NEW DELHI: CONTRARY to the government’s claim of transforming farmers from food providers to energy providers, India’s ethanol production, particularly from maize farmers, is creating a crisis situation for farmers. The price of maize has dropped to nearly half of the fixed minimum support price (MSP), while the production cost of ethanol remains significantly higher than the established base price.
Ramapal Jat, president of the farmers’ organisation Kisan Mahapanchayat, highlighted the difficulties faced by maize farmers in the country. He explained that the price of maize has plummeted due to speculation regarding cheaper imports from the US, allowing ethanol manufacturers to profit significantly.
“The market price of maize has dropped to around Rs 900, which is well below both the MSP and the production cost,” he stated.
The government has set the MSP for maize at Rs 2,400 per quintal. One of India’s largest maize markets, the Nasrullaganj maize mandi in Madhya Pradesh, reported a price of Rs 1,121 per quintal, while Nahargadh mandi in Rajasthan recorded Rs 1,100 per quintal. In Bihar, which is the third-largest producer of maize after Karnataka and Madhya Pradesh, the price reported was as low as Rs 900 per quintal. However, the government’s estimated production cost for a quintal of maize is Rs 1,952.
“The benefits of ethanol production are being directly transferred to 779 industries, leaving farmers at the mercy of the market,” Jat said.
In the current market season of 2025–26, the government has announced plans to procure 1,048 crore litres of ethanol for blending with petrol in an 80:20 ratio, known as E20. Over 72% of this ethanol will be sourced from maize, while the remainder will come from sugar.
Currently, India produces 422.81 lakh tonnes of maize across 120.17 lakh hectares, which accounts for three per cent of global production, while the US contributes 35 per cent of the total output. There are widespread market speculations that similar to cotton, India may permit the import of cheap maize from the US, contributing to the price drop.
“Industries are taking advantage of the low prices to produce cheaper ethanol from maize and sell it to the government,” Jat remarked.
According to calculations by Kisan Mahapanchayat, the price of ethanol would be Rs 54.52 per litre based on a maximum maize price of Rs 1,821 per quintal.
Caught in the Maze
Price Crash
Maize has come down to Rs 1,121 per quintal in Nasrullaganj maize mandi in Madhya Pradesh, Rs 1,100 per quintal in Nahargadh mandi in Rajasthan, and as low as Rs 900 per quintal in Bihar
Elusive MSP
The government has set MSP for maize at Rs 2,400 per quintal, which is not realised in most mandis
Cost Mismatch
Officials estimate the production cost for a quintal of maize at Rs 1,952
Robust Production
The country produces 422.81 lakh tonnes of maize across 120.17 lakh hectares