Proposal in works to buy 100K tonnes of maize at minimum support price

Broad contours of the purchase plan have been discussed

With the supply of sugar looking tight with every passing month, the government is veering towards a proposal to make maize one of the primary items of feedstock in the ethanol-blending programme.
 

For this it is working on a proposal to procure a minimum of 100,000 tonnes of maize at the minimum support price (MSP) from farmers this year through state-supported agencies for distribution to distilleries.
 

Sources said the broad contours of the purchase plan were recently discussed by top officials and matters such as financial support to state agencies were deliberated upon.
 

Nafed, the National Cooperative Consumers’ Federation, and Primary Agriculture Cooperative Societies (PACS) are the agencies through which this annual procurement is proposed to be carried out.
 

The project is proposed to run for three years, sources said.

 

The move should give a big boost to the maize economy, which though supported by recent moves on using it as feedstock for ethanol production, has been under-exploited.
 

Maize prices, in the absence of assured procurement, have fluctuated widely in years of over-supply. This is a big discouragement for farmers who grow maize.
 

Maize, according to a report of the Parliament Standing Committee, gives the second-highest average ethanol yield at 380 litres per tonne. It comes after rice among the major feedstock items that are permitted for ethanol blending in India.
 

Experts have long advocated using maize for producing ethanol instead of other grains or even sugarcane because the latter are big water guzzlers. Maize requires less water and is climate-resistant, besides being a sturdier crop.
 

Moreover, compared to any other grains maize is not affected much by the “food for fuel” debate even if it is used for producing ethanol.
 

Though there has been a big improvement in maize production since 2019-20, it is still lower than the world standards.
 

Maize production in both the seasons (kharif and rabi) has jumped from around 29 million tonnes in the 2019-20 crop year to almost 35 million tonnes in the 2022-23 crop year.
 

India’s average maize yield is 4,000-5,000 kg per hectare while the world average is 6,000-8,000 kg.
 

The US has an average corn yield (maize is called corn there) of over 11,000 kg per hectare.
 

Recently, grain-based ethanol manufacturers approached Prime Minister Narendra Modi and the Ministry of Petroleum and Natural Gas to immediately direct oil-marketing companies (OMCs) to raise the procurement price of ethanol produced from damaged foodgrains and maize to ensure viability in consistent supplies.

This is because purchase prices of both damaged grains and maize have jumped in domestic markets while the rates at which they are being procured by OMCs haven’t been revised.
 

In the 2022-23 ethanol supply year, the procurement price of ethanol produced from damaged foodgrains fixed by the OMCs is Rs 64 per litre and that from maize is Rs 66.07 per litre.