New Delhi: The United States has sought detailed information from India on the use of government-held rice stocks for non-food purposes, including ethanol production, amid concerns that procurement under India’s price support programme has pushed rice stocks beyond domestic food security requirements, The Economic Times reported.
The matter is likely to be raised at the World Trade Organization’s (WTO) Committee on Agriculture meeting later this month.
According to the US, India’s price support policies have contributed to a sustained rise in domestic rice stocks beyond the country’s consumption requirements. Washington has alleged that the resulting surplus has enabled the government to release rice at prices below its acquisition cost and divert stocks towards non-food uses.
A key concern raised by the US is the allocation of Food Corporation of India (FCI) rice to ethanol manufacturers. Washington said rising rice stocks during 2025-26 led the Indian government to progressively increase the quantity of FCI-held rice allocated for ethanol production.
The US, while referring to India’s notification concerning public stockholding for food security, said India had exceeded the de minimis limit. It maintained that stocks covered under the programme are meant to be procured and released to meet the food security needs of poor and vulnerable sections of the population, rather than distort trade or affect the food security interests of other WTO members.
Washington also referred to the increase in free foodgrain allocations under India’s food security programmes, from 5 kg to 10 kg per person per month between April 2020 and December 2022.
The US further said India had supplied rice to states through the Open Market Sale Scheme (OMSS) at prices substantially below the acquisition cost under the price support programme.
According to Washington, India restarted the allocation and sale of FCI rice to ethanol manufacturers through OMSS e-auctions in August 2024. It alleged that these allocations were subsequently increased as rice stocks grew during 2025-26, with several million tonnes of FCI-held rice being allocated for ethanol production.
The US has asked India to explain how the continued allocation of government-held rice for ethanol production is consistent with the provisions of the Bali Decision on Public Stockholding for Food Security Purposes.
Washington has also questioned the continued increase in India’s administered rice price, arguing that higher support prices encourage domestic production even when rice supplies exceed domestic food consumption requirements.
In addition, the US has requested a detailed account of expenditure by the central and state governments on public stockholding and foodgrain distribution.
The information sought covers expenditure on foodgrain sales under food security programmes, subsidised sales of grains and oilseeds to private traders through the OMSS, and subsidised sales under the scheme to industrial users, including ethanol manufacturers.
