Ethanol blending creates ‘tension’ between food, energy security demands: Survey

The implications of ethanol-blending programme and expansion area under maize replacing other crops on food security are non-trivial, the Economic Survey, tabled in Parliament on Thursday, has found. Citing international experience, the Survey has cautioned that an increase in the cultivation of maize could result in further import of edible oil and an increase in food prices.

Noting that shifts in cultivation patterns are particularly visible in States such as Maharashtra and Karnataka, where maize increasingly competes directly with pulses, oilseeds, soyabean, millets, and cotton for land, water, and labour, the Survey said the expected reduction in paddy acreage, however, has not materialised. “From a food security perspective, the implications are non-trivial. Pulses and oilseeds are structurally important to India’s consumption basket and nutritional outcomes, yet they are shifting lower down the priority order for the nation’s cultivators,” the Survey said.

Over time, the Survey warned, this imbalance will 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 (self reliance) in energy and Aatmanirbharta in food. International experience underscores the importance of caution,” the Survey said.

The Survey said the blending programme has delivered “tangible gains” in crude oil substitution, reduced foreign exchange outflows, reduced emissons and increased payments to farmers. “As of August 2025, ethanol blending has saved India more than ₹1.44 lakh crore in foreign exchange and facilitated the substitution of about 245 lakh metric tonne of crude oil. As blending targets rise towards E20 (ethanol 20% petrol 80%), the programme has necessarily expanded beyond traditional sugar-based feedstock to include foodgrains, particularly maize. While this diversification has enabled rapid scaling, recent evidence suggests that administered ethanol pricing, interacting with underlying technological changes in maize cultivation, is increasingly reshaping agricultural incentives, with implications for crop diversity and food security,” the Survey said.

The national maize yield increased from approximately 2.56 tonne per hectare in 2025-16 to roughly 3.78 tonne per hectare by 2024-25.”Over the same period, yields for crops such as soybeans, sunflower seeds, rapeseed, peanuts, and millet, among others, have either stagnated or declined,” the Survey added.