrent: Understanding the Mechanism• No-burning options entail costs• For in-situ, costs are incurred on machinery
like Happy Seeder, Super Seeder, Rotavator,etc.
• For ex-situ, costs are incurred for baling of thestraw and its transportation• Comparison renders ex-situ less preferred• But there are differences in who pays for what.

• It needs to be understood properlyChannels for ex-situ PSM

Rising Demand for Paddy Straw in 2022: Reasons• The current prices of paddy straw: Rs 9000-12000/ton• Demand Push
• NTPC demand 2.5 million tons
• MSMEs have started using paddy straw in their boilers• GOI target of carbon neutrality (COP26) and co-firing target of 5-10%• Supply Pull
• Reduction in wheat straw due to decline in wheat yields• Farmers holding back paddy straw due to reduction in wheat straw• Gujjars also competing for paddy straw for animals• Delay in subsidies for balers and poor repair services• Increased burning incidences than beforeUnderstanding the Costs and Returns
An field example of 1000 ha capacity
Particulars

NumberOwn
Investment(Rs Lakh)

Subsidy(Rs Lakh)

Total
Investment(Rs Lakh)

Cutter

1.38

0.20

-

0.20

Raker

2.9

7. 49

1.62

9. 11

Baler

2.9

30.12

5.07

35.19

TractorTrailer

3.25

8.63

-

8.63

Total-

46. 44(87.41)

6.69(12.59)53.13(100.00)

Source: Vatta et al., 2022

Particulars
Thread cost

Value (Rs Lakh)
15.14

Fuel (Baling +raking + cutter)

9.75

Wages for labour

7.72

Transportation

5.79

Drivers’ salary

1.21

Repair and maintenance

0.87

Storage costs

0.18

Total variable costs
Fixed costs (depreciation (10%),interest on investment) (7%)
Total Costs
Total returns
Net returns

40.66
9.03

49.69
113.6363.94 (129%)

Comparing Different Types of Aggregators in PSM
Particulars
No. of balers
Operations

Co-operatives
1 (square baler)
Raking and baling

Farmer groups
5 (square balers)
Raking, baling and transportation

Investment

14 Lakh

1 CroreAgri-entrepreneur
20 (round balers)
Raking, baling, transportation andprocessing straw to Bio-coal.
Machinery – 6.8 Crore
Bio-coal plant: 20 crores per 10000 TPD
45000
135000Potential area of Op* (acres)
Potential Quantity$ (tonnes)
Actual area of Op (2021-22) (acres)
Actual Quantity $ (2021-22) (tonnes)
Payments to/from farmers

900
4500
2700
13500
250
2760
750
8280
Charges farmers Rs 2500/acre from Don’t charge farmers for raking andfarmer for raking and baling. Preferably baling. Charge Rs 500/acre forfarmer applies cutter (stubble shaver). cutting.

Purchasers

Gujjars only (farmers contact gujjars Gujjars, Industry (for combustion in Self-consumption to produce bio-coal forthemself, society engages in bailing boilers), Biomass power projects sale to NTPC (capacity of 10 tonne peronly)(electricity)day)
Gujjars pay Rs. 2500/acre and lift bales • To industry at Rs. 160/quintal. To NTPC at pre-contracted rate.
from the field.
• To gujjars at Rs. 2000-2500 andgujjars themselves arrange
Source: Vatta et al., 2022
lifting.
No scope and plans of expansion due to Significantly large expansion• Procure 5 times for new plant of 100
other engagements of society limited
tonnes per day capacity.
resources and limited staff.

Sale price

Future plans

No payments charged from farmers.

Ex-Situ Opportunities for Paddy Straw Management• Mission SAMARTH• Co-firing of thermal plants (5%-10%)• India needs 76 m tons of pellets for cofiring (5%) and 152 m tons (10%)• Co-firing in small industrial units• Ethanol Blending• 10% blending target by 2024 (achieved2022)• 20% target (2025-26)• Electricity Generation (13 plants in Punjab)• Biogas Plants (demand is rising)• Packaging Materials• Dairy Farming

https://8billiontrees.com/carbon-offsetscredits/new-buyers-market-guide/carbon-creditpricing/Ex-Situ Options and Value Generation
Ex-Situ Option

Output per
ton of paddy
straw (kg)Prices ofproduct(Rs/kg)

Total value
generated perton (Rs)

Bio-ethanol production

183

59.5

10860

Bio-gas generation

107

56.7

6090

Bio-coal manufacturing

500

9.04500

Use in paper industry andpackaging

900

1.61480Use as animal fodder

1000

1.01000

Bio-thermal energy (directburning)

111kWh

8.2910Source: Vatta et al., 2022

The Scenario of Value Generation through Ex-Situ PSM
Ex-Situ Option

Immediate Scenario

Long-term Scenario

Potential(m tons)

Value
Generation(Rs Crore)

Potential(m tons)

Value
Generation(Rs Crore)

Bio-ethanol production

1.01086

2.02172

Bio-gas generation

1.59133.5

2130

Bio-coal manufacturing

2.5

1125

8.03600

Use in paper industry andpackaging

0.574

1.5222

Use as animal fodder

2.02003.0300

Bio-thermal energy (directburning)

1.091

2.0

182

Total

8.53489(858)

20.08606(1991)

Own estimates, Vatta et al., 2022

Conclusions••••

Ex-situ management may emerge as potential and sustainable
solutionEx-situ has in-built incentive system for all the stakeholders
Carbon credit mechanism may strengthen incentives to induce
behavior change
The climate change may be another factor affecting PSM