Clarification regarding the diversion of rice for ethanol production in Madhya Pradesh

14-Jul-2026 03:52 PM

New Delhi: The Food Corporation of India (FCI) has issued a press note clarifying media reports concerning the alleged diversion of rice supplied for ethanol production in Madhya Pradesh. The press note states that certain media outlets have alleged a large-scale diversion—or use for purposes other than intended—of FCI rice made available for ethanol production in the state.

It was alleged that approximately 5 lakh tonnes of government rice, valued at around ₹1,160 crore, was diverted or misused. However, this report is not only completely false but also baseless; it lacks any truth or authenticity.

According to the FCI, during the 2024-25 marketing season (November–October), a stock of 2.98 lakh tonnes of rice was released to distilleries in Madhya Pradesh at a rate of ₹22.50 per kg for ethanol production, while a quota of 2.41 lakh tonnes was approved for the 2025-26 marketing season (up to June 30, 2026) at a price of ₹23.20 per kg.

Thus, a total of 5.39 lakh tonnes of rice has been released to distilleries from the 2024-25 season to date. The valuation of ₹1,160 crore for the 5 lakh tonnes of rice cited in media reports was calculated based on the rate of ₹23.20 per kg; however, in reality, the distilleries did not make a payment of that magnitude to the FCI.

The ongoing investigation does not pertain to the entire quantity of rice supplied under the ethanol blending program; rather, it concerns the alleged diversion of 490 bags (242.50 quintals) of rice, valued at approximately ₹5.63 lakh.

Therefore, the claims made in media reports regarding the total quantity of rice supplied to distilleries are misleading. The figure of ₹1,160 crore corresponds to the value of the entire supply of rice from the Food Corporation.