The government on Thursday claimed that India’s ambitious Ethanol blending Plan would not affect food security as meeting food grain demand is a top priority of the government.

The Ministry said Government was planning to only divert surplus stocks of sugar and food grains for ethanol production to help sugar companies, farmers and to save foreign exchange

Centre has already injected Rs 35,000 crore to the cash-starved sugar industry to increase their production and convert surplus sugar into ethanol to ensure energy security and save foreign exchange, said a senior officer of the Petroleum Ministry.

The move would not only help in the early settlement of cane farmers’ dues but also increase production revenue for the sugar industry. In the ongoing season it was expected to pump in Rs.20,000/- crores more through the ethanol blending programme alone to fuel growth in the rural economy, the Ministry said.

The government has also allowed the conversion of coarse grains mainly maize for ethanol production as there are large stocks of food grains piling up in FCI godowns. “This would help the Indian economy in many ways, first it would encourage people to switch over to less water consuming crops like maize instead of rice, and second it would help FCI to clear its stocks, which already has huge stocks of rice,” claimed a senior officer of the Petroleum Ministry.

Allowing alternative use to rice and maize would help in maintaining price stability for the farmers for their output. Besides, it would bring new investment in distilleries, its allied infrastructure, and generate employment, the Ministry said.

This year India was expected to have around 340 Lakh Metric Tons of sugar over and above the opening stock of 90 Lakh MT which is cumulatively much above the domestic consumption of 260 Lakh MT. “Out of this, surplus sugar quantity of 35 Lakh MT is proposed to be diverted to ethanol. Had the surplus sugar not been diverted for ethanol production, it would have to be exported at a subsidized rate to other countries to maintain price stability. Similarly, the stocks of rice with Food Corporation of India (FCI) alone are 202 lakh MT, much higher than the buffer stock requirement of the country.