Cheap Rice-Based Ethanol Raises Questions Over India’s Food Security Mission
FCI rice ethanol
Use of rice to manufacture ethanol has gone up considerably in recent times.
Therefore, issues regarding the food security and nutrition programme in India have cropped up recently.
The use of rice is seen in tandem with sugarcane for ethanol manufacturing.
Further, issues regarding the effect of the increased ethanol production on sugar prices have already emerged.
Now, it has become a matter of debate regarding the impact of ethanol production on food security in the nation.
About 80 crore people depend on the national food security and nutrition programme in India.
Under this program, the Food Corporation of India acquires paddy from the farmers.
This procurement of paddy takes place at the minimum support price.
High Gap between the Price of Paddy Procurement and Ethanol Production
According to reports during the 2025-26 Kharif period, 69 million tonnes of paddy had been procured by the FCI.
At that time, the price of paddy procurement was Rs 3,889 per quintal.
As such, the price of paddy procurement is estimated to be around Rs 38.89 per kilogram.
The paddy is then converted to rice by the government.
The process is supposed to take the price of the rice to Rs 44 per kilogram.
However, the factories receive the rice for ethanol production at the price of Rs 23 per kilogram.
In this way, the food security system supplies rice for ethanol production at a relatively lower price.
Utilization of Rice for Ethanol Production Has Risen
The available data clearly indicates that there has been an immense increase in the utilization of rice in the process of ethanol production.
2023-24: 8.96 lakh tonnes
2024-25: 2.36 lakh tonnes
2025-26: 52.22 lakh tonnes
2026-27 till July: 23.42 lakh tonnes
Such a significant increase has further increased the concern for rice utilization for the production of ethanol.
Rice Based Ethanol is the Cheapest
As per the data of the Petroleum and Natural Gas Ministry, the cost of rice based ethanol is Rs 60.31 per litre.
Sugarcane based ethanol is priced at Rs 65.61 per litre.
Corn based ethanol is priced at Rs 71.86 per litre.
Thus, rice based ethanol proves to be cheaper than sugarcane and corn based ethanol.
This may further motivate the supply of rice by the FCI to ethanol manufacturers.
Concerns about Petrol-Ethanol Economics
The next issue is regarding the economics of mixing ethanol with petrol.
As per reports, the cost of crude oil is approximately $91 per barrel.
When all costs are added up, one liter of petrol costs nearly Rs. 55.
Hence, the issue of economics of mixing expensive ethanol with petrol has been raised.
This issue is not only of energy policies but of food security.
India has to tackle its problems regarding fuel and food at the same time.
Hence, the increase in rice ethanol has raised another debate.
