Atmanirbharta in fuel must strengthen India’s food security

Source: The post “Atmanirbharta in fuel must strengthen India’s food security” has been created based on “Atmanirbharta in fuel must strengthen India’s food security” published in “Indian Express” on 31st August 2026.

UPSC Syllabus: GS-3 – Economy

Context: India’s ethanol blending programme has made rapid progress, rising from 1.53% in 2013-14 to about 20% in 2025-26. However, the recent sharp rise in sugar prices highlights the emerging food-fuel trade-off and the need to recalibrate the ethanol policy.

Challenges

1. Tightening sugar supplies: Opening sugar stocks fell from 8 MT to 5 MT, while sugar production in 2025-26 is expected to decline from the initial estimate of 34.3 MT to around 28-29 MT.
2. Diversion of sugar: Around 2.75 MT of sugar was diverted for ethanol, aggravating the shortage when sugar supplies were already tight.
3. Highly regulated value chain: Government control over sugarcane pricing, sugar sales, imports, exports and ethanol feedstock allocation reduces the ability of market signals to correct shortages.
4. Limited imports: Allowing only 1 MT of duty-free raw sugar imports may not be sufficient to rebuild stocks before the festive season.
5. Rice as an alternative: Excess FCI rice stocks can be used for ethanol, but such diversion must occur only when there is a genuine surplus.
6. Maize productivity constraint: Maize is a better feedstock due to its lower water requirement, but India’s productivity is only around 3.5 tonnes/ha, compared with about 11 tonnes/ha in the US.
7. Impact on livestock sector: Greater use of maize for ethanol can raise maize prices and increase the cost of poultry meat, eggs and milk, since maize is an important feed.
8. Thus, shifting from sugar to rice or maize does not completely eliminate the food-fuel trade-off.

Way Forward

1. The government should import adequate sugar, preferably around 3-4 MT of refined sugar, and reduce the import duty on refined sugar from 100% to zero or around 5% temporarily.
2. Sugar-based ethanol should be reduced temporarily during periods of tight sugar supply.
3. FCI rice should be used for ethanol only when genuine surplus exists, while ensuring at least the procurement price is recovered.
4. Maize should be promoted as the preferred long-term feedstock, along with investments in irrigation efficiency, better seeds, technology and productivity enhancement.
5. India should undertake a 360-degree evaluation of the ethanol programme, including the net energy balance and environmental impact of different feedstocks.
6. Oil marketing companies should receive greater flexibility to choose economical feedstocks, subject to safeguards for food security, farmers and the environment.
7. Imported ethanol should act as a safety valve, and blending may be temporarily reduced from 20% to around 15% when domestic feedstock shortages threaten food prices.

Conclusion:Ethanol blending is important for energy security, import reduction and fuel self-reliance, but food security must remain the higher-order priority. Therefore, India’s Atmanirbharta in fuel should be designed to strengthen, not undermine, food security, with strategic buffers, flexible feedstock use and higher maize productivity.

Question: Atmanirbharta in fuel is important for India’s energy security, but it should not come at the cost of food security. Discuss the challenges associated with India’s ethanol blending programme and suggest a way forward.

Source: Indian Express