The fallout between US major PepsiCo and Gujarat’s potato growers underlines the looming threat to farmers’ rights in India over ownership of seeds
PepsiCo has sued Gujarat farmers for infringing on its intellectual property rights for cultivating FL 2027, one of two potato varieties registered by the company in 2016 (Photo: Adithyan PC) A legal battle over the right to grow the humble potato has caught global attention, after US snack and beverage giant PepsiCo sued a handful of farmers in Gujarat for cultivating a variety of potato that the multinational claims as its own. The American major uses the particular tuber in question for making Lay’s brand of chips.
The fight has all the elements of a classic David vesus Goliath battle. Pitted against the American behemoth, with revenues of over US $64 billion, are four small potato growers with minuscule farms in a country synonymous with acute agrarian distress. PepsiCo has taken the farmers to court for infringing on its intellectual property right (IPR) by cultivating FL 2027, one of two potato varieties registered by the company in 2016, although it has been in commercial use since 2009. Registration confers an exclusive right on the breeder to produce, sell, market, distribute, import and export the said variety.
The pertinent question is who can grow what crops, as IPR has been invoked for the first time under a law governing the rights of breeders and farmers in India. The law is the Protection of Plant Varieties and Farmers’ Rights Act, 2001 (PPV&FRA), a sui generis system, enacted to meet the World Trade Organization’s demand for legislation to protect breeders’ interests.
India’s law is unique because it seeks to protect the rights of breeders as well as farmers. There is a special chapter that safeguards farmers’ access to seeds too, and it is the only legislation globally guaranteeing farmers’ rights. Other countries subscribe to an instrument called the Union for the Protection of Plant Varieties (UPOV), an international agreement with several versions, which offers limited rights to farmers.
India has been under constant pressure from the US to join UPOV, an inter-governmental organisation based in Geneva. Several international bodies have warned India against joining UPOV, as they feel it upholds only commercial interests.
THE PEPSICO CHALLENGE to PPV&FRA comes in the wake of an ongoing dispute by agro biotech giant Monsanto, now a part of Bayer, against domestic seed companies on the question of IPRs on genetically modified seeds. Though PepsiCo has withdrawn its lawsuit against two farmers, who are brothers, in view of the fierce backlash from a host of farmers’ organisations, the decision of the courts would set a precedent.
The sued farmers claim that they bought the potato seeds locally where apparently these are available, in what is known as the grey market, and are taken aback by the infringement suit slapped on them. The growers believe that they are entitled to grow and sell any variety without hindrance in the country. The IPR issue is unknown to most of them, amidst reports that at least one of the farmers is also a trader, who supplies potatoes to rival chips manufacturers.
PepsiCo’s offer to call off its demand for compensation is contingent on the four farmers either joining the company’s vast contract farming programme—12,000 farmers are reportedly part of what the chips maker calls a collaborative project—or by signing an agreement that they will no longer grow FL 2027, also designated as FC 5 in trade.
However, for the farming community that would set a bad precedent, and undermine the guarantees enshrined in PPV&FRA, champions of farmers’ rights point out.
In India, the authorities as well as agriculture support groups set much store by the PPV&FRA, generally viewing it as a system that did not give undue advantage to breeders at the cost of farmers. But perceptions have been severely jolted in the wake of the potato dispute.
PepsiCo’s Indian subsidiary, PepsiCo India Holdings (PIH), has been prosecuting farmers and cold storage units in Gujarat, one of the top potato growing states in India, since 2018. However, it was only in April this year that the issue was blown out of proportion when details of the huge compensation sought by PIH from the four farmers caught the attention of farmers’ groups and non-profits working in the agriculture sector.
There are said to be nine cases in total against farmers and cold storage owners. PIH has sought high compensation worth Rs 1.05 crore from each of the four farmers for infringing on its IPR.
Legal experts and farmer support groups are emphatic that the law gives a clear edge to the farmers as per Section 39(1) (iv) of the Act, which overrides other provisions to guarantee the right of farmers to use seeds as they wish. Shalini Bhutani, an independent legal researcher and policy analyst on IPR issues, points out the crucial phrase of this section.
It says that “notwithstanding anything contained in this Act,” a farmer is entitled “to save, use, sow, resow, exchange, share or sell his farm produce, including seed of a variety protected under this Act in the same manner as he was entitled before the coming into the force of this Act, provided that the farmer shall not be entitled to sell branded seed of a variety protected under this Act”.
That may be so, and the courts may be persuaded of this argument when the next hearing is held on June 12. The bigger concern is the way the plant varieties regime is being implemented by the PPV&FRA authority. For instance, a total of 25 varieties of potato have been registered by the authority, with 15 of these IPRs going to the Indian Council of Agricultural Research (ICAR), and 10 to private companies.
Not a single farmers’ variety has been registered so far, in spite of the law listing three categories under which farmers’ varieties would and should be registered. Interestingly, PepsiCo’s two varieties come under the category of “Varieties of Common Knowledge (VCK)”. Even more interesting is that FL 2027 is similar to an ICAR variety.
THE IPR REGIME suffers from significant structural problems, says N S Gopalakrishnan, who says the data on registrations demonstrates a deeply disturbing trend: the Indian law, unlike UPOV, is facilitating the enclosure of what were once publicly available varieties earlier used freely by the Indian farming community. The encirclement is coming from corporate interests and also government institutions, which view their IPRs as potential money spinners.
Gopalakrishnan, one of India’s foremost IPR academics who has been studying the law since its promulgation nearly two decades ago, says the problem lies with the PPV&FRA authority. “It has effectively taken adva ntage of gaps in the law to re-write the clear mandate of Parliament in order to enable modern breeders and seed industries to enclose publicly available varieties,” he says.
Gopalakrishnan, who is honorary professor at the Inter University Centre for IPR Studies, Kochi, warns that the private seed industry is making a serious attempt to leverage the maximum benefit from this new enclosure movement, which was intended to benefit the farming community.
According to him, it is important to track and examine the nature of VCK that the seed companies are converting into private property, because it has serious implications for access to seeds that were until now freely available to farmers. “This is the primary concern,” he adds.
Statistics compiled by Gopalakrishnan are deeply disturbing. Nearly all the VCK registered till February 2018 have gone to the seed industry (320 in all), while not a single farmers’ variety has been registered in this category even though specific regulations were made in 2009 to facilitate the inclusion of farmers’ varieties under the head of extant varieties.
Gopala-krishnan says this trend has to be arrested, either through a judicial intervention or by Parliament to protect the future of Indian agriculture and the interests of poor farmers. There is no doubt that the plant varieties regime is in need of a clean-up before it is too late.
(This article will be published in Down To Earth's print edition dated May 16-31, 2019)
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