Sugar Cane

Sugar cane (formerly reed, bamboo or papyrus) was added in the v1.0.11 patch. It can be found randomly on grass or dirt blocks that are near water and grows to a maximum height of three blocks (though an additional layer may be added manually by the player, or spawned during map generation). More sugar cane may be placed on top of them, and they will also support other blocks. There appears to be no pattern to the spawn algorithm. Sugar cane may occasionally grow in tundra Biomes, but is extremely hard to find because ice replaces nearly all water next to land. Sugar cane can also be found naturally underground, although this is very rare due to that it requires dirt blocks next to a subterranean lake.

Like cacti, removing the bottom part causes all parts above it to be removed as well, allowing for quick harvesting; one can also "shave" off the upper sections and leave the bottom section planted. It can be crafted into paper and sugar. Also like cacti, Bone Meal doesn't work on sugar canes and won't speed their growth.

Farming sugar cane is similar to farming crops. Like the real plant, sugar cane must be planted on a grass/dirt block immediately adjacent to water, unlike crops which can be within four blocks of water. Diagonal blocks, as well as blocks above or below the water stream, won't allow it to be placed. If it can be placed on a tile, it will grow there. Unlike wheat, it does not require a tilled field to grow. Planted sugar cane grows quickly to a height of three blocks, however, extra sugar cane blocks can be permanently added if heights over 3 are desired. This has not been confirmed yet, but they are thought to grow faster when the player is within a certain vicinity of them.

If the water source is removed, when the sugar cane next grow, the game will realize it has no adjacent water, and the sugar cane will disintegrate, leaving two sugar cane items instead of one. This is not as efficient as growing sugar cane normally, because you must replace the water supply to re-plant the sugar cane.

Sugar cane is completely fireproof. It can block lava flows, and, when lava hits it from above, the lava is spread out as by a normal block. Neither the sugar cane nor the block they stand on can be lit on fire with the Flint and Steel, although attempting this still lowers the durability of the Flint and Steel, in a manner similar to glass.

The water/lava blocking ability of sugar canes includes being placed in the middle of an existing flow (they still need to be adjacent to water).

Sugar cane will block projectiles as any ordinary block, which means projectiles shot at anything inside or past the sugar canes will be blocked. However, if you stand in a patch of sugar canes and fire arrows/throw snowballs, those projectiles will ignore the sugar canes where your head is located. A Ghast's fireball will not pass through sugar cane, but will collide with the sugar cane as if it is a normal block.

When planted underwater, sugar cane functions similar to sponge, creating an air pocket. However, it will be only 1x1x1 instead of 5x5x5. Also, if a sugar cane block is placed next to or on top of another sugar cane block, they will both be instantly destroyed if underwater, this will still drop the two sugar cane blocks that were destroyed as resources.

Trivia

 * You can walk through sugar cane, but water will not pass through it. This makes it a convenient material for water gates.
 * You can plant sugar cane on a tile covered in snow even if there is no water adjacent to it.
 * A glitch in Beta causes sugar canes to grow beyond the 3 block height limit.
 * Before Beta 1.2, sugar canes were officially called reeds. This name change was because Notch needed some way to craft sugar.
 * Ghasts cannot see through sugar cane, which would make it a safe block to make walls out of despite its transparent nature. Unfortunately, sugar cane cannot normally be planted in the Nether due to the lack of water.
 * Sugar cane has a small chance of spawning next to underground lakes, provided there is a dirt block it can grow on.
 * It has been tested and proven that sugar cane grows faster the more light there is, meaning a cave with more blocks of light then a cave with small amounts of light works better.
 * When farming, it is recommended to hit the middle block instead of the bottom, so you do not have to replant.
 * It has been shown that when holding sugar cane you can place the sugar cane on the side of an ice block.
 * In previous versions of Minecraft, Automatic Reed Farms could be made, as Reeds could be washed away with water currents, or instantly destroyed by removing the water adjacent to them. Since Reeds have become updated to Sugar Cane, neither of those techniques work. However if you remove the water adjacent to a fully grown Sugar Cane, and break it manually, all adjacent Sugar Canes will break with it, provided the water adjacent to them is also removed.
 * Sugar cane can be used underwater to provide air when underwater for extended periods of time. The technique is to rapidly place two blocks of cane directly at your feet, and a 1x1x2 pocket of air is created. If on flat land the cane will break and go back into your inventory and your air is replenished, but if on a ledge it will stay in place, giving a reusable air pocket.
 * At versions 1.2_01 and higher, reeds can grow to a height of 4 in multiplayer.
 * Sugar cane can be planted away from the water if planted on a block that is on fire (using flint and steel).