Maize for Ethanol Production: Fuel vs Feed crisis

Syllabus: Biofuel

Source: IE

Context: The rapid diversion of maize for ethanol production in India has triggered a Fuel vs Feed crisis, forcing dependence on imports and raising concerns over genetically modified (GM) maize use for biofuel.

• India’s maize ethanol demand surged from 0.8 MT in 2022-23 to 12.7 MT in 2024-25, significantly reducing feed grain availability.

About Maize for Ethanol Production:

What Are Biofuels?

• Biofuels are renewable fuels derived from biological materials like crops, waste, or residues used as substitutes for petrol and diesel.

• They help reduce dependence on fossil fuels and mitigate greenhouse gas emissions.

Food Crops Powering Biofuel:

• Maize and sugarcane are the primary feedstocks for ethanol in India.

• 1 tonne of maize yields ~380 litres of ethanol; 7.5 MT of maize produced 286 crore litres in 2023-24.

• Post-fermentation residue (DDGS) from maize is used as animal feed, but not a full substitute for lost grain volume.

• India is the 5th largest ethanol producer, with 10% blending target moving to 20% by 2025 under the Ethanol Blended Petrol (EBP) Programme.

The Food vs. Fuel Dilemma:

• Disrupted Grain Balance: Before 2021-22, India produced 32–33 million tonnes (MT) of maize, with domestic demand at only 28 MT, allowing surplus for exports. With 7 MT maize now diverted to ethanol production (2024-25), the balance is broken, making India a net importer of maize. Prices surged from ₹15,000 to ₹25,000 per tonne, affecting both consumers and industries relying on maize.

• Before 2021-22, India produced 32–33 million tonnes (MT) of maize, with domestic demand at only 28 MT, allowing surplus for exports.

• With 7 MT maize now diverted to ethanol production (2024-25), the balance is broken, making India a net importer of maize.

• Prices surged from ₹15,000 to ₹25,000 per tonne, affecting both consumers and industries relying on maize.

• Feed Shortages for Poultry and Cattle: Livestock feed (especially poultry and dairy) consumes over 20 MT of maize annually. The grain shortage has created a supply crisis for feed industries, who are now demanding import of genetically modified (GM) maize for exclusive ethanol use to protect feed availability.

• Livestock feed (especially poultry and dairy) consumes over 20 MT of maize annually.

• The grain shortage has created a supply crisis for feed industries, who are now demanding import of genetically modified (GM) maize for exclusive ethanol use to protect feed availability.

• Price Distortions in Soy Market: Post-ethanol processing, maize yields Distillers’ Dried Grains with Soluble (DDGS), a protein-rich byproduct. While DDGS offers cheaper protein (₹16,000–₹19,000/tonne), it undercuts soybean De-Oiled Cake (DOC), causing prices to fall from ₹32,000 to ₹22,000/tonne. Consequently, soybean trades below MSP (₹4,300 vs. ₹4,892), harming soybean farmers’ income stability.

• Post-ethanol processing, maize yields Distillers’ Dried Grains with Soluble (DDGS), a protein-rich byproduct.

• While DDGS offers cheaper protein (₹16,000–₹19,000/tonne), it undercuts soybean De-Oiled Cake (DOC), causing prices to fall from ₹32,000 to ₹22,000/tonne.

• Consequently, soybean trades below MSP (₹4,300 vs. ₹4,892), harming soybean farmers’ income stability.

• Global Parallels: The S. Renewable Fuel Standard (RFS) diverted over 40% of corn to ethanol, triggering global price hikes during crises like 2007–08, 2010–11, and 2022. Similar biofuel mandates across countries intensified food price inflation and triggered trade restrictions, worsening global food insecurity.

• The S. Renewable Fuel Standard (RFS) diverted over 40% of corn to ethanol, triggering global price hikes during crises like 2007–08, 2010–11, and 2022.

• Similar biofuel mandates across countries intensified food price inflation and triggered trade restrictions, worsening global food insecurity.

Way Forward:

• Balanced Blending Targets: Introduce flexible ethanol blending policies with “off-ramps” temporary suspension mechanisms during food/feed inflation.

E.g. EU and Brazil lowered blending mandates in 2022 to ease domestic food inflation.

• Promote 2G and 3G Biofuels: Shift to non-food feedstocks like agri-waste, crop stubble, used cooking oil, and cellulosic biomass.

E.g. Used cooking oil now makes up 21% of global biodiesel feedstock, easing pressure on food crops.

• Rationalize Import Policy: Permit duty-free GM maize imports solely for ethanol use, with non-diversion safeguards (not for feed or seed).

• Support Feed Industry: Create a national feed buffer stock and subsidize low-cost protein alternatives like DDGS, oilseed meals, and insect-based proteins for poultry and cattle industries.

• Protect Farmer Interests: Ensure strict enforcement of Minimum Support Prices (MSP) for soy and maize to prevent farmer distress. Encourage crop diversification and direct benefit transfers to maintain agricultural income amidst policy transitions.

• Encourage crop diversification and direct benefit transfers to maintain agricultural income amidst policy transitions.

Conclusion:

Agriculture provides 4 F’s – food, feed, fibre, and fuel, but the growing biofuel push raises trade-offs in resource allocation. Ethanol supports clean energy goals, yet it must not undermine food and feed security. A flexible, research-driven policy focused on advanced biofuels is essential for balanced growth.

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