India's ethanol blending program, crucial for energy security, is reshaping crop priorities, with farmers favoring maize over pulses and oilseeds, risking food security. The Economic Survey 2025-26 warns of increased dependence on edible oil imports and food price volatility, highlighting a conflict between energy and food self-reliance.
India’s ethanol blending programme, though important for the country’s energy security, is raising risks for food security by reshaping cropping patterns, with farmers increasingly shifting land towards maize and away from pulses and oilseeds, the Economic Survey 2025-26 has pointed out.
Maize has rapidly emerged as a primary, yet controversial, feedstock for India’s ethanol program. Between Financial Year (FY) 2022 and FY2025, maize production grew at a compound annual growth rate (CAGR) of 8.77 per cent, while the area under the crop expanded by 6.68 per cent.
Over the same period, pulses saw a decline in both output and acreage, while oilseeds recorded only marginal acreage growth of 1.7 per cent annually. Cereals, excluding maize, grew at 2.9 per cent.
Pulses and oilseeds like soybean are central to India’s consumption basket and nutritional outcomes, yet they are shifting lower down the priority order for the nation’s cultivators, the Survey highlighted.
It warned that over time, this imbalance could risk entrenching India’s dependence on edible oil imports and exposing domestic food prices to greater volatility during supply shocks.
“This highlights an emerging tension between Aatmanirbharta in energy and Aatmanirbharta in food,” it said, calling the current trends as “early warning signals”.
Down To Earth has been reporting how the ethanol programme, while boosting maize prices and incentivising farmers, has raised critical concerns about energy security coming in conflict with food, animal feed, and nutrition security.
In major agricultural states such as Maharashtra and Karnataka, maize was displacing pulses, oilseeds, soybean, millets, and cotton, intensifying competition for land, water, and labour.
The Survey attributed these changes to price and demand signals created by the ethanol programme, which has boosted assured offtake and improved returns for maize used as biofuel feedstock. This has made maize more attractive than competing food crops.
India’s E20 ethanol-blending programme, aims to blend 20 per cent ethanol with petrol by 2025-26. Distilleries in India currently depend on first-generation (1G) sources (food crops and their byproducts), with rice, sugarcane and maize being the three main crops used as feedstocks. In recent years, maize has emerged as one of the main feedstocks of ethanol production.
With a higher price fixed for maize-based ethanol and an assured offtake by oil marketing companies, farmers shifted their agricultural area to the crop.
Between FY22 and FY25, the administered price of maize-based ethanol increased at a CAGR of 11.7 per cent, growing materially faster than ethanol derived from rice or molasses.
While boosting farmer income, this shift creates a ‘fuel vs feed’ dilemma, causing shortages for the poultry/cattle industry and potential threats to food security. The poultry and cattle feed industries, which consume 60-70 per cent of India’s maize, have also been facing tighter supplies.
Drawing on OECD-FAO assessments, the Survey noted that biofuel mandates in other major economies have altered cropping patterns and food price dynamics when not periodically recalibrated. Several countries have since imposed feedstock caps and shifted towards second-generation biofuels to reduce pressure on food crops.
The Survey called for a comprehensive roadmap that balances ethanol expansion with food security. This included accelerating yield improvements in pulses and oilseeds to restore their relative profitability, avoiding distortions in input and output markets that confer an undue advantage to specific feedstocks, and enabling targeted, planned growth of ethanol feedstocks aligned with regional resource endowments.