The ‘bitter’ price of policy short-sightedness: sugar vanishes from the common man’s plate in the ethanol scramble

India Speak Daily Bureau. The administrative obsession with bringing a ‘green revolution’ to vehicle fuel has finally weighed heavily on the ordinary citizen’s kitchen. The country that until a few years ago used to boast of exporting crores of tonnes of sugar is today scrambling with emergency measures such as importing 10 lakh tonnes of raw sugar and imposing stock limits to control sugar prices in the domestic market. In just three months, the 40% surge in sugar prices (from 48 rupees to 67 rupees per kilo) is not the result of any natural disaster, but an artificial crisis created by unplanned priorities and policy short-sightedness.

Section 1

At whose cost is the ‘biofuel’ celebration?

The figures clearly show how the scales of priorities have tipped:

*The food versus fuel conflict: In last year’s rush to produce 720 crore litres of ethanol, cane-molasses equivalent to 25 lakh tonnes of sugar and 1.33 crore tonnes of grain were diverted to ethanol production.

*The scramble over grain and the blow of inflation: The impact of throwing maize and broken rice into the biofuel furnace has not remained limited to sugar alone. Maize flour became costlier by 11%, rice by 16%, and jaggery by up to 24%. With the crisis deepening on animal and poultry feed, milk and egg prices rose 5-10%. In short, the nutrition of ordinary families came under assault from every side.

*Neglect of the buffer stock: While an opening stock of 50 lakh tonnes is considered safe for domestic consumption, stocks held by mills have fallen to just 32 lakh tonnes.

*The fall from exporter to importer: In 2022-23, India exported 1.33 crore tonnes of sugar and related products; today, in 2026-27, exports have shrunk to zero and India has been forced to source sugar from abroad.

Emergency patches and ground reality

After the uproar in the market, the government has allowed duty-free imports of 10 lakh tonnes of raw sugar until 31 October and imposed a 15-day stock limit on bulk consumers. But the bitter truth is that availability of such raw sugar in the international market before November is next to nil. While experts had been warning for the past three years that indiscriminate ethanol diversion would tangle the fabric of food security, policymakers remained busy playing with figures.

The aspiration for green energy may be necessary, but when the blueprint of development begins to snatch away a poor family’s morning tea and basic meal, the question is bound to arise—will the foundation of energy self-reliance be laid on the common man’s hunger and inflation? Emergency imports and bulk restrictions are merely a too-little-too-late administrative response, not a cure for that fundamental mistake which has left a bitter taste in the mouth of the entire country.

Policy contradictions put food security and the environment in crisis

The Ethanol Blending Programme (EBP) was projected as an infallible weapon to cut the crude-oil import bill and reduce carbon emissions. But in practice this policy has become trapped in such an economic and ecological vortex that the balance of priorities has completely broken down. Soaring sugar prices and the resort to imports are only the first symptoms of this flawed plan; several deeper policy inconsistencies are at work behind it.

Major flaws and inconsistencies in the ethanol policy

*Excessive dependence on 1G biofuel (Food vs. Fuel): Worldwide, the sustainable model of biofuel is based on ‘2G’ (stubble, agricultural waste and bagasse). In India, due to policy incapacity, 2G plants remained only on paper and in pilot projects. Choosing the easy path, the government diverted 1G—that is, food crops—sugarcane, maize, broken rice and damaged grain—entirely into the fuel furnace.

*Heavy exploitation of ecology and groundwater: Sugarcane and paddy are both ‘water-gulping’ (highly water-consuming) crops. Thousands of litres of groundwater are consumed to produce one litre of ethanol. In a country where several states are grappling with a groundwater crisis, giving a government subsidy to grow sugarcane for vehicles amounts to reckless disregard for the environment.

*Corporate profit versus exploitation of the ordinary consumer: This ethanol framework was designed with sugar-mill owners and the big distillery syndicate in mind. The government gives distilleries a fixed purchase price and financial incentives, so mills divert molasses and cane into ethanol while plunging the domestic sugar market into crisis. The profit goes into the pockets of a few select industrial houses, while the burden of inflation is borne by the ordinary citizen.

*The invisible burden on vehicle makers and customers: In the hurry to meet the E20 (20% ethanol blend) target, the health of existing vehicles was ignored. Ethanol has a corrosive effect on the engines, rubber parts and fuel lines of older vehicles, lowering mileage and leaving ordinary drivers to bear the repair costs.

*The contradictory chakravyuh of imports and exports: On the one hand ethanol is being made in the name of saving foreign exchange, and on the other, to make up for the same shortage, foreign exchange is being burnt on importing edible oils, pulses and now 10 lakh tonnes of raw sugar.

The need for policy re-evaluation

This policy—imposed without solid data, a long-term buffer-stock plan or the basic infrastructure of 2G biofuel technology—may serve immediate publicity, but in the long run it is hollowing out the country’s food sovereignty. Until food crops are separated from vehicle fuel, this policy will continue to come at the expense of ordinary households’ kitchens.

Section 2

The stirrings of ‘green colonialism’: international manoeuvring to open India’s doors to surplus American maize and ethanol

The trouble in India’s ethanol policy is not limited to the domestic level; it is also tied to a larger geopolitical and trade game. When India set the ambitious E20 (20% ethanol blending) target without a solid plan, a heavy domestic shortfall of maize and grain followed. Taking advantage of this very weakness of domestic policy, the American farm and corporate lobby is continuously building pressure to dump its surplus maize and ethanol in the Indian market.

