Context: Ethanol production from Maize has raised its prices, making livestock feed costlier and hurting soybean farmers due to cheaper feed substitutes. Thus, it has triggered a broader fuel vs. feed debate.
Relevance of the Topic: Mains: Biofuels: Food vs fuel debate.
Agriculture is a source of food, feed, fibre and fuel. Traditionally, crops like cotton were used for multiple purposes (lint, oil, cattle feed). Now, maize (corn) is being diverted increasingly toward making ethanol, a biofuel. This has brought the Fuel vs. Feed dilemma to the centre of India’s agricultural and energy policy.
Why is Maize used in Ethanol Production?
- Maize grains contain 68-72% starch and 1-3% of other carbohydrates (sucrose, glucose and fructose). Its high starch content (68–72%) makes it ideal for fermentation into ethanol, which is then blended with petrol to reduce India’s fuel import bill.
- One tonne of maize gives ~380 litres of ethanol, a 99.9% pure alcohol that can be blended with petrol.
- In FY23, sugar mills/distilleries supplied ~31 crore litres of ethanol produced from 0.8 MT of maize. In FY24, this rose to ~286 crore litres, consuming 7.5 MT of maize.
- For the FY25 supply year (November-October), oil marketing companies have contracted over 480 crore litres of maize ethanol. The corresponding maize requirement would be over 12.7 MT.
Impact of diverting Maize for Ethanol Production:
The large-scale use of maize for ethanol production has created significant ripple effects across multiple sectors:
- Price Surge: The diversion of maize for biofuel has completely upset the demand-supply balance. The surge in demand from it has led to a shortage of grain and pushed up prices. All-India average prices of maize have surged from Rs 14,000-15,000 to Rs 24,000-25,000 per tonne in the last four years.
- Feed Shortage: Reduced availability of maize for livestock feed (especially poultry and cattle). Poultry and dairy industries face rising production costs, affecting consumer prices and margins.
- Pressure on Soybean Farmers: Ethanol byproduct DDGS (Distillers Dried Grains with Solubles) is now used as a cheaper protein substitute in animal feed. This has reduced demand for soyabean DOC, leading to a 30% drop in soyabean prices. Farmers are selling below MSP causing income distress.
- Export Decline: Earlier maize surplus allowed exports (3.7 MT in FY22). With 12.7 MT maize now being diverted for ethanol, exportable surplus has vanished.
Stakeholder Demands:
- India now allows up to 0.5 mt of maize imports annually at 15% customs duty, with quantities beyond that attracting 50% duty. Also, it does not permit imports of genetically modified (GM) maize.
- The feed industry is urging the government to ensure affordable maize availability for livestock feed to control rising input costs. They are also demanding duty-free import of genetically modified (GM) maize, strictly for ethanol production only, not for food or feed.
- Soyabean Farmers demand price support interventions, higher procurement, and promotion of soy-based feed to protect income.
Way Forward
The government should adopt a balanced approach:
- Boost domestic maize productivity through better seeds, irrigation, and technology.
- Diversify ethanol feedstocks instead of over-relying on maize.
- Allow limited imports of GM maize exclusively for industrial ethanol use, with strict regulatory checks.
- Support soyabean farmers with MSP enforcement and encourage soy-based feed innovation.
Maize-Ethanol debate underscores the challenge of balancing energy security with food and feed needs. While ethanol production supports India’s green energy goals and offers price benefits to maize farmers, it must not come at the cost of livestock industries or other crop growers like soyabean farmers.
Also Read: What are biofuels?