FCI Rice for Ethanol Supply Reaches 23 Lakh Tonnes as Centre Flags Grain Diversion Cases in Parliament

The Food Corporation of India has supplied over twenty-three lakh tonnes of rice to ethanol distilleries during the current financial year, according to details submitted to Parliament by the Central Government. In a written statement presented in the Rajya Sabha, Minister of State for Consumer Affairs, Food and Public Distribution Nimuben Jayantibhai Bambhaniya outlined the official offloading figures for biofuel processing. The government disclosure comes alongside the detection of two separate cases involving the illegal diversion of state-allocated foodgrains intended exclusively for industrial biofuel manufacturing, triggering administrative enforcement measures across two states.

Official figures indicate that the public sector agency sold twenty-three point forty-two lakh tonnes of surplus grain for biofuel conversion up to the end of July. This allocation pattern continues a significant upward trend compared to previous fiscal periods, following a massive release of over fifty-two lakh tonnes of rice for biofuel production during the preceding year. The aggressive offloading strategy reflects ongoing national efforts to accelerate ethanol blending in motor fuel, supported by substantial central grain reserves that currently exceed mandatory buffer requirements nearly threefold.

Alongside the supply metrics, the ministry highlighted regulatory oversight measures after detecting irregularities in grain movements. Enforcement authorities identified two specific instances of grain diversion linked to industrial processing units in Uttar Pradesh and Madhya Pradesh. State food departments initiated immediate administrative procedures against the implicated units, while the central procurement body suspended further grain allocations to the affected facilities. The government emphasized that no such diversion incidents had been recorded during the previous three operating cycles, pointing to heightened surveillance protocols across state boundaries.

The parliamentary submission also drew attention to the financial and structural aspects of foodgrain management. While the central administration maintains that grain sales under the domestic open market scheme do not constitute a direct subsidy to biofuel refiners, industry experts point out that reserve sale prices remain lower than procurement and carrying expenses. Maintaining massive central storage reserves incurs considerable public expenditure, making controlled industrial offloading a primary vehicle for managing excess holdings without overloading domestic wholesale grain markets.

The ongoing expansion of biofuel refining aligns with broader national policy targets aimed at lowering petroleum import dependencies and promoting renewable energy alternatives. As the central government balances agricultural procurement, national food security buffers, and industrial feedstock requirements, monitoring the supply chain against illegal market diversion remains a pivotal operational challenge for enforcement agencies.