Union government plans incentives to increase maize production

The government is aiming to increase maize production to achieve and sustain the target of 20% ethanol blending in auto fuels by FY25, given the limited scope for expanding sugar and grain areas. In the current season (October-September, 2022-23), the country’s sugar production is projected to decline by 9% on year to 32.5 million tonne (MT).

According to a senior official, the agriculture ministry will promote maize production through developing high yielding varieties which has higher recovery for ethanol in collaboration with Indian Institute of Maize Research. Distilleries would be working with the farmers for assured procurement of maize in the line with the sugar sector.

The official said that the petroleum ministry has also shown willingness to incentivize ethanol production from maize with a medium-term stable pricing policy on the matter.

Agriculture secretary Manoj Ahuja said on Tuesday that maize production in the country needs to be increased by 10 MT over the next five years which would meet growing demand for ethanol production and poultry feed. Maize output is estimated at 34.6 MT in the 2022-23 crop year (July-June), which is a marginal increase from 33.7 MT in the previous crop year.

While globally maize is the primary feed-stock for ethanol production, it is used in India mostly for animal feed and industrial use. The government has achieved 12% ethanol blending in auto fuels in the current year with production of 5,180 million litres.

More than 72% of ethanol production was achieved using around 4 MT of sugar – syrup, juice and heavy molasses – and rest from broken grains. “Use of sugar for ethanol has its limitations unless the area under sugarcane goes up, so we are looking to boost maize production,” a food ministry official told FE.

The official said on the lines of the sugarcane sector, distilleries need to support maize farmers and assure procurement of their harvest at MSP rate. According to official estimates, to achieve the target of 20% blending, around 16.5 MT of foodgrain would be required for production of 10,160 million litres of ethanol.

In the current sugar season (October-September), according to industry estimates, the sugar production is projected to decline by 9% to 32.5 MT from the previous year’s output of 35.9 MT, due to lower yield in Maharashtra and parts of Karnataka. The crop has been affected by adverse weather conditions like excessive rainfall and lack of sunlight during August-October season of last year.

The government has set a target of 6 MT of surplus sugar which would be diverted annually for ethanol production by 2025-26.

The production of ethanol and its supply to oil marketing companies (OMCs) rose by 973% to 4,080 million litres in 2021-22 from 380 million litres in 2013-14.

To reduce dependence on imported fossil fuel, the government had achieved the target of 10% blending of fuel grade ethanol with petrol by 2021-22.

Under the national policy on biofuels of 2018, the government had advanced the target of 20% blending of ethanol in petrol to 2025-26 from 2030.

Source: Financial Express