In a significant move to fortify the maize farming community, the Indian Food Ministry is gearing up to present a groundbreaking scheme to the Cabinet. This scheme guarantees maize farmers a Minimum Support Price (MSP) while ensuring distilleries receive a consistent supply of this crucial raw material for ethanol production.
Committee’s Nod and Ministry’s Vision
Sources within the Food Ministry have disclosed that the Committee of Ministers has given in-principle approval to the scheme. Under this plan, cooperatives NAFED and NCCF will directly procure maize from farmers at MSP, subsequently selling it to grain-based distilleries at MSP plus mandi(domestic market) tax. The government will cover the incidental expenses, which are expected to be a maximum of 10 percent.
In a media briefing, the Food Secretary unveiled the plan, emphasizing the collaboration between the Agriculture Ministry and the Ludhiana-based Indian Institute of Maize Research (IIMR). Their collective efforts aim to formulate a scheme that guarantees MSP and boosts productivity and production beyond the current 36 million tonnes.
Strategic Game-Plan
According to insiders, the cooperative’s first step involves registering farmers willing to participate and determining the distilleries’ requirements before sowing commences. Farmers will be encouraged to cultivate maize in specific quantities based on demand, with the assurance of selling at MSP. Distilleries will commit to paying cooperative rates in advance, eliminating the need for cash credit. The initial phase will likely roll out as a pilot project during the Kharif season next year, focusing on states where farmers struggle to secure even MSP.
The Market Movements And Ethanol Blending
The all-India average mandi price for maize from October to November 2023 stood at $0,28/kg or €0,26/kg, 6.7 percent lower than its MSP of $0,30/kg or €0,28/kg. Regions like Madhya Pradesh, Chhattisgarh, Rajasthan, Uttar Pradesh, and Odisha witnessed maize farmers receiving rates below MSP. However, a positive shift occurred in the first week of December, with the average price rising to $0,29/kg or €0,31/kg.
The shift towards maize gained momentum in 2022, aiming to achieve a 20 percent ethanol blend with petrol (EBP) and address sugarcane cultivation’s limitations. With approximately 120 grain-based distilleries in the country relying on rice/maize for ethanol production, the scheme aligns with the evolving needs of the Ethanol Blending Programme (EBP).
This scheme not only safeguards the interests of maize farmers but also ensures the stability of the ethanol supply chain. It’s a promising leap towards agricultural resilience, offering a template for sustainable collaborations between farmers, cooperatives, and industries. In a climate where farmers face uncertainties, such initiatives pave the way for a more secure and prosperous agricultural future.