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With an aim to enhance the economic viability of cooperative sugar mills (CSMs), Department of Food & Public Distribution, Government of India, has notified a scheme for CSMs under modified Ethanol Interest Subvention Scheme for Conversion of their existing sugarcane-based feedstock ethanol plants into multi-feedstock based plants to use grains like Maize and Damaged Food Grains (DFG).

This move is beneficial, ensuring the functioning of cooperative sugar mills throughout the year, as the sugarcane crushing period is limited to 4-5 months only in a year due to which sugar mills can operate for a limited period of time. This further leads to reduction in their overall operational efficiency and productivity. 

The conversion to multi-feedstock based plants would not only make the existing ethanol plants of CSMs capable of operating when sugar based feedstocks are not available for ethanol production but will also improve efficiency and productivity of these plants. As a result, these cooperative ethanol plants will have increased financial viability.

Under this modified Ethanol Interest Subvention Scheme, Government is facilitating entrepreneurs with Interest subvention at the rate of 6% per annum or 50% of rate of interest charged by banks/financial institutions, whichever is lower, on the loans to be extended by banks/financial institutions is being borne by the Central Government for five years including one-year moratorium.