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Above: The Gurugram-based headquarters of PepsiCo India/Photo: hqcorporateoffice.com

Under pressure from the political class, farmers’ groups, activists and social media, the American soft drink and snack major PepsiCo offers a settlement to the farmers it sought to sue

By RK Misra in Ahmedabad

By any yardstick, it was an unequal battle. On one side was PepsiCo, one of the world’s top food and drink companies, and on the other four ordinary farmers in Gujarat. The former sued the latter, charging them with growing a variety of potatoes that has been exclusively copyrighted by the company for their Lay’s chips. Saying the four farmers were not authorised to grow this specific variety, PepsiCo India sued them for Rs 1 crore each. However, in the end, it was the latter who got the better of the food and beverage major after their larger fraternity bonded together and forced it to withdraw its lawsuit.

PepsiCo India, the desi subsidiary of the US food and beverage giant, in a statement issued on May 2, 2019, said: “After discussing with the (Gujarat) government, the company has agreed to withdraw cases against the farmers. We are relying on the said discussion to find a long term and an amicable resolution of all issues around seed protection.”

In what is perhaps the first instance in the country, the multinational sued the farmers for alleged infringement of IPR of a plant variety registered under the Protection of Plant Variety and Farmers Rights (PPV&FR) Act, 2001, and filed cases against them from the Sabarkantha and Aravalli districts in Gujarat.

Last month, farmers from Sabarkantha found themselves hauled up before an Ahmedabad commercial court for allegedly growing a variety of potato (FL 2027, also named FC5) to which PepsiCo India claimed exclusive rights by virtue of a Plant Variety Certificate (PVC) under the Act. The farmers, who have just about three to four acres of land holdings, were slammed with a law suit each seeking Rs 1 crore for an “estimated damage” to the food major from the alleged infringement of its IPR for the potato variety it uses for its “Lay’s brand of chips”. The FC5 variety of potato whose commercial use was started in 2009 has low moisture content considered good for making snacks like potato chips.

On April 8, Justice MC Tyagi passed an ex parte ad interim order restraining the farmers from growing the potato variety after observing that PepsiCo India had established a “prima facie case”. On April 26, the judge extended his earlier order until the next hearing on June 12.

As the issue exploded in the public domain, farmer unions, politicians, cutting across ideological divides, and activists threw their weight behind the growers and exhortations went out on social media calling for a boycott of all PepsiCo India products in India. Over 190 activists in a letter urged the centre to ask PepsiCo India to withdraw its “false” cases. In the letter to the Union agriculture ministry, the signatories sought financial aid and protection of the rights of farmers who have been sued.

“This is a matter of concern with regard to this set of farmers who have been sued and intimidated as well as others who could be similarly bullied by seed and food corporations through vexatious litigation in the assertion of plant breeder rights,” they said. The signatories, cutting across farmer unions, food activists, NGOs and agricultural journalists, and others, also sought financial assistance for farmers from the National Gene Fund for the cost of the legal suits as well as a notification that no company can trespass into the farmers’ fields “without due intimation and the prior informed consent from the concerned farmers.”

The farming community in Gujarat was quick to rise to the support of the sued farmers. A representative organisation, Gujarat Khedut Samaj, said it would challenge the soft drink major’s stand. Said its president Jayesh Patel: “Even if the farmer grows potatoes all his life, he will never be able to make enough money to pay up the sought compensation. We shall not only fight in court but also campaign countrywide against it,” he added.

According to Patel, the company had entered into a contract farming agreement with the farmers last year for producing the variety of potato. From the produce, the company purchased potatoes that were 45 mm or bigger in size and the remainder were returned to the farmers. The farmers used these, considered
sub-standard, as seeds to grow their own potato crop. The company now wants royalty on it and therefore they were sued.

Dr Kanu Kalsaria, a former BJP MLA who quit to successfully take on the might of the Narendra Modi establishment in Gujarat as well as corporate giant Nirma, is clear that the farmers must be backed unconditionally against the multinational. “The farmers’ right to grow anything new cannot be compromised and, if need be, a campaign should be unleashed to protect their rights,” he adds.

