Fuel, forex and farmers: Why India is betting big on maize

The economic imperative for increasing maize production is driven by India's strategic push towards ethanol blending, aiming for E20 (20% ethanol in petrol) by 2025-26. This policy, managed by the Ministry of Petroleum and Natural Gas, serves a dual purpose: enhancing energy security by reducing reliance on imported crude oil and saving foreign exchange (estimated at $3.7 billion recently). However, achieving E20 and potential future targets (E27 or E30) without compromising sugar diversion necessitates a massive increase in maize usage for fuel, projecting a demand of 15-18 Mt by 2026-27. Furthermore, structural demand is supported by the rapid growth of the poultry and dairy sectors, which rely heavily on maize for feed. The challenge lies in balancing this domestic demand with the need to avoid heavy reliance on imports, while ensuring farmers receive remunerative prices, supported by the Minimum Support Price (MSP) mechanism.

A crucial governance challenge is developing a comprehensive agricultural value chain that ensures the benefits of increased yields actually reach the farmers. The Indian Council of Agricultural Research (ICAR) proposes a systemic approach that moves beyond simply providing better seeds. The delivery chain must start with market assurances—reliable contracts from distilleries and feed mills—which provide the necessary incentive for farmers to invest in better practices. This requires establishing robust Farmer Producer Organisations (FPOs) capable of negotiating contracts and managing custom hiring centers for essential machinery like zero-till planters and grain dryers. States like Assam and West Bengal have successfully demonstrated that when a supportive ecosystem is built—including drying capacity and market linkages—yields and crop area can double rapidly. Policymakers must focus on coordinating spending across seed supply, mechanization, and procurement to sustain this growth.

While expanding maize production is economically attractive, it poses significant environmental risks, primarily concerning water resource management. The expansion must avoid replicating the water-depleting trajectory of the rice-wheat cropping system in North-Western India. To mitigate this, agricultural scientists advocate for sustainable practices like drip fertigation with mulch, which can increase yields while saving up to 40% of water. Additionally, the adoption of zero tillage, residue retention, and legume intercropping is crucial for maintaining soil health and water conservation. The goal is to lift kharif (rainfed) yields significantly (from 2.9 to 4.0 t/ha) while ensuring that maize does not become another water-guzzling crop, aligning with the principles of climate-resilient agriculture. The push for Sustainable Aviation Fuel (SAF) and biogas derived from maize further integrates agricultural policy with broader environmental and energy transition goals.