Govt to cut broken rice in PDS to free up ethanol feedstock, says food secretary

The Centre is set to approach the Cabinet with a proposal to reduce the allocation of broken rice in grains distributed under the public distribution system (PDS) from 25 per cent to 10 per cent, a move that would free roughly 90 lakh tonne of broken rice annually for the ethanol sector, Food Secretary Sanjeev Chopra said on Tuesday.

Speaking at the All India Distillers’ Association (AIDA) conference, Chopra said the proposal was aimed at providing the ethanol industry with a stable, year-round feedstock supply, reducing its dependence on whole grain stocks of the Food Corporation of India (FCI).

“Climate change is a reality. We need to make sure the supply chain is not disrupted. A steady supply of broken rice to the ethanol sector will help ensure that,” he said. At present, the grains distributed under PDS has 25 per cent broken rice to be provided to 80 crore beneficiaries. Under the new plan, this would be brought down to 10 per cent.

The surplus broken rice, drawn from the roughly 360-370 lakh tonne of rice distributed annually, would be sold through auction to ethanol producers, animal feed manufacturers and others. A pilot has already been conducted in five States.

From next year, the Government will stop supplying whole-grain FCI rice to distilleries. Broken rice from the revamped food scheme will take its place as the primary grain-based feedstock, Chopra said.

“Looking further ahead, from the next ethanol supply year, whole FCI rice will no longer be available for the sector. In its place, we are moving toward the supply of broken rice, a change that addresses multiple objectives simultaneously.”

This proposal serves multiple interests at once: it improves the quality of grain received by PDS beneficiaries, eases storage and logistics pressures, and gives the ethanol sector a more stable, predictable, year-round feedstock, he said.

The announcement comes against the backdrop of a sharp rise in global crude oil prices. Brent crude, which was trading at around $60-70 per barrel three weeks ago, has risen by nearly 40 per cent, renewing pressure on India to accelerate its ethanol blending programme. Chopra said India’s ethanol blending in petrol had already reached 20 per cent, up from just 1.5 per cent in 2013, saving the country over INR 1.63 lakh crore in foreign exchange and cutting crude oil imports by 277 lakh metric tonne since 2014.

Ethanol production capacity has grown from 420 crore litres in 2013-14 to nearly 2,000 crore litres today, with 650 crore litres added in just the past three years. The Government is now shifting focus from supply to demand, he said, adding that raising the blending limit beyond 20 per cent, mixing ethanol with diesel, and promoting flex-fuel vehicles were all being actively considered, with decisions expected in the near future.

Chopra cited past supply disruptions as the driving force behind the structural reform. In 2023, a poor sugar harvest and concerns over rice output had forced the Government to restrict feedstock supplies to distilleries. The broken rice proposal was designed to prevent a recurrence, he said.

He also urged distilleries to expedite lifting of the current FCI rice allocation. Of the 52 lakh tonnes set aside for the current supply year, only 21 lakh tonnes had been picked up so far. A further 20 lakh tonnes remained available, but the discounted rate was valid only until June 30.

On alternative feedstocks, Chopra said maize was being actively promoted, particularly rain-fed varieties that do not require irrigation, as part of efforts to encourage farmers to diversify away from paddy.Around 40 per cent of ethanol supply already comes from grain-based sources, mainly maize. The agriculture ministry was also developing high-yield varieties capable of producing five to six tonnes per hectare, he added.

Referring to Brazil’s experience after the 1973 oil shock — which led to an ethanol blending rate of around 30 per cent — Chopra said India’s current energy crisis presented a similar opportunity to recalibrate its strategy.“Every challenge carries within it an opportunity. This is an important moment for us to revisit and strengthen our ethanol blending programme,” he said.

AIDA President Vijendra Singh said the ethanol industry was prepared to go beyond the E20 target already achieved by the country. The association demanded the Government to raise the ethanol blending mandate gradually from 20 level.

It also called for introduction of flex-fuel vehicles capable of running on 100 per cent ethanol on the lines of Brazil, promotion of ethanol-based cook stoves for domestic and commercial use, and exploration of ethanol blending in diesel.PS Ravi, Director (Downstream) at the Federation of Indian Petroleum Industry, called on the ethanol industry to support expansion of India’s biofuel programme beyond petrol blending.

He outlined three key requests to the AIDA and its members to accelerate further biofuel adoption with respect to biodiesel blending in diesel, ethanol as cooking fuel and sustainable aviation fuel and feedstock development. Deputy Agriculture Commissioner Mehraj AS, Robert Papa, Agricutlure attache at Embassy of Brazil in New Delhi were among others present at the event.