Rice for ethanol production: US seeks details of India’s rice stocks used for Ethanol output

The US has sought details from India on the use of rice stocks for non-food purposes such as ethanol production, alleging that government-held rice procured under the price support programme has exceeded the government’s food security needs, resulting in rice being released below cost and for non-food purposes.

The questions will be taken up at the World Trade Organization’s (WTO) Committee on Agriculture meeting later this month.

Washington claimed that in 2025-26, surging rice stocks led New Delhi to scale up allocations of Food Corporation of India (FCI)-held rice for ethanol supply. “The price support policies of India have contributed to continued increases in domestic rice supplies, year-after-year above and beyond domestic food consumption needs,” the US said.

Referring to India’s notification on public stockholding for food security purposes, under which it exceeded the de minimis limit, Washington said stocks under the programme are acquired and released to meet the domestic food security needs of India’s poor and vulnerable population, and “not to distort trade or adversely affect the food security of other members”. The US said India raised its allocation of free food grains under food security programmes to 10 kg per person per month from April 2020 through December 2022, from 5 kg per person per month. It added that the government has been supplying rice through the Open Market Sale Scheme to states “significantly below the acquisition cost of rice under the price support programme”.

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“In August 2024, the government resumed the allocation and sale of FCI rice to ethanol manufacturers via e-auctions under the OMSS. In 2025-2026, surging rice stocks led the government to steadily scale up allocations, allocating several million metric tonnes of FCI-held rice for ethanol supply,” the US alleged. It sought an explanation on how India is complying with the requirements of the Bali Decision on Public Stockholding while continuing to increase the applied administered price for rice to incentivise higher domestic production when domestic supplies exceed domestic food consumption needs.

Washington has also sought a breakdown of central and state governments’ expenditure on public stockholding and distribution of food grains, including spending on sales under food security programmes, subsidised sales of grains and oilseeds under the Open Market Sale Scheme to private trade, and subsidised sales of grains and oilseeds under the scheme to industrial users such as ethanol manufacturers.