Can India balance ethanol ambitions with livestock sustainability?
India’s E20 blending push is boosting grain-based ethanol production, with maize contributing over 42% of supply in 2023–24. However, rising diversion of maize to ethanol is tightening domestic grain availability. This is increasing feed costs for poultry and livestock sectors, raising concerns about balancing fuel self-reliance with food and feed security.
India’s pursuit of energy self-reliance has begun reshaping the agricultural economy in measurable ways. The accelerated rollout of the E20 blending programme has driven a sharp expansion in grain-based ethanol, with maize contributing 42.74 per cent of total ethanol production in the 2023–24 supply year. This shift has strengthened energy security and reduced dependence on imported crude, reinforcing the broader goal of Aatmanirbharta. Yet the same momentum has tightened domestic grain balances and altered cropping incentives. As maize flows increasingly toward fuel, policymakers must confront a pressing question: Can fuel self-reliance be sustained without straining feed availability and livestock sustainability?
The most immediate pressure point is maize. Traditionally used as a primary energy component in animal feed, maize has become an attractive ethanol feedstock due to stable procurement policies and assured pricing. Industry estimates indicate that maize diversion to ethanol rose from about 1 million tonnes in 2022–23 to roughly 7 million tonnes in 2023–24, with projections of further growth as new grain-based distilleries come online. This assured offtake has subtly altered market behaviour, keeping maize prices firm even during high-yield seasons and limiting the cyclical relief feed buyers once relied upon.
India’s poultry industry consumes close to 60-70 per cent of domestic maize output, making it highly sensitive to supply shifts. Feed accounts for the majority of production costs in poultry and dairy operations. When maize prices rise, the cost escalation quickly transmits through the value chain, affecting egg, milk, and meat prices. Maize prices have increased significantly in recent years, reflecting tightening supply and competing demand from ethanol producers. For poultry farmers operating on thin margins, sustained price firmness translates directly into cost pressures that ripple through retail food prices.
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Source : The Hindu Business line
