Ubharta Purvanchal conclave: Eastern UP's untapped mine lies above the soil

Crop residue, farmer collectives, and biomass industries can unlock fresh incomes, cleaner energy, and stronger agricultural value chains

Uttar Pradesh (UP), one of India’s leading agricultural states, has vast potential to harness its farm economy to realise its waste-to-wealth road map and contribute to the green economy, experts said at a panel discussion on Scope of Agriculture and Allied Industries in Purvanchal and Need for Environment-Friendly Industries at Business Standard’s maiden Ubharta (Rising) Purvanchal Conclave.

 

They said eastern UP, despite its predominantly small landholdings, fertile soil, and abundant biomass, could unlock higher farm incomes through collectivisation, farmer producer organisations (FPOs), commercial crops, and stronger links with industry. They added that technology adoption, better access to organised markets, and value addition would be critical to transforming the region’s agricultural economy.

 

 

UP Pollution Control Board Chairman Ravindra Pratap Singh said the state generates enormous quantities of biomass that was once treated merely as crop residue. “On average, 1 tonne of foodgrain produces 1.7 tonnes of farm residue, creating a huge economic opportunity through the biofuel value chain,” he said.

 

He said biomass can be converted into industrial pellets, compressed biogas (CBG), and electricity through small biofuel power plants. He also advocated village-level FPOs to aggregate biomass from small farmers with fragmented landholdings, making collection, transportation, and marketing commercially viable.

 

Praveen Gupta, director at Balrampur Chini Mills, said the company has built a resource-efficient business model across its 10 sugar mills in UP by optimising energy and groundwater use. It is also investing nearly ₹3,000 crore in a greenfield bioplastics plant in the state, which is expected to be commissioned by the end of this year.

 

The company has a combined crushing capacity of 80,000 tonnes per day and operates five distilleries producing ethanol for blending with petrol. Gupta said recent volatility in global oil markets has reinforced the importance of ethanol as a cleaner fuel that lowers carbon emissions while raising farmers' incomes.

 

He, however, flagged labour shortages as a growing challenge for agriculture and called for greater mechanisation and technology adoption. He suggested creating digital platforms, similar to ride-hailing applications, through which farmers could rent equipment such as sugarcane harvesters.

 

Gupta said the company also converts ash generated at its manufacturing units into potash granules that are returned to farms to improve soil health. Although Balrampur Chini Mills is headquartered in West Bengal, around seven of its 10 sugar mills in UP are located in eastern UP. He added that the company has commissioned a polylactic acid bioplastics plant under the brand name Bioyug to replace single-use plastics and credited the UP government for its support.

 

He said the sugar industry has evolved beyond sugar production into an integrated bioeconomy centred on renewable energy, ethanol, CBG, and sustainable materials. Such diversification has strengthened mills’ financial resilience while creating extra revenue streams for farmers supplying sugarcane. He added that similar models could be replicated across other agricultural value chains in Purvanchal through greater private investment, stronger logistics networks, and closer collaboration between farmers and industry.

 

Padma Shri awardee farmer Chandrasekhar Singh said agriculture would undergo real transformation only when farmers begin thinking like micro-entrepreneurs and shift towards commercial crops. He also advocated dedicated FPOs for organic farming to create a win-win model for farmers, consumers, and processors.

 

Drawing on his experience, Chandrasekhar Singh said farmers are keen to move beyond the wheat-rice cycle and adopt new crops and sustainable farming practices but are discouraged by limited market access and inadequate policy support. “Purvanchal is characterised by small landholdings, and the solution lies in collectives and cooperatives. For that to happen, people must set aside their egos,” he said.

 

Mithilesh Kumar, general manager, Bank of Baroda (BoB), stressed agriculture’s contribution to regional development, employment, and exports. He said the sector accounts for about 18 per cent of India’s gross domestic product, nearly 13 per cent of exports and provides employment to 45-55 per cent of the workforce.

 

He said BoB aims to become an agribusiness partner by supporting the entire agricultural value chain. While banks once focused mainly on crop loans and Kisan Credit Cards, the emphasis has shifted to evaluating farmers’ cash flows and financing allied activities that strengthen rural incomes.

 

Kumar also described eastern UP as a potential growth engine for the state’s economy, saying stronger investment in agriculture and allied sectors would create employment opportunities in food processing, logistics, and rural enterprises.

 

Lanka Ramesh, assistant general manager, Canara Bank, said small landholdings remain a major constraint to improving farm productivity. He said technologies such as drones and artificial intelligence could help address labour shortages while improving efficiency and reducing cultivation costs.

 

The panellists agreed that fragmented landholdings remain among the biggest structural challenges facing agriculture in eastern UP. They argued that greater collectivisation through FPOs, cooperatives, and self-help groups is essential to improve market access, raise farm incomes, and enable value addition.

 

They said stronger aggregation would also improve farmers’ access to institutional credit, modern farm machinery, storage infrastructure, and organised markets. FPOs, they argued, can help small growers negotiate better prices, reduce input costs through bulk purchases, and strengthen their bargaining power with processors and buyers.

 

Ravindra Pratap Singh observed that with most farmers cultivating less than a hectare, investments in mechanisation, biomass utilisation, and processing often become uneconomical. Responding to a question on shrinking farm sizes, he pointed to the Centre’s ambitious FPO programme as a practical solution. “Where agriculture is highly fragmented, farmers must come together. Producer organisations allow small farmers to achieve economies of scale,” he said.

 

He said the government aims to promote 10,000 FPOs across the country, backed by financial assistance for their formation, capacity building, and long-term sustainability. Aggregating biomass through village-level FPOs would generate sufficient volumes to attract industrial buyers, making the business commercially viable for small farmers.

 

He said the state’s abundant crop residue should no longer be viewed as waste but as a valuable raw material capable of supporting biofuel production, clean energy generation, and rural enterprises. Proper aggregation and supply chains, he added, could create an additional income stream for farmers while helping reduce pollution caused by the burning of crop residue.

 

Gupta said the sugar industry offers a successful example of organised farmer-industry partnerships through contract farming and structured procurement. Similar models, he said, could strengthen farmers’ bargaining power in Purvanchal by improving market access, securing better prices, and reducing transaction costs.

 

He said predictable procurement arrangements have enabled sugarcane farmers to invest in productivity while giving mills a reliable supply of raw material. Comparable partnerships in maize, chillies, and other commercial crops could deliver similar benefits to farmers across eastern UP.

 

While speakers acknowledged gradual progress in agricultural entrepreneurship and commercial cropping, they said eastern UP continues to lag national productivity levels in several crops because of fragmented holdings, limited aggregation, and weak market linkages.

 

Chandrasekhar Singh said many farmers are willing to diversify into higher-value crops but remain reluctant because of uncertainty over marketing channels and price realisation. He said expanding organised markets and strengthening links between farmers and industry would encourage greater adoption of commercial agriculture.

 

Kumar pointed to encouraging trends in rural credit, saying direct agricultural lending across the 19 districts under his jurisdiction had grown by more than 15 per cent, outpacing credit growth in the micro, small and medium enterprises (MSME) sector. Since agriculture supplies raw materials to several MSME industries, strengthening farm finance remains critical for broader economic growth, he said.

 

He said banks are increasingly financing allied sectors such as dairy, fisheries, and food processing to diversify rural incomes and reduce dependence on traditional crop cultivation. Greater financial inclusion, he added, would help accelerate investment in value-added agricultural activities.

 

The discussion also highlighted agriculture’s wider role in shaping inflation, rural demand, and industrial growth. The panellists said improving farm productivity and strengthening value chains would generate benefits that extend well beyond the agricultural sector.