How to reform India's ethanol-adjusted wheat rush farms and attract risks

Copyright © HT Digital Streams Limit all rights reserved. A worker dries maize at a grain market in Jalandhar on July 18, 2025. Farmers increased the area under maize by 19% due to the rising demand of ethanol manufacturers. (PTI) Summary farmers switch to profitable biofuels such as maize as demand for ethanol mixing grows. But is there a cost to pay? New -delhi: Abhishek Raghuvanshi smiles from ear to ear these days, literally thanks to wheat that becomes a large part of his life. In June, Raghuvanshi, a wealthy farmer of the Vidisha district in Madhya Pradesh, planted the crop in place of soybeans on a third of his family farm. It was a first for him. The reason: low soy prices. Wheat, also known as maize, offered hope. With the demand for the grain rising as a result of rising production of ethanol, a biofuels mixed with gasoline and the competitive demand of the poultry industry, which uses it as animal feed, Raghuvanshi joined a group of farmers from his neighborhood who switched to wheat. But the switch was not at all, taking into account some uninvited guests. Rodents planted on maize seed underground could sprout before them. Some plots had to be replanted. Raghuvanshi is now awaiting the dreaded wild pigs. These animals, which often weigh more than an overweight person (90-110 kg), will arrive as the wheat maturing. “I have to fence the field with electrical wires, because it’s the only way to stop them,” he said. Raghuvanshi explained that she decided to move away from soybeans is a calculated bet. Bean prices hang about £ 4.500 per quintal, almost the levels last seen in 2020. Wheat prices, meanwhile, have risen from £ 1,400 per quinting to more than £ 2,200 last year, an increase of more than 50%. “By replacing soy with wheat, I expect to earn £ 15,000 more on each field, net of all costs,” he said. On its 30 -acre wheat plot, which amounts to £ 4.5 lakh (to spend £ 50,000 on an electric fence, therefore looks a good investment). It is certainly not a one -time case of a farmer experimenting with a new crop. According to the Ministry of Agriculture, farmers in states sowed wheat on a record of 9.4 million hectares in the ongoing Kharif crop season, for which the plant began in June with the start of the monsoon. The wheat area is 19% higher than the average of five years and 12% higher at the year. Similarly, the area under sugarcane is up 9% (compared to the five -year -old average), while the rice is 7% higher. Which connects these crops – maize, rice and sugarcane – is that all three are now used to make ethanol (so it is known as ethanol feed). Maize alone contributed almost 43% to ethanol production in the continued ethanol supply year (ESY) 2024-25 to the end of July. The ESY runs from November to October. Along with rice, more than 60% of the ethanol was produced from grain-based nutrient in 2024-25. Although most likely to think that sugar cane is the primary feed for the production of ethanol, the share has dropped to 38%after a crippled crop last year. The heavy lifting done by maize pushed its prices higher, which asked more farmers to switch to this new fuel crop. E20 Moment July was an important month for the biofuels sector in India. At the end of the month, the average blend of ethanol became 19% for ESY 2024-25. This means that the average rate of ethanol mixing in gasoline was 19%between November 2024 and July 2025. Five years ago, the average ethanol mixing was only 8.1% (ESY 2020-21). India was temptingly close to achieving the E20 target to mix 20% ethanol in gasoline, months before the schedule. In 2022, the national biofuel policy advanced the target to reach E20 mixing by five years-from 2030 to ESY 2025-26. Currently investigating an inter-ministerial committee or India must instruct a higher E27 mix in the future. According to the government, the Ethanol Mixing Program (EBP) has helped India since 2014 to save £ 1.44 billion by replacing imported crude oil. Payment delays through sugar factories to reed growers are now history, with excess supplies derived from producing ethanol. Farmers have benefited from an additional source of income: Now they are not only Annadaata (food producer), but also Urjadaata (energy producer), the government said. In a statement last month, the Petroleum Ministry pointed out the environmental benefit: Ethanol mixing reduced carbon emissions by 74 million tonnes, equivalent to planting 300 million trees. According to the government, the Ethanol Mixing Program (EBP) has helped India since 2014 to save £ 1.44 billion by replacing imported crude oil. Payment delays through sugar factories to reed growers are now history, with excess supplies derived from producing