India’s push towards cleaner fuel has put ethanol in the spotlight. But behind this shift, many maize farmers say they are struggling. While ethanol prices are fixed and protected, maize prices remain uncertain, raising tough questions on policy balance.
Farmers who were encouraged to grow maize for ethanol production now say they are not getting fair returns. They were promised a role in building the country’s energy future, but many are still unable to even secure the Minimum Support Price (MSP) for their crop.
FIXED ETHANOL PRICE, UNCERTAIN MAIZE RATES
One of the biggest concerns is the difference in pricing. Ethanol has a fixed price of Rs 71.86 per litre, giving producers a stable return. In contrast, maize prices are left to the open market.
Farmers say this exposes them to price swings and losses, despite their key role in meeting ethanol blending targets.
MSP ON PAPER, NOT IN REALITY
The government has set the MSP for maize at Rs 2,400 per quintal. However, in mandis, farmers are often forced to sell at much lower rates. On April 24 this year, the average mandi price was around Rs 1,766 per quintal—well below MSP. Earlier in January, it had dropped even further to about Rs 1,663 per quintal.
With limited government procurement, farmers depend on traders and middlemen. Many say they have little choice but to sell at whatever price they are offered.
Ethanol producers are buying maize from the open market at lower prices, saving around Rs 600 to Rs 700 per quintal on raw material. At the same time, they sell ethanol at a fixed rate. This has led to a situation where factories see steady profits, while farmers face financial pressure.
PRODUCTION PUSH, BUT POOR RETURNS
In 2023, officials had called for a sharp rise in maize production to meet growing demand from the ethanol and poultry sectors. Farmers responded by increasing output to 43.4 million tonnes in 2024–25.
Despite this, prices have remained weak, leaving many disappointed.
Even after higher domestic production, India imported 1.07 million tonnes of maize during 2024–25. At the same time, more rice from government stocks was made available for ethanol production. This reduced the demand for maize, adding further pressure on prices.
Many farmers now say they feel misled. They point out that while the industry enjoys price protection, their crop is exposed to market risks. As a result, earnings remain uncertain even after increased production.
QUESTIONS OVER POLICY APPROACH
The situation has raised concerns about how benefits are being shared. Farmers argue that if ethanol prices can be fixed, similar support should be considered for maize.
For now, the gap between policy intent and ground reality continues to be a major concern.
