Govt plans to redirect 90 lakh tonne FCI broken rice to ethanol industry from next year: Food Sec

The Centre plans to cut broken rice allocation under PDS to boost ethanol production, freeing 90 lakh tonnes annually. Sanjeev Chopra said the move aims to strengthen supply chains, support blending targets and reduce crude import dependence

New Delhi: The Centre is set to approach the Cabinet with a proposal to reduce the allocation of broken rice in grains distributed under the public distribution system from 25 per cent to 10 per cent, a move that would free roughly 90 lakh tonne of broken rice annually for the ethanol sector, Food Secretary Sanjeev Chopra said on Tuesday.

The move comes as global crude oil prices have jumped around 40 per cent in the past three weeks.

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Chopra said India’s ethanol blending in petrol has already reached 20 per cent, up from just 1.5 per cent in 2013, saving the country over Rs 1.63 lakh crore in foreign exchange and cutting crude imports by 277 lakh metric tonne since 2014.

The government is now looking beyond supply and focusing on getting more ethanol into the market, Chopra said, adding that raising the blending limit above 20 per cent, mixing ethanol with diesel, and promoting flex-fuel vehicles are all being actively considered, with decisions expected soon.

Speaking at the All India Distillers Association (AIDA) conference here, Chopra said the broken rice proposal would fix a long-standing problem- in 2023, a poor sugar harvest and fears over rice production had forced the government to restrict feedstock supply to distilleries, hurting the industry.

“Climate change is a reality. We need to make sure the supply chain is not disrupted. A steady supply of broken rice to the ethanol sector will help ensure that,” the food secretary said.

At present, broken rice comprises 25 per cent of the grains distributed free to around 80 crore people under the government’s food scheme.

Under the new plan, this would be brought down to 10 per cent. The extra broken rice from 360-370 lakh tonnes distributed each year would be sold through auction to ethanol makers, animal feed producers and others. A trial run has already been completed in five states.

From next year, the government will stop supplying whole-grain rice from Food Corporation of India (FCI) stocks to distilleries. Broken rice from the revamped food scheme will take its place as a reliable, year-round feedstock, Chopra said.

He also urged distilleries to speed up lifting of the current FCI rice allocation. Of the 52 lakh tonne set aside this year, only 21 lakh tonne have been picked up so far. A further 20 lakh tonne is available, but the discounted price expires on June 30.

Maize is being pushed as a second alternative feedstock, particularly varieties that grow on rain-fed land without irrigation. The agriculture ministry is developing high-yield varieties that can produce five to six tonnes per hectare. Around 40 per cent of ethanol supply already comes from grain-based sources, mainly maize, Chopra said.

India’s ethanol production capacity has grown from 420 crore litres in 2013-14 to nearly 2,000 crore litres today, with 650 crore litres added in just the past three years, he said.