ethanol. These are important achievements for a country that is very dependent on imported fuel. But this new -found success has been violated by vehicles owners over the reduced mileage and a larger wear and tear of older vehicles that do not meet E20 fuel. If you set aside these concerns, the government said that the use of ethanol only leads to a negligible decrease in fuel efficiency and to return to 100% gasoline, it will lose with profits such as pollution reduction, energy transition and farmer benefits. Grain-centered, meanwhile, is the ethanol pressure rejecting the farm. Experts have raised concerns outside the food and fuel debate (whether to deduce food crops to produce biofuels). The most important factor is: Farmers plant more grain and sugarcane and move away from crops such as oilseeds, pulses and cotton. While India is very dependent on imports for edible oils and pulses, it has recently made a net importer of cotton. Look at full image farmers plant more grain and sugarcane and move away from crops such as oilseeds, pulses and cotton. (Bloomberg) Currently, the E20 mandate seems to be a low fruit due to generous rain and overflowing grains. This may not always be the case. A deficit -mushon can place a wrench in the wheel of the ethanol mixing target. By the end of 2022, for example, India was forced to announce rice export restrictions after the rain of the deficit. These curbs were only fully removed in October last year. In addition, it must be seen how the country will meet the mixing goal in the coming years, as the demand for fuel will grow with increasing vehicle numbers, unless more users take to electric vehicles. Since the crop area is constant, the growing demand for ethanol will lead to a higher production of water -intensive grain such as rice and sugarcane? There are more: The Food Corporation of India (FCI), the government’s grain manager, offered 10.4 million tonnes of surplus rice for ethanol production for ESY 2024-25 and 2025-26. The bizarre part is that this rice is offered at a subsidized price of £ 22.5 per kg, at almost half of the economic costs for FCI. The government has a declared goal of crop diversification, but the ethanol mixing program leads to a more grain-centered production system, away from oilseeds and pulses, which will affect the nutritional quality of diet, Ajay told Jakhar, chairman of the Bharat Krishak Samaj, a farming bodies, and the former head of the Punjab Farmers Commission. Jakhar added that these forage crops use more subsidized fertilizers, chemicals and water to grow. The ethanol pressure is therefore a trade in future soil quality and water availability. Look at the full image file photo of Ajay for Jakhar, chairman of Bharat Krishak Sama. The data of soy planting data from the Ministry of Agriculture show that the food crop most affected by the growth in wheat surface is soybean. The area under the oilseeds is down 5.4% compared to the five -year average. The area under Tur or Pigeon nert, a wrist variety, is slightly lower. Cotton, where India has recently become a net importer, is with a staggering 16%. Farmers’ interest in soybeans has decreased for two reasons. First, India performs cheap soy oil from Brazil and Argentina at low duties. Indian farmers cannot compete with imported oil due to low productivity – about a third compared to their global counterparts, which plant genetically modified or GM soy. India imports oil extracted from GM soybeans – with the understanding that it contains no observable DNA or protein. This does not allow the import of soy dinner except under special circumstances, as in a period of deficit and price increase in 2021. Farmers’ interest in soybeans has dropped. India performs cheap soybean oil from Brazil and Argentina at low duties. Indian farmers cannot compete with imported oil due to low productivity. Secondly, the protein-rich remains after the extraction of oil from soybeans, known as De-Oiled Soy Cake (DOC), are a source of feed for the poultry industry. The price of DOC has dropped as the poultry industry uses cheaper DDGs (Distillers’ dried grains with solvents), a by-product of maize and rice-based ethanol production. Dinging prices of Doc, which accounts for almost 80% of soy by weight, are one of the reasons why bean prices are sorry. The poultry industry, which until recently was the largest maize consumer (as animal feed), has recorded a 50% increase in maize prices over the past five years, said Hatchakumar Shetty, general manager of Venkateshwara Hatcheries, a leading poultry business. “In this situation, the replacement of Soya Doc with cheaper DDGs has helped us indirectly,” he explained. Shetty added that maize prices are likely to remain benign this year as the government