India’s Food Corporation sells rice to ethanol plants at below‑cost prices

The Food Corporation of India (FCI) transferred about 6.3 million tonnes of rice worth ₹14,596 crore to ethanol distilleries during June 2025 – June 2026 at prices of ₹2,250‑₹2,320 per quintal, roughly 40 % lower than its average acquisition cost of ₹3,720‑₹3,889 per quintal. Haryana received the largest share (844,141 t), followed by Uttar Pradesh, Punjab & Himachal Pradesh, West Bengal and Madhya Pradesh. The Ministry of Food and Public Distribution said no direct subsidy is provided to ethanol makers and that two cases of illegal rice diversion were detected, leading to permanent suspension of allocations to the involved distilleries.

A parliamentary reply clarified that the diversion of surplus broken rice for ethanol does not affect food‑price inflation because sales are made only from excess stocks after maintaining required buffer levels under the National Food Security Act. The government also highlighted maize as a major ethanol feedstock and noted the programme’s contribution to foreign‑exchange savings, lower emissions and higher farmer incomes. India achieved its 20 % ethanol‑blended petrol target in July 2025, five years ahead of schedule, though many motorists have complained about reduced mileage and perceived engine wear.