By ChiniMandi

New Delhi: The United States has sought details from India on the use of government-held rice stocks for non-food purposes, including ethanol production, alleging that rice procured under India’s price support programme has risen beyond domestic food security requirements, The Economic Times reported.

The issue is expected to come up for discussion at the World Trade Organization’s (WTO) Committee on Agriculture meeting later this month.

Washington has alleged that India’s price support policies have contributed to a sustained increase in domestic rice stocks beyond domestic consumption requirements. According to the US, the excess stocks have resulted in government-held rice being released at prices below the acquisition cost and being diverted to non-food uses.

The US has specifically raised concerns over the allocation of rice held by the Food Corporation of India (FCI) to ethanol manufacturers. It said that in 2025-26, rising rice stocks prompted the Indian government to progressively increase allocations of FCI-held rice for ethanol production.

Referring to India’s notification on public stockholding for food security purposes, the US said India had exceeded the de minimis limit. Washington noted that stocks under the programme are intended to be acquired and released to meet the food security requirements of poor and vulnerable sections of the population, rather than to distort trade or affect the food security of other WTO members.

The US also pointed to India’s increase in free foodgrain allocations under food security programmes from 5 kg to 10 kg per person per month between April 2020 and December 2022.

It further said the Indian government had been supplying rice to states through the Open Market Sale Scheme (OMSS) at prices significantly below the acquisition cost under the price support programme.

According to the US, India resumed the allocation and sale of FCI rice to ethanol manufacturers through OMSS e-auctions in August 2024. It alleged that the government subsequently increased such allocations as rice stocks rose during 2025-26, with several million tonnes of FCI-held rice allocated for ethanol production.

Washington has sought an explanation from India on how the continued allocation of rice for ethanol is consistent with the requirements of the Bali Decision on Public Stockholding for Food Security Purposes.

The US has also questioned the continued increase in India’s administered price for rice, arguing that higher support prices encourage increased domestic production even when supplies exceed domestic food consumption requirements.

In addition, Washington has sought a detailed breakdown of expenditure by the central and state governments on public stockholding and distribution of foodgrains.

The information sought includes expenditure on foodgrain sales under food security programmes, subsidised sales of grains and oilseeds through the OMSS to private traders, and subsidised sales under the scheme to industrial users, including ethanol manufacturers.

Published Date: September 16, 2026