Maize to be procured by govt at MSP to Meet biofuel requirements

The Indian government has approved a plan to purchase maize at federally fixed minimum support prices (MSP) and increase its production to meet the country’s growing demand for biofuels.

Maize, also known as corn, is crucial for ethanol production, which is blended with petrol, and serves as a significant component in poultry feed.

This strategic move aims to enhance farmers’ income and support the government’s initiative to achieve a 20% blending of petrol with ethanol by 2025-26. The food secretary, Sanjeev Chopra, emphasized that this plan becomes especially crucial amid expected reductions in sugar supplies this year.

The government intends to sell the procured maize to distilleries involved in ethanol production. Procurement, in this context, refers to the government’s acquisition of food commodities at MSP, a predetermined minimum price to prevent farmers from distress sales. The minimum rate for maize in the upcoming fiscal year is set at ₹2,090 per quintal.

Biofuels, including ethanol, are derived from sources like sugarcane and grains such as rice and maize. Currently, about 25% of India’s ethanol comes from cane juice, 50% from molasses, and the remaining percentage from grains like rice and maize.

A significant initiative is underway to procure maize at MSP, increase production, and enhance productivity through collaboration with the Indian Institute of Maize Research and the agriculture ministry. India presently produces approximately 36 million tonnes of corn annually.

The high-level interministerial committee overseeing the matter has given its “in principle” approval for the maize procurement initiative.

Bihar, one of the largest maize-growing states in India, will play a vital role in this program.

The plan includes the development of newer technologies and high-yielding varieties, along with expanding maize cultivation into areas traditionally used for rice cultivation.

State-backed food agencies such as NAFED and NCCF, as well as primary agricultural cooperative societies, will be involved in purchasing maize from farmers. The procured maize will be offered to distilleries at MSP plus market taxes, with all incidental costs borne by the food department.

The long-term objective is to shift from ethanol production primarily derived from sugarcane to incorporating grains like maize. Petroleum Secretary Pankaj Jain highlighted the intention to gradually transition from sugarcane-based ethanol to other sources.

In a related announcement, the government introduced measures to curb inflation in food articles, including prohibiting the use of sugarcane juice or syrup for ethanol production. This decision, prompted by an expected decline in sugarcane output due to erratic monsoons and drought in certain states, will not hinder India’s ambitious target of achieving 20% ethanol blending with petrol by 2025-26, known as E20, according to Jain.