Biofuel Incentives Risk Cropping Patterns, Food Security: Economic Survey Warns

• The Economic Survey warns that biofuel mandates and feedstock-specific price incentives could distort cropping patterns and food prices if not regularly recalibrated.
• India's ethanol blending program, aiming for 20% ethanol in petrol, has expanded beyond sugar to include food grains like maize, leading to significant foreign exchange savings and reduced crude oil imports.
• Administered ethanol pricing, particularly for maize-based ethanol, has created strong incentives, causing maize production and cultivated area to expand rapidly.
• This expansion of maize is reshaping cropping incentives, potentially impacting crop diversity and food security, especially in states like Maharashtra and Karnataka.
• The Survey calls for a comprehensive policy roadmap to balance energy and food security, focusing on yield improvements for pulses and oilseeds and avoiding market distortions.

Why It Matters: Biofuel incentives, while boosting energy security, risk distorting cropping patterns and food security if unchecked.