In a significant move for the biofuel sector, the Indian government has allowed ethanol distilleries to purchase rice from the Food Corporation of India (FCI) at a fixed price of Rs 2,800 per quintal under the revised Open Market Sale Scheme (Domestic) for 2024-25. This decision comes as a relief to grain-based ethanol producers, who can now procure rice to enhance their production capacities. The government’s approach not only addresses the surplus rice stocks but also aligns with its broader strategy to promote renewable energy sources. By facilitating easier access to rice for distilleries registered with Oil Marketing Companies (OMCs), the government aims to make ethanol production more viable and encourage greater utilization of surplus agricultural produce.

However, this policy revamp follows a challenging backdrop where, despite a previous allowance for distilleries to buy large quantities of rice, the response from the producers had been lukewarm due to financial unfeasibility. The ongoing $2,800 per quintal pricing structure for both public and private sales indicate a strategic effort to stabilize the market while supporting distilleries. At the same time, the differentiated pricing for central cooperatives and community kitchens highlights the government’s commitment to ensure food security and lower costs for essential services. By integrating agricultural surplus into the energy sector, this initiative carries the potential to bolster rural economies while contributing to the country’s renewable energy goals. (Source: Chinimandi)

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