Biodiesel in India: value chain organisation and policy options for rural development

Abstract

"This study aims to contribute to knowledge about biodiesel in India and to inform policy-makers about development impacts and appropriate policy choices. Its focus is on the potentials and risks for rural development. The study starts with an overall assessment of the economic viability of biodiesel. To date, biodiesel production is not a lucrative business, except for some niche markets. However, this may change in the future, depending on fossil fuel prices, government pricing policies, and progress on agricultural yields. Furthermore, the study contributes two novel aspects to the discussion on the Indian biodiesel sector: 1. It takes stock of the variety of existing ways of organising the value chain in India and assesses their pros and cons from a comprehensive development perspective; 2. It identifies, describes and assesses the appropriateness of a broad range of federal and state policies and support programmes. Given the diversity of value chain organization, many different policies are taken into account. Whether a state government chooses for example to promote social forestry, large-scale leasing contracts with corporations, or contract farming, and how effectively these policies are implemented, has a bearing on the development outcomes." (author's abstract)