India’s Ethanol Drive Is Creating a New Food Security Crisis

August 24, 2026

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by R. Ramakumar (Frontline) The E20 campaign is pushing farmers towards maize, which is more profitable for distilleries, taking land away from pulses and oilseeds. If the trend continues, it could worsen India’s food security challenges and increase dependence on imports. -- ... Ethanol has to be made from something. The real question is what it is made from, and at whose cost.

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What it is made from
The raw material used to make ethanol is called the feedstock. India’s feedstock is almost entirely foodgrain, though it all began with sugarcane. Today, maize is the single largest source, and rice comes next. Rice is largely drawn from the buffer stocks of the Food Corporation of India (FCI).

Between 2022-23 and 2025-26, the area under maize rose from 10.74 million hectares to 14.41 million. These new areas of land did not come from nowhere. Varying across States, maize has displaced traditional rainfed crops, coarse cereals like minor millets, and certain oilseeds and pulses like soybean and ragi. In Madhya Pradesh and large parts of central India, maize has replaced soybean. In Karnataka, maize has replaced ragi, sorghum, groundnut, and minor millets. In Chhattisgarh, maize has replaced minor millets, horse gram, and local pulses. And in Punjab, the effort is to replace rice with maize.

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In another report published six months later, the same NITI Aayog identified the fall in area cultivated as an important reason for the fall in oilseed production. Its suggested strategy to close the gap in edible oil production was based on three pillars. The first of the three was to recover the land lost by oilseeds to cereals. If implemented in nine States, this strategy is estimated to add 7.36 million tonnes of oilseeds and reduce its imports by 2.1 million tonnes.

The problem, however, is that the NITI Aayog itself projects India’s maize demand to rise to between 86 and 109 million tonnes by 2047-48. In the first report referred to above, it notes that the demand for maize as a biofuel is expected to increase, and hence India must allocate more area to growing it. Maize is a cereal crop. Clearly, the suggestions in both the reports cannot be carried out on the same land. Neither report also explains how the choice is to be made.

In yet another strategy paper published by the National Academy of Agricultural Sciences (NAAS) in November 2024, the proposal was to take close to 10 lakh hectares of rice fallows in eastern India and cultivate maize there. These are the same fallow lands that the plan to expand edible oil production has earmarked for oilseeds.

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At present, India has a surplus of rice production. The NITI Aayog projects rice production to reach 154 million tonnes by 2047-48 while the demand for rice is projected at 113 to 114 million tonnes. Diverting a part of it into fuel may not rob anybody’s grain.

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Fuel made from crops is a sound idea. But there are also alternatives. A policy built on crop residues like straw and stalk may be desirable, if viable. But they do cost more at about Rs.120 per litre as opposed to about Rs.72 per litre from maize. Better technologies, if invested on, may shrink this difference in the future.

But in the short run, the government must act on four fronts. It should stop paying for cereal expansion when its own missions on pulses and edible oils are trying to reverse it. It should publish an honest account of the costs and benefits for everyone involved before moving ahead with the policy. The value of the stock of public grains sold to private plants must be transparently published. Finally, the maize farmer must receive a price as assured as the one received by the distiller, and guaranteed by a public agency.

Self-reliance was the promise that was made by the government’s ethanol policy. But self-reliance for who is indeed a question worth asking. READ MORE

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Excerpt from Hindustan Times: India’s ambitious biofuels programme is at a crossroads, not least because the country’s chief economic adviser, V Anantha Nageswaran, in a recent newspaper article, cautioned against moving to higher ethanol blends without proper assessments and even advocated bringing back the lower E10 blend for older vehicles. His warning is remarkable because it is rare for government economists to air views that don’t explicitly agree with current policy.

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Ethanol blending isn’t necessarily a bad policy. Done right, it can benefit farmers. In fact, it has benefited sugarcane growers by improving the ability of millers to make timely payments to them. However, it’s time the government thoroughly reviewed the blending programme and its longer-term impact on agriculture, food systems and the larger economy for three reasons.

One, the blending programme that began with the National Biofuel Policy 2018 has now entered a high-blend phase. In June, 48 retail outlets of public oil marketing companies started dispensing E85 for so-called flex fuel vehicles. This followed a draft notification of the road transport and highways ministry issued on April 27, 2026, allowing flex-fuel vehicles running on E85 and E100. There are no publicly available records of the rationale behind this sudden move up the ethanol value chain.

Two, a move to higher petrol blends is outside the scope of the National Biofuel Policy 2018, as amended in 2022. The government’s gazette notification, amending the biofuels policy and published on 15 June 2022, increases the blending percentage to E20 for petrol by ‘ethanol supply year 2025-26’ and biodiesel to 5% by 2030. It’s important to note that the April 27 draft gazette notification, which introduces E85 and E100, pertains to the Central Motor Vehicles Rules 1989, allowing flex-fuel vehicles, which can handle higher ethanol blends. It doesn’t amend the biofuel programme itself.

The third reason why a review of the biofuels programme is necessary, is to have an updated cost-benefit analysis at higher blends, drawing especially from data from the past seven years or so. It’s not helpful to have a dogmatic ‘crops are for food, not fuel’ position that biofuel critics hold. Surplus biomass can and should be converted to fuel if it is sustainable. However, the government ought to carefully weigh its current ethanol incentive structure, which is tilted towards two water-guzzling crops: sugarcane and rice.

