Rice use for ethanol may rise as maize, sugarcane acreage falls this Kharif season
Kharif maize acreage this season has fallen sharply across major producing states, with steep declines reported in Karnataka, Uttar Pradesh, Maharashtra, and Rajasthan
Sugarcane acreage has also declined this kharif season, adding to concerns over feedstock availability for ethanol production
The reduced availability of maize and sugarcane is expected to push the ethanol industry toward greater use of surplus rice sourced from central government stocks
Government rice reserves remain well above mandated buffer requirements, providing a cushion for continued diversion to ethanol
The shift comes as sugar prices have risen to record levels, and aligns with India's ethanol blending programme under the Ethanol Blended Petrol (EBP) initiative
Grain-Based Ethanol and Feedstock Diversification under the EBP Programme
India's Ethanol Blended Petrol (EBP) Programme originally relied almost entirely on sugarcane molasses. As blending targets rose, the National Policy on Biofuels, 2018 (amended 2022) widened the eligible feedstock basket to include maize, surplus rice, and other foodgrains, alongside cane juice and molasses. Grain-based ethanol — from maize and rice combined — now supplies roughly two-thirds of national ethanol production, with sugarcane-based sources making up the remainder.
Key Details
- National Policy on Biofuels, 2018 (2022 amendment): added damaged/surplus foodgrains as ethanol feedstock
- Grain-based ethanol (maize + rice): roughly 65% of national production; sugarcane-based: the remaining share
- Ethanol Supply Year (ESY), the industry's procurement-and-supply cycle, runs November to October
- India reached the 20% ethanol blending target within ESY 2025-26
A simultaneous fall in both maize and sugarcane acreage removes two of the three main feedstock pillars in the same season, forcing distilleries to lean more heavily on the third — surplus rice from government stocks — to keep meeting blending commitments.
FCI Buffer Stock Norms and the Open Market Sale Scheme (Domestic)
The Cabinet Committee on Economic Affairs sets minimum quarterly buffer stock norms for foodgrains held by the Food Corporation of India (FCI), reviewed as of April 1, July 1, October 1, and January 1 each year. These buffers exist to meet obligations under the National Food Security Act, 2013 (which entitles priority households to subsidised foodgrain) and other welfare schemes. Rice held above the buffer norm is classified as "surplus" and can be sold to industry, including ethanol distilleries, through the Open Market Sale Scheme (Domestic).
Key Details
- Buffer norm for rice: approximately 135 lakh metric tonnes (13.5 million tonnes), reviewed quarterly by CCEA
- Reported FCI rice stocks have run several times above this norm in recent years, providing the "surplus" sold for ethanol
- Legal basis for welfare entitlements: National Food Security Act, 2013 (covers up to 75% of rural and 50% of urban population)
- Surplus rice for ethanol is sold at a discount to the FCI's average acquisition cost, since ethanol distilleries are non-PDS bulk buyers
The government's ability to redirect rice toward ethanol without touching welfare-scheme supplies depends entirely on stocks staying comfortably above the NFSA-linked buffer norm — the "safety net" cited when maize and cane fall short.
Kharif Cropping Season and MSP-Linked Procurement
The kharif season covers crops sown at the onset of the southwest monsoon (roughly June-July) and harvested around September-October; it includes rice, maize, and sugarcane among major crops (sugarcane is technically a long-duration crop planted across seasons but is often tracked alongside kharif acreage data). The Minister of Agriculture, on CACP recommendations, announces Minimum Support Prices (MSP) for kharif crops before the sowing season begins, intended to guide farmers' cropping decisions; procurement is carried out by the FCI (for rice) and state/central agencies (for maize and other crops).
Key Details
- Kharif sowing window: roughly June-July (monsoon onset); harvest: September-October
- MSP for kharif crops is announced before the sowing season, based on CACP recommendations, approved by the CCEA
- Rice is procured primarily by FCI and state agencies; maize procurement is far more limited, leaving maize prices more exposed to market swings
- Acreage swings between crops reflect relative price signals — falling maize acreage often follows weaker realised maize prices relative to alternatives like soyabean, cotton, or pulses in the same kharif window
Because maize lacks the same scale of assured government procurement that rice enjoys, farmers are more likely to shift acreage away from it when relative returns weaken — which is consistent with the sharp state-wise maize acreage declines reported this kharif season.
Food Security vs Fuel Security Trade-off
Diverting rice, a staple food grain, toward ethanol production sits at the intersection of India's food security architecture (NFSA, 2013) and its energy/fuel security goals (EBP Programme). Rice is also a highly water-intensive crop, and large-scale diversion for non-food industrial use has raised ecological concerns around groundwater stress in surplus-producing states, in addition to food-price and welfare-supply concerns.
Key Details
- Rice cultivation is significantly more water-intensive per unit of output than maize
- The government maintains that only stock above buffer norms is diverted, with no impact on NFSA entitlements or food inflation, per official statements to Parliament
- The trade-off mirrors global "food vs fuel" debates seen with US corn-ethanol and EU biodiesel policies
- Ecological angle: continued paddy-heavy cropping patterns in water-stressed regions (e.g., Punjab, Haryana) intersect with the ethanol-driven demand for rice
The reported swing toward rice-based ethanol this season is a direct instance of this trade-off playing out — feedstock decisions made for fuel-security reasons carry downstream implications for cropping patterns, water use, and food-stock management.
- Kharif maize sowing (as of late July): 77.79 lakh hectares, down 9.7% from 86.15 lakh hectares a year earlier
- State-wise maize acreage decline: Karnataka ~34%, Uttar Pradesh ~37%, Maharashtra ~16%, Rajasthan ~3%
- Grain-based ethanol (maize + rice) share of national ethanol production: ~65%; sugarcane-based: remainder
- FCI rice buffer norm: ~135 lakh metric tonnes (13.5 million tonnes), set quarterly by CCEA
- India met its 20% ethanol blending target within Ethanol Supply Year 2025-26 (November 2025-October 2026)
- Feedstock allocation to ethanol (recent data): maize ~46%, FCI surplus rice ~22%, direct sugarcane juice ~16%, B-heavy molasses ~11%