Diversion of surplus sugar for ethanol production has improved FRP payments to farmers: Government
India’s ethanol programme has improved sugar mills’ financial viability, supporting timely FRP payments to sugarcane farmers. Surplus sugar diverted to ethanol rose to 35 LMT in ESY 2024-25, while maize use reached 131.1 LMT. The government said ethanol demand also improved maize farmers’ price realisation.
The diversion of surplus sugar to ethanol production has improved the financial viability of sugar mills, enabling timely payment of the Fair and Remunerative Price (FRP) of sugarcane to farmers, the Union Minister of State for Consumer Affairs, Food and Public Distribution, Nimuben Jayantibhai Bambhaniya, informed the Rajya Sabha in response to a question by MP Sumitra Balmik on the benefits reached to farmers through procurement of excess produce by ethanol manufacturing plants.
According to data placed before the House by the Department of Food and Public Distribution, sugarcane diverted in terms of surplus sugar for ethanol production stood at 43 lakh metric tonnes (LMT) in Ethanol Supply Year (ESY) 2022-23, before easing to 24 LMT in 2023-24 and rising again to 35 LMT in 2024-25. In the ongoing ESY 2025-26, up to June 30, 2026, diversion stood at 28 LMT.
Maize utilisation for ethanol production has risen sharply over the same period, from 8.3 LMT in 2022-23 to 75.4 LMT in 2023-24 and further to 131.1 LMT in 2024-25, before moderating to 67.9 LMT in the current ESY up to June 30, 2026, the data showed.
The Minister said sugarcane farmers had benefited from annual increases in FRP announced by the Government, which the improved financial position of sugar mills, aided by ethanol diversion, has helped sustain through timely payments. She added that the utilisation of maize for ethanol production had similarly helped maize farmers realise better prices for their crop, improving their overall financial position.
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Source : ChiniMandi
