Discuss in detail about the recent fuel versus feed debate around ethanol production from Maize in India.
The diversion of maize for biofuel production has turned India from a maize surplus producer and exporter to net importer of the feed grain. This has created huge challenges in availability and affordability of domestic feedstock and also unsustainability in our biofuel targets.
Scenario of maize production and consumption in India:
- Till 2021-22, India’s maize output, at 32-33 million tonnes (mt), exceeded domestic demand of around 28 mt. It even left a surplus for exports, which touched 3.7 mt in 2021-22.
- Out of the 28 mt demand, roughly 20 mt was from the livestock feed industry. That included 15 mt for poultry (both broiler chicken and egg layer birds) and 5 mt for cattle feed. Another 5 mt was for industrial starch production, 2 mt for direct human consumption, and 1 mt for seed and other uses.
- The situation changed with maize also becoming a feedstock for making ethanol, a 99.9% pure alcohol that can be blended with petrol. Maize grains contain 68-72% starch and 1-3% of other carbohydrates (sucrose, glucose and fructose).
- While carbohydrates are the principal energy source for livestock, they can be fermented into ethanol, too, using yeast. One tonne of maize gives some 380 litres of ethanol; the process involves milling the grains into flour, breaking down the starch into shorter carbohydrate chains and fermentable sugars, fermentation (to 15% pure alcohol), distillation (to 94% spirit) and dehydration (to 99.9% fuel ethanol).
- In 2022-23, sugar mills/distilleries supplied 31.51 crore litres of ethanol produced from 0.8 mt of maize. In 2023-24, this rose to 286.54 crore litres, consuming 7.5 mt of maize.
- For the 2024-25 supply year (November-October), oil marketing companies have contracted 484.35 crore litres of maize ethanol. The corresponding maize requirement would work out to over 12.7 mt.
Impact of this change in maize consumption pattern on Indian Economy:
- The diversion of maize for biofuel has completely upset the demand-supply balance. The surge in demand from it has led to a shortage of grain and pushed up prices
- All-India average prices of maize have surged from Rs 14,000-15,000 to Rs 24,000-25,000 per tonne in the last four years, largely attributable to the ethanol-blended petrol programme.
- After ethanol is produced from maize and separated through distillation, the wet fermented grain mash that remains is further dried. It results in what is called DDGS – distiller’s dried grains with solubles. This residual byproduct is a protein-rich material that has emerged as an alternative livestock feed ingredient.
- Distilleries are currently selling DDGS from maize at around Rs 16,000-17,000 and that from rice at Rs 18,000-19,000 per tonne. This is as against ex-factory prices of Rs 31,000-32,000 per tonne for soyabean DOC, which has 45% protein.
- This had made the protein from soybean costlier to a marginal farmer.
- Feed makers are blending DDGS with soybean DOC to reduce production cost and offset the increase in maize prices. But the collateral impact is on soyabean, which is trading at Rs 4,300 per quintal, well below the government’s minimum support price (MSP) of Rs 4,892.
India’s Ethanol Blended Petrol Programme:
- The all-India average blending of ethanol with petrol has risen from 1.6% in 2013-14 to 11.8% in 2022-23.
- India’s goal is to grow this ratio to 20% by 2030, but when the NITI Aayog released the ethanol roadmap in 2021, that deadline was advanced to 2025.
- 20% by 2025-26 would mean producing some 1,000 crore litres of ethanol for blending with petrol.
Ways for rebalancing maize for feed and fuel in India:
- Approval for GM Maize: with a condition that it has to be used only for ethanol blending. So that remaining conventional Maize production can be consumed as food and feed.
- Destressing of Maize import: India now allows up to 0.5 mt of maize imports annually at 15%, with quantities beyond that attracting 50% duty. Also, it does not permit imports of genetically modified (GM) maize. Out of the 0.94 mt imported during April-January 2024-25, 0.51 mt was from Myanmar and 0.39 mt from Ukraine, which do not grow GM maize. Relaxation of this might increase maize supply in India.
- The government may have to take a considered decision on permitting duty-free imports, including of GM maize. This might help check soaring feed costs for poultry and dairy producers, but the interests of our maize and soyabean farmers cannot be ignored either.
- A win-win situation, he added, would be to increase domestic production of maize by boosting yields and diverting acreages from rice that is both water-guzzling and in surplus.
Agriculture is a source of food, feed, fibre and fuel. It is our skill to utilize this source for fulfilling all our needs in such a way that no aspect is harmed for a sustainable development.
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