US seeks data on India’s rice used for ethanol

The United States has requested information from India regarding the utilization of rice reserves for non-food applications, including ethanol production. The US alleges that rice stocks procured through government price support programs have exceeded the nation's food security requirements, leading to the release of rice below cost for non-food purposes. This inquiry will be addressed during a meeting of the World Trade Organization's Committee on Agriculture in the coming months.

According to Washington, the expansion of rice stocks in 2025-26 prompted India to increase allocations of Food Corporation of India (FCI)-held rice for ethanol supply. The US claims that India's price support policies have resulted in a continual rise in domestic rice production, surpassing domestic food consumption needs by significant margins each year.

Referring to India's notification on public stockholding for food security, the US noted that India exceeded the de minimis limit, acquiring and releasing rice stocks to meet domestic food security needs for the country's impoverished and vulnerable population, rather than to distort trade or undermine the food security of other member nations.

Washington asserted that India raised its allocation of free food grains under food security programs from 5 kg per person per month to 10 kg per person per month between April 2020 and December 2022. The US also noted that the government has been supplying rice to states at a significantly lower cost than the acquisition price under the price support program via the Open Market Sale Scheme.

In August 2024, the government resumed the allocation and sale of FCI rice to ethanol manufacturers through e-auctions under the Open Market Sale Scheme. The US is seeking an explanation on how India complies with the Bali Decision on Public Stockholding while simultaneously raising the administered price for rice to encourage increased domestic production when domestic supplies outpace domestic food consumption.

Additionally, Washington has asked for a detailed breakdown of the central and state governments' expenditure on public stockholding and distribution of food grains, including costs associated with sales under food security programs, subsidized grain and oilseed sales under the Open Market Sale Scheme to private trade, and subsidized sales of grains and oilseeds to industrial users like ethanol manufacturers.