provides FCI rice and also lifted restrictions on the manufacture of ethanol from sugarcane juice. Future Risk India’s growing thirst for ethanol depends on the rain-feeding Kharif season, as all the forage crops are grown during this period. “Our estimates indicate that E20 mixing will require a crop area of ​​approximately 7.7 million hectares in 2025-26, approximately the total gross cut area of ​​Bihar. The land surface for growing nutritional crops is likely to cross by 2029-30 10 million hectares,” the Sainin, agricultural economy and founder chief at the Delhi-Based Arcus. said. The problem, Sainin emphasizes, is that the government wanted farmers to move away from rice to grow maize (to reduce the use of groundwater), but farmers are moving away from less water -intensive crops such as oilseeds, pulses and cotton. In addition, farmers plant maize during the spring season (February to June) as a third crop between the Rabi (winter) and Kharif (Monsoon) crop season. Spring maize needs large amounts of water, up to 20 irrigation cycles. In 2025, farmers planted spring maize on almost 0.9 million hectares, a staggering 40% increase compared to the average of the past five years. The situation is particularly alarming in Punjab, which is already experiencing severe groundwater exhaustion due to the addiction to the growth of rice. Sainin further said that the production of sugarcane in India is cyclical in nature, with yields that have a hit in the rainfall years. With the yields of the reed and a limited possibility of area growth, the pressure is likely to fall on grains such as maize and rice to produce ethanol. Trade Concessions Ethanol was an element in India’s continuing trade negotiations with the US. The country has forced India to buy ethanol, as India is reluctant to allow GM wheat and soy, due to the low productivity of domestic farmers and because GM technology is not yet allowed in food crops. In a workpiece by Niti Aayog, which was published in May and later withdrawn, India suggested that India could import GM soybeans, extract oil from it in the coastal areas and execute the meal or soy document. This, the Federal Thinktank said, will prevent the entry of GM feed and India still allowed WO rd to offer concessions to the US. The newspaper also suggested that India could allow access to GM wheat from the US to produce ethanol and ex Port the by -product (DDGS). It is understandable that ethanol manufacturers are opposed to the idea. “We are hopeful that the government will not import ethanol or GM wheat. It is critical to protect the importance of domestic industry and farmers,” said CK Jain, president of the Grain Ethanol Manufacturers Association, a lobby in the industry. In an assignment by Niti Aayog, published in May and later withdrawn, India suggested that India could import soybeans, extract oil from the coastal areas and carry out the meal or soy document. Jain said domestic entrepreneurs set up large capabilities, with the number of grain -based ethanol plants rising from about 30 in 2023 to nearly 400. Currently, India needs about 10 billion liters of ethanol for E20, while the combined production capacity of grain and sugar-based manufacturing is about 17 billion liters with another 5 billion liters of production capacity in the pipeline. “We are asking the government to adopt higher E27 mixing in the coming years, following the example of countries such as Brazil, and to encourage Flex fuel vehicles (which can work on higher mixtures of ethanol and gasoline),” Jain said. He further argued that India is a grain surplus land and can do manufacturers without rice to produce ethanol. Not everyone agrees. Jakhar of Bharat Krishak Samajaj said that if ethanol manufacturers had erected excess capacity, they should also bear the consequences. Or be ready to take a hit if crop supplies are limited. “The idea that nearly half of the food supply is burned in ethanol fuel is insane,” said Marion Nestle, a professor of nutrition and food studies at the University of New York, in a podcast in June. Nestle referred to the fact that near half of the wheat produced in the US is used to produce ethanol. India is not far. In ESY 2024-25, an estimated 14 million tonnes of maize are likely to be derived to make ethanol. It is near a third of annual production. Nestle’s words are a preconceived warning, as India decides on its future energy law: “It is so insane because it is a system designed for profit … it forces wheat to be grown in places where it should never be grown. Water is extracted … just to go into smoke.” Catch all the industry news, bank news and updates on live currency. Download the Mint News app to get daily market updates. More Topics #Long Read #Long Story Read Next Story