Rice stocks diverted for ethanol come under WTO scanner

New Delhi: After the US, Canada has questioned India at the World Trade Organization (WTO) over the diversion of publicly-held rice stocks to distilleries for ethanol production.

Canada has sought details from India on the quantities of rice from public stocks supplied for ethanol production since 2020-21, whether the diversion is consistent with the food security objectives of WTO, and whether procurement targets under India's public stockholding programmes take anticipated demand from ethanol producers into account.

"Since 2020, and most recently for 2026-27, it appears that a significant quantity of rice held by the FCI (Food Corporation of India) has been made available to distilleries for ethanol production," Canada said, seeking information on the prices at which these stocks were sold to ethanol distilleries.


The questions will be taken up at the WTO's Committee on Agriculture meeting later this month. Referring to the public stockholding programmes for food security purposes under the WTO Agreement on Agriculture (AoA), which covers the acquisition and holding of stocks as an integral part of a food security programme, Canada sought an explanation from India on how diverting publicly-held rice stocks to ethanol production was consistent with the food security objectives of global trade rules.

It also asked New Delhi whether procurement targets under its public stockholding programmes took anticipated demand from ethanol producers into account, and how support associated with rice procurement at the minimum support price (MSP), when the stocks are subsequently used for industrial purposes, is reflected in India's notifications.

Canada's queries follow questions raised by the US on the issue in September. Washington had sought details from India on the use of rice stocks for non-food purposes, including ethanol production, alleging that government-held rice procured under the price support programme had exceeded the country's food security requirements, resulting in stocks being released below cost and diverted to non-food uses. The US claimed that in 2025-26, rising rice stocks had prompted New Delhi to increase allocations of FCI-held rice for ethanol production.