Making Ethanol from Rice Hurts India’s Poor

In a recent press conference, the Union Food Secretary Sudhanshu Pandey said that in 2020-21 the Centre allocated about 78,000 tonnes of rice from the Food Corporation of India (FCI) stocks to distilleries to produce ethanol. The distilleries got rice at a subsidised Rs.20 per kg rate.

The National Biofuel Coordination Committee (NBCC), chaired by the Union Minister of Petroleum and Natural Gas, has decided to use the surplus rice with the FCI for conversion to ethanol. The ethanol will be blended with petrol or used to make alcohol-based sanitisers. 

These decisions may appear pragmatic, but they affront the millions deeply affected by food insecurity in the country, especially during the ongoing COVID-19 pandemic. These decisions seem to benefit a handful of corporations in the biofuel industry. Fossil fuels are the chief energy source today and are responsible for considerable emissions into the atmosphere, including greenhouse gases or GHGs that cause global warming. For this reason, too, the NBCC decision is hard to accept. 

To divert food crops to produce biofuel is unethical, especially considering India is still not distributing adequate food rations to those who need it. The urgent priority should be to transfer grain from godowns to ration shops to meet the high shortfall. It is admirable that after Independence, food grain production has increased six-fold in India and could cross nearly 310 million tonnes by the end of the 2021 Kharif season.

However, amidst the plenty, there exists a grave crisis of hunger. India has slipped nine places on the Global Hunger Index. It was 102nd among the 117 countries ranked in the 2019 index. The central food security scheme currently covers around 800 million people, or about 62% of the Indian population, but leaves out approximately 90 to 100 million poor. 

The National Family Health Survey (NFHS-4) for 2015-16 found that 38.4% of children under five years are “stunted” or are lower in height for their age and 21% are “wasted” or have low weight for height. Over the ten years between NFHS-3 and NFHS-4, the prevalence of wasting increased from 19.8% to 21%.

About 85% of rice grown in India is a Kharif crop, heavily dependent on the monsoon. True, there are predictions of a normal monsoon, but what happens if the monsoon projections go wrong or change, as seems to be happening? If our granaries overflow with food stock, the government should consider exports at concessional prices to sub-Saharan African nations and other countries reeling under severe food shortages due to the pandemic. 

According to the Directorate of Economics and Statistics of the Union Ministry of Agriculture and Farmers Welfare, 70.1 kg of rice was available (per head per annum) in 2019, a steep decline from 80.9 kg in 1991. This fall in per head calorie availability is mainly due to increased impoverishment from pro-corporate and anti-poor neoliberal policies implemented by successive governments in power.

Damaged Grain in FCI Godowns

In the past, damaged grain, unfit for human consumption, has been sold by the FCI as cattle feed. Despite the commonly held belief that lakhs of tonnes of grains rot in them, the FCI has good storage practices. The percentage of the total quantity issued by the FCI has been just about 0.01 to 0.04 in the last five years. On 1 March, the FCI had only 984 tonnes of non-issuable rice and 20 tonnes of non-issuable wheat. Such a small amount of damaged grains can hardly produce any ethanol. 

The NBCC decision to use good quality rice—which falls within FSSAI specifications—to manufacture ethanol is a bad policy for any time, but particularly unethical during a pandemic. It deprives food to the poor under the PDS during a steep fall in national income, sky-high unemployment, and surging food inflation. 

Increased Prices and Food Riots

The diversion of food grains to produce biofuel was considered one reason for the rise in food prices in many countries. Corn and other grain also go into poultry and cattle feedstock. Therefore, they are a crucial part of the food economy. 

In 2007-08, the USA used about 25% of the corn it raised to produce biofuel. Other than cereals, oilseed crops such as rapeseed, soybean and sunflower, were used to produce biofuel. According to a World Bank report from March 2008, the average world prices of wheat rose 130%, soy 87%, rice 74% and maize 31%. Such steep food price escalations have led to public protests and even food riots in several counties in Asia and Africa. 

Policymakers in India were acutely aware of the danger of diverting grain to produce biofuel. In 2009, the National Policy on Biofuels stressed non-food resources to avoid conflicts between food and fuel. In 2018, the government modified its 2009 policy. The new National Policy on Biofuels set the 2030 blending targets at 20% ethanol in petrol and 5% biodiesel for diesel. 

India has an ethanol production capacity of 6.84 billion (684 crore) litres. To meet the target for petrol, “surplus” rice is being diverted to produce an additional 1,000 crore litres of ethanol by 2025. The government has provided financial assistance to expand the production infrastructure to generate ethanol from food grains, including rice. Of the 418 industrial ethanol units selected for the purpose, more than 70 are in Uttar Pradesh alone. The state Assembly election is due early next year. 

There is talk about reducing the GST on biofuel to 5% as sought by the biofuel industry. What is more, these industries will no longer have any environmental obligations either. Sugar manufacturing units and distilleries get financial assistance to produce ethanol from food grain. They are exempt from mandatory prior environment clearances. Over the past three seasons, sugar mills and distilleries generated an estimated Rs.22,000 crore in revenue from selling ethanol to oil marketing companies. However, sugar mills did not pass on this bounty to farmers. Nor did the farmers get their long-pending dues from the mills.

To divert rice or other food grains to produce ethanol threatens the much-needed food security under the PDS. A viable alternative to food grains and edible oils for biodiesel production is cultivating non-edible oils in marginal wastelands where other crops cannot grow while non-edible oil can easily sustain. Their cultivation costs are much lower, and non-edible oil plants also contribute relatively less atmospheric carbon dioxide. Post-harvest crop residues such as molasses and cellulose-based plant biomass are viable alternatives to produce biofuel. Instead of putting extra stress on fertilizers, water, energy, and other resources to raise plantation crops while diverting scarce food grains, the government must explore non-conventional clean resources such as wind power to attain energy security.

Dr Soma Marla is a retired principal scientist, biotechnology, ICAR New Delhi. The views are personal