US seeks details of India's rice stocks used for Ethanol output
The United States has sought details from India on the use of rice for ethanol production. Washington has alleged that India’s rice stocks exceed food security requirements, affecting global trade. India’s price support policies have also been cited as contributing to higher domestic rice supplies. The World Trade Organization is expected to discuss these concerns later this month. India’s…
The United States has requested information from India regarding the usage of rice reserves for non-food applications like ethanol production. They argue that the government's rice procurement program under the price support scheme has surpassed the nation's food security requirements, leading to the release of rice at a loss and for non-food uses. This issue will be discussed at the upcoming World Trade Organization's Committee on Agriculture meeting.
According to Washington, in the 2025-26 fiscal year, the rapid increase in rice stocks prompted India to increase allocations of Food Corporation of India (FCI)-owned rice for ethanol supply. They point out that India's price support policies have resulted in consistent surges in domestic rice production, exceeding domestic consumption needs year after year.
Referring to India's notification on food security stockholding, the US claims that the nation exceeded the de minimis limit, acquiring and releasing stocks to meet domestic food security needs for India's impoverished and vulnerable population, not to distort trade or harm other member countries' food security. They note that India raised its free food grain allocation under the food security programs to 10 kg per person per month from April 2020 to December 2022, up from 5 kg per person per month.
The US also mentions that the government has been supplying rice to states through the Open Market Sale Scheme at significantly lower costs than the price support program's acquisition cost.
Furthermore, the US alleges that in August 2024, the government resumed allocating and selling FCI rice to ethanol manufacturers through e-auctions under the Open Market Sale Scheme. They seek clarification on how India complies with the Bali Decision on Public Stockholding while simultaneously increasing the administered price for rice to encourage higher domestic production, given that domestic supplies exceed domestic food consumption needs.
Washington has also asked for a breakdown of expenditures by central and state governments on public stockholding and distribution of food grains, including costs associated with sales under food security programs, subsidized sales of grains and oilseeds under the Open Market Sale Scheme to private traders, and subsidized sales to industrial users such as ethanol manufacturers.
Written by urgent.news from The Economic Times - Economy's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
