Farmers Unresponsive to Maize Ethanol Price Rise

30-Jan-2026 05:12 PM

New Delhi: The central government is making every possible effort to increase domestic maize production, including a significant increase in the Minimum Support Price (MSP) and a continuous increase in the selling price of ethanol made from maize for oil marketing companies (OMCs) to boost demand and consumption and ensure better income for farmers.

This is leading to an improvement in the area under maize cultivation, but it has not diminished farmers' enthusiasm and interest in other crops, especially paddy and wheat.

Instead, the sowing of pulses and oilseeds is being partially affected, and the government's crop diversification plan is not achieving the desired success.

The Economic Survey presented in Parliament revealed that the selling price of ethanol made from maize increased by an average of 11.7 percent annually until the financial year 2024-25, but the ethanol blending program in petrol has not been effective in rapidly increasing the area under maize cultivation.

The government's plan to reduce the area under paddy cultivation has also failed. In the Kharif season of 2025-26, the area under paddy cultivation increased sharply to an all-time high of 441 lakh hectares, and there are indications of an increase in area during the Rabi season as well.

Similarly, the area under wheat cultivation surged to a new record level of 334 lakh hectares, which is 6 lakh hectares more than the 328 lakh hectares of the previous year.

Although the government fixes ethanol prices every year, it is not mandatory for ethanol manufacturers to buy maize from farmers at the MSP; they purchase it at prevailing market prices.

The price of maize fluctuates in the open market. Government procurement of maize is also very low. On the other hand,

the government procures large quantities of paddy and wheat for the central pool, which assures farmers of a fixed price for their food grains.