E20 Ethanol Policy Flaw- Petrol saved but Daal Sacrificed- warns Economic Survey!

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In a bid to reduce crude oil imports, India's E20 policy mandated blending 20% bioethanol with petrol. To make it work, the government incentivized maize cultivation by offering higher guaranteed prices through Oil Marketing Companies. Farmers in Maharashtra and Karnataka, who traditionally grew pulses (dal crops) and oilseeds like groundnut, began converting their fields to maize — because that is where the money now is.
The result on the energy side is impressive. In 2025, India avoided importing roughly 204 lakh metric tonnes of crude oil, saving approximately Rs 1,84,000 crore in foreign exchange.
But the Economic Survey has flagged an uncomfortable trade-off unfolding in parallel. As pulse and oilseed cultivation shrinks, India will need to import more of these food items from countries like Indonesia, Thailand, Vietnam, and African nations. This creates a food security vulnerability that money alone cannot fix.
Here is why "just import it" is not a safe answer. In 2021, La Nina caused severe drought in South America. Argentina responded by banning soybean exports. India could not buy those commodities even at full market price. Geopolitical events, climate shocks, and export bans can make import dependence dangerous.
The Economic Survey's core message: food security and energy security must be balanced. One cannot be sacrificed for the other. Giving excessive priority to a single crop like maize, at the expense of pulses and oilseeds, is a policy flaw that needs structural correction.
The Survey also recommends switching bioethanol feedstocks from food crops like sugarcane, rice, and maize to non-food crops like Jatropha and Karanj. But this faces a trust deficit — around year 2000, farmers invested heavily in Jatropha cultivation expecting guaranteed buyers, only to find no OMC was obligated to purchase it. Motivating those farmers to return is a real governance challenge.
For UPSC aspirants: this topic is valuable for GS3 (Economy, Agriculture, Energy Security) and GS4 (Ethics, policy trade-offs). It can also serve as a case study in Essay and Mains answer writing.
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