The American lobby’s game and India’s market

*The crisis of the American ‘Corn Belt’ and the search for new markets: America produces about 35 crore tonnes of maize every year and makes corn-based ethanol in large quantities. With domestic consumption limited and trade tensions with big buyers such as China, the American farm syndicate is searching for a large consumer market to sell its bumper surplus stock.

*Pressure and diplomatic manoeuvring: The ‘U.S. Grains Council’ (USGC) and the U.S. Trade Representative have continuously been building pressure on India to cut tariffs and remove restrictions on the import of American maize and fuel-grade ethanol. They want to cash in on India’s ethanol production shortfall as a golden opportunity for themselves.

*The back door for GMO maize: India has had a strict policy on the direct import of genetically modified (GM) crops. But now, using the pretext of an ethanol shortage, ground is being prepared under a tariff-rate quota (TRQ) to bring American GM maize into the country in the name of “industrial/fuel use only”.

*DDGS’s grip on the feed market: Lobbying is under way to dump DDGS (Distillers Dried Grains with Solubles)—the co-product left after ethanol is made from American maize—as cheap animal feed in India’s poultry and dairy industry. This will make India’s domestic animal-feed system directly dependent on the American supply chain.

The deepening threat to the Indian economy and farmers

1. Ruin of domestic maize farmers: Just when maize-producing farmers of Bihar, Madhya Pradesh, Karnataka and Andhra Pradesh had begun to hope for prices that better cover their costs, the import of cheap maize heavily subsidised by the American government could send prices in local mandis crashing. (Exactly the kind of crisis that Mexico’s small maize farmers faced after the ‘NAFTA’ agreement).
2. The hollow claim of energy sovereignty: The policy that was brought in the name of “reducing foreign dependence on crude oil” appears to be swapping dependence on crude oil for dependence on foreign maize and foreign ethanol. If maize too has to be fetched from America to fill vehicle tanks, then this is not ‘self-reliance’ but a new kind of ‘green import trap’.

Policy warning

The result of copying foreign models without increasing long-term domestic production capacity and without developing basic 2G technologies is exactly this—the country’s food security is put at risk, inflation snatches the common man’s plate, and ultimately the country’s doors have to be forced open to dump the surplus goods of multinational companies.

Section 3

The bitter outcome of ‘copy–paste’ policy: When blind copying of the American model wrecked India’s food balance

A statement by Union Minister for Road Transport and Highways Nitin Gadkari has been widely discussed on public platforms. Revealing the haste in implementing the country’s ethanol policy, he had said:

“Officials told me that preparing the draft of the ethanol policy would take 4 to 5 years. I told them straight: take a copy of America’s ethanol policy, change the title on top, write Government of India at the bottom, and implement it.”

“Take a copy of the ethanol policy” — Union Minister for Road Transport and Highways Nitin Gadkari

In political corridors it may have been presented as administrative speed and a quick work style that sidelines ‘red tape’, but on the economic and social front this admission exposes a serious failure of the country’s policy-making process.

Fundamental planning flaws of the copy–paste policy

*Neglect of geographic and agricultural realities: In America, per-capita agricultural land, the vast Corn Belt and the vast corporate farming model are entirely different from India. There, foodgrain remains in surplus, whereas India is a country with a vast population of 140 crore, where more than 80% of farmers are small and marginal. Blind copying of the American model ignored the fabric of Indian agriculture and food security.

*The illusion of ‘surplus grain’ and the risk of hunger: America can take the risk of turning maize into fuel at an industrial scale because its domestic food security is never put at stake. In a country like India—where malnutrition and food inflation are an everyday struggle—throwing food crops (sugarcane, maize, rice) into vehicle fuel has proved a serious planning mistake.

*Absence of study and impact assessment: Fixing the slow pace of bureaucracy is one thing, but completely sidestepping policy research, ground-level simulation and the local supply-demand balance is another. Had policymakers assessed before implementation how diverting 25 lakh tonnes of sugar or crores of tonnes of grain would affect retail markets, the need to import 10 lakh tonnes of raw sugar today might not have arisen.

*An easy path for foreign lobbies: When policies are based on direct copying of foreign models, they naturally become favourable to foreign commercial interests. Today, when America is building pressure to export its surplus maize and ethanol to India, the foundation of this lies in that same ill-considered ‘copy-paste’ policy.

Policy lesson

For any developing country, sustainable policy should be built on local resources, climate, groundwater and the people’s priorities—not by merely changing the title on a Western draft. When policy-making is cut off from ground reality and takes the ‘shortcut’ route, the ordinary consumer ultimately pays through inflation, and the country through food insecurity.

Conclusion: The multi-dimensional crisis of ‘copy–paste’ policy and the need for introspection

All in all, the country’s present ethanol crisis has emerged as a tragic nexus of wholesale adoption of the American model without ground-level research, unplanned priorities and international trade pressures. The policy that was implemented in haste in the name of saving foreign exchange and energy self-reliance not only turned the country from a sugar exporter into an importer through the indiscriminate use of 1G crops and made the common man’s plate costlier by up to 40%, but also left the domestic maize and animal-feed system creaking. Its most dangerous aspect is that, under the cover of this domestic shortage, the American farm lobby is preparing the ground to dump its surplus maize, ethanol and GM by-products in the Indian market—that is, in place of the claim of reducing dependence on crude oil, the country is being

pushed into a new ‘green import trap’ of foreign grain and fuel. Until policymakers abandon blind copying of Western models and comprehensively re-evaluate this entire policy with India’s local agriculture, groundwater balance, food security and 2G biofuel technology at the centre, this ‘green obsession’ of filling vehicle tanks will keep hollowing out the ordinary citizen’s basic kitchen and the country’s food sovereignty.