The Indian Food Ministry will soon seek the Cabinet’s approval for a scheme that will ensure maize farmers get a guaranteed minimum support price (MSP), while distilleries get assured uninterrupted supply of the raw material to produce ethanol.

Disclosing the plan, a Food Ministry source said the Committee of Ministers has in-principle approved the scheme whereby cooperatives Nafed and NCCF will procure maize directly from farmers at MSP. They will, in turn, sell the produce to grain-based distilleries at MSP plus mandi tax. The incidental expenditure incurred by NAFED and NCCF, seen at maximum 10 per cent, will be borne by the Government.

Food Secretary Sanjeev Chopra revealed the plan at a media briefing. He said the Agriculture Ministry is working with the Ludhiana-based Indian Institute of Maize Research (IIMR) to come out with a scheme to increase productivity and production from the current 36 million tonnes.

The game-plan

Source said under the plan, cooperatives will first register farmers who will be interested to join the programme and will ask for the requirement from the distilleries before sowing starts. On the basis of the demand, farmers will be motivated to grow maize in some particular size to get the required quantity with the assurance to buy from them at MSP. Distilleries will have also to commit to pay the rates to the cooperatives in advance so that there is no cash credit requirement arise.

“Mostly the purchase is likely to happen in States where farmers do not get even MSP and sell cheap. It will be a pilot initially likely to be rolled out in Kharif next year with a target to buy minimum 1-2 lakh tonnes. But all depends on market rates,” a source said.

The all India average mandi price of maize during October-November of 2023 was ₹1,951/quintal, which is 6.7 per cent lower than its MSP of ₹2,090, according to official data. Maize farmers in Madhya Pradesh, Chhattisgarh, Rajasthan, Uttar Pradesh, Odisha had received rates below MSP. But during first week of December, the average price has increased to ₹2,038/quintal.

Focus on the hardy crop

In Karnataka, the biggest producer of kharif maize, the average rate was 3.5 per cent higher at ₹2,163/quintal in October-November and ₹2,197 now.

To achieve the 20 per cent ethanol blending with petrol (EBP) programme, the focus on maize, a hardy crop that can withstand drought, started from 2022 and it further attracted policy attention after FCI stopped ₹20/kg rice supplies to distilleries. There are about 120 grain-based distilleries in the country which use rice/maize as feedstock for making ethanol.

“We are coming into that phase of the EBP programme where we will focusing on much more on maize. The simple reason is we do not have much area under cultivation of sugarcane,” Petroleum Secretary Pankaj Jain said.