PepsiCo Vs Potato Farmers Dispute


PepsiCo Vs Potato Farmers Dispute

    PepsiCo Vs Potato Farmers

Food and beverages giant PepsiCo dragging potato farmers to court for allegedly growing its registered potato variety used to make ‘Lays’ chips. Four small farmers from Sabarkantha district were sued Rs 1.05 crore each, although they cite a law allowing them to grow and sell even registered plant varieties. Faced with growing social media outrage, boycott calls from farmers groups and condemnation from major political parties, the company finally agreed to withdraw cases after talks with the Gujarat government.
In 2009 PepsiCo introduced the FC5 variety of potato that it uses to make its popular ‘Lays’ potato chips to India. The potato variety is grown by approximately 12,000 farmers who are a part of the company’s collaborative farming programme, wherein the company sells seeds to farmers and has an exclusive contract to buy back their produce.
In 2016, the company registered the variety under the Protection of Plant Varieties and Farmers’ Rights Act, 2001 (PPV&FRA). Finding that farmers who were not part of its collaborative farming programme were also growing and selling potatoes of this variety in Gujarat, PepsiCo filed rights infringement cases under the Act against some farmers in Sabarkantha, Banaskantha and Aravalli districts in 2018 and 2019.
The Rs 4.2 crore lawsuit against four small farmers in Sabarkantha district was heard by an Ahmedabad commercial court on April 9, and an ex-parte injunction ordered against the farmers. However, farmers’ rights groups across the country began a campaign against PepsiCo, requesting the Protection of Plant Varieties and Farmers’ Rights Authority to intervene in the case and bear the farmers’ legal costs using the National Gene Fund.
At the April 26 hearing, the company offered an out-of-court settlement to the farmers on the condition that they give an undertaking not to grow the registered variety and surrender existing stocks or to join its collaborative farming programme.
Both PepsiCo and the farmers cite the same Act to support their opposing positions. The PPV&FRA was enacted in 2001 to comply with the World Trade Organisation’s Agreement on Trade-Related Aspects of Intellectual Property Rights. PepsiCo based its suits on Section 64 of the Act dealing with infringements of the registered breeder’s rights and subsequent penalties.
The farmers’ legal case depended on Section 39 of the Act, which allows the cultivator to “save, use, sow, resow, exchange, share or sell his farm produce including seed of a variety protected under this Act” with the sole exception of branded seed.