Government Rules Out Resuming Subsidised Rice Sales for Ethanol Production

In a recent announcement, Food Secretary Sanjeev Chopra clarified that the government currently has no plans to resume the sale of subsidised rice to grain-based distilleries for ethanol production. This decision comes after the practice was halted in July of the previous year, amidst concerns over domestic rice output and high retail prices, alongside questions regarding the economic viability of such a policy.

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Chopra's statement was in response to inquiries about whether there might be a reconsideration of this policy, especially in light of anticipated declines in sugar production for the 2024-25 season (October-September). The discontinuation of rice sales for ethanol production was influenced by various factors, including apprehensions about domestic output and economic unviability.

Highlighting a significant shift in the government's approach towards ethanol production, Chopra mentioned, "This is not a policy which is cast in stone. This policy will be renewed... Maize is being encouraged for ethanol production." He revealed an impressive increase in ethanol production from maize, with about 50 crore litres supplied in the 2024-25 supply year. The industry, which has established grain-based distilleries, is now encouraged to utilize maize for ethanol production.

Sugar Production and Ethanol

Regarding concerns over a potential decrease in sugar output next season, Chopra stated that it is too early to predict any figures for sugar production for the 2024-25 season. The government will have a clearer understanding of the situation by August. He also noted that reservoir levels in Maharashtra and Karnataka are slightly lower than in previous years, prompting caution to ensure higher closing stock of sugar this season. This stock could be utilized not only for domestic consumption but also diverted for ethanol production if necessary.

In an effort to encourage sugarcane cultivation among farmers, the government has increased the fair and remunerative price (FRP) of sugarcane to Rs 340 per quintal for the 2024-25 season, up from Rs 315 per quintal this season. This move signals the government's intention to support farmers and ensure adequate sugarcane supply for both sugar and ethanol production.

The decision not to resume subsidised rice sales for ethanol production reflects a broader strategy to balance food security with the promotion of alternative sources like maize for ethanol production. As the situation evolves, particularly concerning sugar production, it remains to be seen how these policies will adapt to meet India's energy and agricultural needs.