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Corn can be a hardy alternative crop but its productivity is too low — four tonne per hectare compared to the US’s 13-14 tonne — to sustain higher ethanol demand. READ MORE

Excerpt from The Hindu Business Line: It is utilising the coarse cereal to create value for Indian agricultural reserouces, support energy security, says AIDA deputy director-general (DDG) Bharati Balaji

The ethanol industry is not competing with any specific sector for maize but is utilsing the hardy cereal to create value for Indian agricultural resources. It is also intended to support energy security and rural value chains, All India Distillers’ Association (AIDA) deputy director-general (DDG) Bharati Balaji has said.

“Current data also show that ethanol is drawing from a diversified basket that includes surplus FCI (Food Corporation of India) rice, damaged foodgrains and sugar-based feedstocks. Going forward, continued improvement in maize productivity, supply-chain efficiency, availability of alternative feedstocks and better alignment between agricultural output and industrial demand can help ensure that different end-use sectors are adequately supported,” she told businessline in an email interview.

Maize has become an important feedstock for ethanol, and its growing use reflects the expansion of India’s domestic biofuel ecosystem. At the same time, maize serves multiple sectors, including food, feed and industrial applications, so price movements are influenced by the overall balance between production, consumption, stocks, logistics and market demand, said the AIDA DDG.

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Rising contribution

The rising contribution of maize, surplus FCI rice and damaged food grains is significant because it demonstrates how India’s ethanol industry is evolving into a genuinely multi-feedstock ecosystem, rather than being dependent on any single agricultural resource, she said.

“By August-end, maize contributed around 345 crore litres, surplus FCI rice around 214 crore litres, and damaged food grains around 64 crore litres of ethanol. These volumes clearly demonstrate that alternative feedstocks are no longer marginal sources; they are becoming an important part of India’s overall ethanol supply chain,” said Balaji.

If the availability of one feedstock is constrained in a particular season or region, other feedstocks can help maintain continuity of ethanol production. “Maize is particularly important because it provides an additional agricultural pathway for ethanol production and can complement other feedstocks,” she said.

FCI rice utility

Similarly, surplus FCI rice provides a mechanism to productively utilise available foodgrain stocks, while damaged or non-food-grade grains that are unsuitable for human consumption can be diverted to industrial ethanol production. “This creates value from resources that may otherwise have limited alternative utilisation,” said the AIDA DDG.

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Capacity utilisation

“The key requirement will be to develop demand alongside production capacity. A predictable policy environment, greater end-use adoption and continued investment in supporting infrastructure can help ensure that the capacity created by the industry is utilised efficiently,” she said.

On the role of flex-fuel vehicles, CBG, SAF and other applications in creating additional avenues for ethanol utilisation, the AIDA DDG said they can play an important role in taking India’s ethanol ecosystem into its next phase.

“The reported move towards vehicles capable of operating on 100 per cent ethanol is another significant development because it demonstrates the potential for ethanol to move beyond conventional blending applications,” she said.

At the same time, scaling such technologies will require corresponding attention to fuel availability, retail infrastructure, vehicle adoption and standards.

The multi-feedstock flexibility is one of the key strengths of India’s ethanol programme. READ MORE

Excerpt from I Signal: Despite a record maize production last year, India’s poultry farmers are contending with higher retail prices of the poultry staple due to its increasing demand for ethanol blending. With a decline in sowing and deficient rainfall this year, experts say this is likely to get worse.

Maize was available to poultry farmers for Rs 12-14 per kg around the year 2019 but it now sells for Rs 27-28 per kg in the retail market. Since maize is the primary, starch-heavy food for all poultry and soymeal is the secondary food, farmers maintaining egg-layer and broiler poultry are both facing a crisis. They have to buy feed at these high prices and either pass on the cost to the consumer or bear the losses.

The contribution of maize towards ethanol blending increased from 0% in 2021-22 to around 37% in 2025-26. India’s move to blend 20% ethanol in petrol has been a subject of much discussion this past year after vehicle owners alleged damage due to the biofuel. Besides, when sugar prices surged recently, it led to debate on whether it was due to the Ethanol Blended Petrol programme. READ MORE

Excerpt from ChiniMandi:

India’s ethanol industry is not competing with any particular sector for maize but is using the crop to create greater value from domestic agricultural resources while supporting energy security and rural value chains, according to All India Distillers’ Association (AIDA) Deputy Director-General Bharati Balaji.

In an email interview with BusinessLine, Balaji said ethanol production was drawing on a diversified feedstock base that includes surplus Food Corporation of India (FCI) rice, damaged foodgrains and sugar-based feedstocks, alongside maize.

She said continued improvement in maize productivity, more efficient supply chains, greater availability of alternative feedstocks and better coordination between agricultural production and industrial demand would help ensure adequate supplies for different end-use sectors.

Maize has emerged as an important ethanol feedstock as India’s domestic biofuel ecosystem expands. However, the crop also serves the food, feed and industrial sectors, meaning its prices are influenced by the overall balance between production, consumption, stocks, logistics and market demand, Balaji said.

Grain feedstocks gain significance

The increasing contribution of maize, surplus FCI rice and damaged foodgrains highlights the evolution of India’s ethanol sector into a multi-feedstock ecosystem, reducing dependence on any single agricultural resource, according to AIDA.

By the end of August, maize had contributed around 345 crore litres of ethanol, while surplus FCI rice accounted for around 214 crore litres and damaged foodgrains for around 64 crore litres.

“These volumes clearly demonstrate that alternative feedstocks are no longer marginal sources; they are becoming an important part of India’s overall ethanol supply chain,” Balaji said. READ MORE