The RSS-affiliated Bharatiya Kisan Sangh (BKS) also terms the PepsiCo India claim as a disguised attempt to intimidate farmers and wipe out competition from local potato chips makers. “The company should immediately and unconditionally not only withdraw the cases but desist from such unscrupulous methods like using detective agencies to trap innocent farmers and resorting to video recordings of the same,” says Ambubhai Patel, vice-president of BKS.

Though the company had already conducted an analysis of the samples it had got collected and arrived at the conclusion that the farmers were indeed growing their registered variety, it nevertheless successfully urged in the court  that a court commissioner be appointed to conduct an inquiry and send it to the government laboratory as well as the potato research centre at Shimlafor analysis.

Accordingly, Paras Sukhwani was appointed the court commissioner; after conducting field investigations he submitted his report in a sealed envelope.

Kapil Shah of the Vadodara-based NGO, Jatan, is emphatic that the farmers’ a priori rights to seeds and planting material are clearly protected under the PPV&FR Act, 2001, as the law has been designed in compliance with the WTO’s TRIPS agreement (Trade Related Aspects of Intellectual Property Rights). A letter in this regard has already been sent to Dr KV Prabhu, chairperson, Protection of Plant Varieties and Farmers’ Rights Authority, Ministry of Agriculture. “This is a matter of seed sovereignty, food sovereignty which is contiguous with the country’s sovereignty,” he adds.

Ahmed Patel, senior Congress leader, termed the food company’s legal action brazenly wrong and said that the state government needed to act forthwith. “Corporate interests cannot dictate what our farmers should grow,” he added. Patel is on the same page with another RSS affiliate, the Swadeshi Jagran Manch (SJM), which also waded into the controversy and said that the court case was an act of extortion by the company and highly unethical and illegal. “It will be in the interest of the company to resolve it at the earliest for we shall take care of the interests of our farmers,” the SJM said.

This may perhaps be the first time that the ruling BJP and the opposition Congress have come together to support farmers in the dock. With a ground­swell of support for farmers, in the public eye it became a David versus Goliath battle.

It was this perception and calls for boycott of all PepsiCo India products that ultimately made the company review its strategy.

Even the Gujarat government, aware of the damage potential of the issue, made it clear that it would support the potato farmers. A day after Ahmed Patel’s tweet, Gujarat Deputy CM Nitin Patel said that it had received a representation from farmers and would intervene in court, seeking to be impleaded as a party backing the farmers.

As support for the farmers began to peak, PepsiCo India in a statement said on May 2 that the company from the very start had offered an amicable settlement to farmers. “PepsiCo has been in India for over 30 years and has over this time developed a best in class collaborative potato development programme which has benefited thousands of farmers countrywide. They have benefited from higher yields, enhanced quality, best in class practices and better prices thus helping in improved livelihood.

To safeguard the larger interest of farmers, we have been compelled to take judicial recourse to protect our registered variety,” the statement said. It came a day after the Gujarat government made known its intention to join the legal dispute as a party on the side of the farmers.

While the demand to put PepsiCo India in the dock may have become shrill, there is also an opinion that farmers in the country should be made accountable. Abuse by big farmers and traders has already forced a US seed company to exit the country after its seed variety was misused.

The farmers’ “act” of selling the FC5 variety of Pepsi’s patented product in the open market will not be able to stand scrutiny in court, more so in the light of the evidence collected, an expert, who did not wish to be identified, revealed.

In the Monsanto case earlier and the current PepsiCo India matter, everyone is on trial—there are issues of corporate interests and farmers’ rights, the issue of how the PPV&FR Act plays out as well as how the state governments and the centre fare in implementing the patent laws.

A comparatively infant law needs to be put through its paces to safeguard both the farmers’ interests and scientific innovation for balanced growth. Many experts say that a judicial scrutiny would not have been out of order.

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