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An Economic Assessment along the Jatropha-based Biodiesel Value Chain In India


  • Shinoj, P.
  • Raju, S.S.
  • Kumar, Praduman
  • Msangi, Siwa
  • Yadav, Pawan
  • Thorat, Vishal Shankar
  • Chaudhary, Khyali Ram


The Government of India had launched the National Biofuel Mission in the year 2003 as an initiative to limit the country’s dependence on crude oil imports. An integral part of this mission is the Biodiesel Blending program and Jatropha, a tree-borne biodiesel yielding crop, is the cornerstone of the program. This study has been specifically designed to carry out economic assessment of the upcoming jatropha-based biodiesel value chain in the country. The study, based on primary data collected from three major jatropha growing states, has observed that jatropha cultivation is an economically viable proposition in the long-run as indicated by favourable values of net present value, internal rate of return and benefit cost ratio. Nevertheless, initial government support till attaining break even point is crucial to sustain the interest of the farmers. The jatropha seed processing industry has been found to be viable if operated at sufficient economies of scale, which in turn is determined by the level of backward integration with the seed market and a forward integration with biodiesel distribution channels. However, the existing biodiesel value chain in India lacks this integration and is characterized by under-developed seed markets, sub-optimal processing infrastructure and ill-defined biodiesel distribution channels. The involvement of corporate players to participate in processing and distribution activities has further delayed the program to take off. The study has cautioned that unless proactive orientation of all the stakeholders is ensured, the program may fail to meet its objectives, at least in the medium-term.

Suggested Citation

  • Shinoj, P. & Raju, S.S. & Kumar, Praduman & Msangi, Siwa & Yadav, Pawan & Thorat, Vishal Shankar & Chaudhary, Khyali Ram, 2010. "An Economic Assessment along the Jatropha-based Biodiesel Value Chain In India," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 23(2010).
  • Handle: RePEc:ags:aerrae:96913

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    References listed on IDEAS

    1. J. S. Clancy, 2008. "Are biofuels pro-poor? Assessing the evidence," The European Journal of Development Research, Taylor and Francis Journals, vol. 20(3), pages 416-431.
    2. Ariza-Montobbio, Pere & Lele, Sharachchandra, 2010. "Jatropha plantations for biodiesel in Tamil Nadu, India: Viability, livelihood trade-offs, and latent conflict," Ecological Economics, Elsevier, vol. 70(2), pages 189-195, December.
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    Cited by:

    1. Timilsina,Govinda R. & Tiwari,Ujjal, 2015. "The economic viability of jatropha biodiesel in Nepal," Policy Research Working Paper Series 7295, The World Bank.
    2. Goswami, Kishor & Choudhury, Hari K., 2015. "To grow or not to grow? Factors influencing the adoption of and continuation with Jatropha in North East India," Renewable Energy, Elsevier, vol. 81(C), pages 627-638.
    3. Bryngelsson, David K. & Lindgren, Kristian, 2013. "Why large-scale bioenergy production on marginal land is unfeasible: A conceptual partial equilibrium analysis," Energy Policy, Elsevier, vol. 55(C), pages 454-466.
    4. Maja Slingerland & Marc Schut, 2014. "Jatropha Developments in Mozambique: Analysis of Structural Conditions Influencing Niche-Regime Interactions," Sustainability, MDPI, Open Access Journal, vol. 6(11), pages 1-23, October.

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