By Shobhanaben Mahendrasinh Baraiya, Member of Parliament

The Ethanol Blended Petrol (EBP) program is one of the foundations of India’s energy security and sustainability policies. With ethanol being produced using cereals (maize and rice) along with sugarcane as its key feedstocks, an apprehension that is questioned against the ethanol industry is that it forms a risk to food security. Nevertheless, it is faulty and not based in ground reality. Furthermore, India’s production of cereals far exceeds its consumption. Despite the abundance in the production of cereals, India has been aware of the need to ensure their distribution and readiness to all citizens. Holding on to such surplus stocks can be a challenge. Long-term holding of excess stocks in godowns may impose substantial costs on FCI and on the economy. These include an increase in storage costs, risks of spoilage, wastage of resources expended in growing cereals, as well as opportunity costs to the economy where such stocks could have been used for alternative essential purposes.

There are multiple solutions to these challenges. First, quality control processes can be further improved wherein poor quality grain, particularly that which may have become unfit for human consumption over time, is immediately identified. Indeed, a certain proportion of grain is always damaged during the harvest process, even if handling, logistics and storage infrastructure is of optimal quality. Such damaged / poor quality grain can be periodically diverted to alternative commercial uses such as ethanol manufacturing. Second, the storage and logistics infrastructure may be improved to reduce the risk of spoilage. Third, over the medium- to long-term, farmers may be encouraged to diversify their crops to prevent excess production of cereals such as rice.  

While some of these solutions would take time, immediate action is needed to manage the existing excess, particularly broken and damaged rice. Such rice may be usefully utilised by industries such as ethanol manufacturing. The ethanol industry relies on grain as its majority feedstock,^[1] currently comprising of maize, although historically it also used broken and damaged rice. If the industry were once given access to this rice, this would reduce both the maize import requirements and the pressure on maize prices.

In addition to damaged and broken rice, it should be noted that there is seasonal fluctuation of supply and demand for cereals. This often leads to excess procurement around harvest. In the absence of sufficient storage capacity, this rice can be diverted to other commercial applications such as ethanol.

India’s sufficiency in cereal production has been a significant achievement. This sufficiency should be managed effectively, with innovative use of surplus rice, including that which is broken, damaged or otherwise unfit for human consumption. In this context, instead of being a risk to food security, the ethanol industry is a boon to the agricultural sector, providing a source of revenue for cereals that can otherwise not be used or stored.

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