The growth rule it exploits
Sugar cane grows to 3 blocks tall on grass/dirt adjacent to water. It grows unevenly — which is exactly what an observer detects: when the front block changes (cane reaching height 2), the observer fires a pulse.
The classic build, layer by layer
Rows of water channels bordered by dirt for cane, a raised observer facing each row at height-2 level, a piston behind each observer pointed at the cane’s second block, and hoppers or a water stream at the base collecting broken cane into chests. When the cane grows, observer fires, piston breaks the stack, cane flows to storage. Zero player input forever.
Scaling and paper economy
Stack modules side by side; a modest 2-row module produces stacks of cane per hour. Cane converts to paper (trading and books), sugar (brewing speed potions) and fireworks — with a library of lectern-rerolled librarians, an auto cane farm feeding paper trades is one of the strongest emerald engines in the game.