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RSTV: THE BIG PICTURE- PEPSICO V/S POTATO FARMERS


RSTV: THE BIG PICTURE- PEPSICO V/S POTATO FARMERS


Introduction:

A variety of potatoes developed by FMCG giant Pepsico’s India division has triggered a patent-infringement battle in the country. The snacks and beverages major has sued a few farmers in Gujarat for growing potatoes which the company uses to make its Lay’s chips. The MNC has sought Rs 1 crore each from four farmers for cultivating the FC5 potato variety. In an Ahmedabad commercial court, the company claimed it is the registered breeder of FC5 under India’s Protection of Plant Varieties and Farmers’ Rights Act. PepsiCo has been developing and registering a variety of potatoes in India since the production of Lay’s took a hit in 2008. The overall supply of potatoes was hit that year due to crop failure in the states of Maharashtra, Karnataka, and Punjab. The company currently works with 24,000 farmers across the country in states like West Bengal, Maharashtra, Punjab, Gujarat, Uttar Pradesh, Karnataka, Bihar, Haryana, and Chhattisgarh

 

The Protection of Plant Varieties and Farmers’ Rights (PPV&FR) Act, 2001:

  • Enacted by India in 2001 adopting sui generis system.
  • It is in conformity with International Union for the Protection of New Varieties of Plants (UPOV), 1978.
  • The legislation recognizes the contributions of both commercial plant breeders and farmers in plant breeding activity and also provides to implement TRIPs in a way that supports the specific socio-economic interests of all the stakeholders including private, public sectors and research institutions, as well as resource-constrained farmers.

 

Objectives of the PPV & FR Act, 2001:

  • To establish an effective system for the protection of plant varieties, the rights of farmers and plant breeders and to encourage the development of new varieties of plants.
  • To recognize and protect the rights of farmers in respect of their contributions made at any time in conserving, improving and making available plant genetic resources for the development of new plant varieties.
  • To accelerate agricultural development in the country, protect plant breeders’ rights; stimulate investment for research and development both in public & private sector for the development new of plant varieties.
  • Facilitate the growth of seed industry in the country which will ensure the availability of high quality seeds and planting material to the farmers.

 

Rights under the Act:

Breeders’ Rights : Breeders will have exclusive rights to produce, sell, market, distribute, import or export the protected variety. Breeder can appoint agent/ licensee and may exercise for civil remedy in case of infringement of rights.

Researchers’ Rights : Researcher can use any of the registered variety under the Act for conducting experiment or research. This includes the use of a variety as an initial source of variety for the purpose of developing another variety but repeated use needs prior permission of the registered breeder.

Farmers’ Rights:

  • A farmer who has evolved or developed a new variety is entitled for registration and protection in like manner as a breeder of a variety;
  • Farmers variety can also be registered as an extant variety;
  • A farmer can save, use, sow, re-sow, exchange, share or sell his farm produce including seed of a variety protected under the PPV&FR Act, 2001 in the same manner as he was entitled before the coming into force of this Act provided farmer shall not be entitled to sell branded seed of a variety protected under the PPV&FR Act, 2001;
  • Farmers are eligible for recognition and rewards for the conservation of Plant Genetic Resources of land races and wild relatives of economic plants;
  • There is also a provision for compensation to the farmers for non-performance of variety under Section 39 (2) of the Act, 2001 and
  • Farmer shall not be liable to pay any fee in any proceeding before the Authority or Registrar or the Tribunal or the High Court under the Act.

 

Problems with proprietary seeds:

Gujarat and Rajasthan farmers have been cultivating FC-5 variety of potato which has been registered by PepsiCo under the Protection of Plant Varieties and Farmers’ Rights Act 2001 (PPVFRA) for their own use.

The FC-5 variety, used to make Lay’s chips, is grown under a contract farming deal, by 12,000 farmers in Gujarat’s Sabarkantha district.

Concentration of Corporate power. This concentration has made a huge dent in farmer’s pockets.

Farmers who buy GMO seeds must pay licensing fees and sign contracts that dictate how they can grow the crop and even allow seed companies to inspect their farms.

GMO seeds are expensive and farmers must buy them each year or else be liable for patent infringement.

Farmers are not using genetically distinctive seeds adapted to local conditions and farming traditions, they are instead adapting local conditions and traditions in order to use genetically standardised seeds, to ruinous effect.

 

 

Why Pepsico has taken this particular step?-Background

  • It is a relationship between the supply lines of raw material, and a consumer company which is consuming it for food processing. PepsiCo, as a consumer company, is assuring the raw material supply in a stabilized manner by involving farmers, giving them the input of seeds, and giving them inputs of other pre-harvest items which are needed towards making good quality potato. Another aspect is the farmer who is getting the assured return on his investment by investing on a particular seed.
  • This dispute is a normal phenomenon in the Indian scenario when farmers use the seeds from the previous crops.
  • This particular case is a little harsh on the farmers because unknowingly, they have ignored a kind of law. Farmers are poor in India. They are ill-informed. They are not properly trained. They are not educated.
  • Thus, companies should take an initiative towards educating the farmers. Companies need to take more responsibility towards training and educating the farmers, alongside the government.
  • Education and training of farmers needs to be taken up as seriously as any other initiative aimed towards skill development.

 

Contract Farming issues:

  • We have seen conflicts between the farmers and the companies.
  • PepsiCo started their business with tomatoes in Hoshiarpur, Punjab. They gave farmers the best technology back then. The company also gave them an assured price. The farmers thought that they would benefit from it
  • There was some kind of contract farming arrangement.
  • However, once it was seen that when the market prices were good, the farmers did not honour the contract and they did not sell it to the company at the assured price. They were instead trying to sell the same in the market.
  • In the next year when the market prices were low, the companies made a plan to buy the produce from the market.
  • Thus, from both the sides, there was a dishonouring of the contract which was being done.

 

Way Forward:

  • Government should also take responsibility for the implementation of various laws.
  • Building of trust and a good relationship between the farmers and the companies.
  • Need of harmonized system in India, between farmers and companies.
  • Model contract farming act is having a lot of hopes, and every state should implement it fast.
  • Proper institutional mechanism to address this issue.
  • Process is participatory i.e. something in which the farmers also participate, then the same would augur well.

 

There should be absolutely no compromise on farmers’ rights and seed sovereignty. The state government should make the Act as the basis of any settlement, if at all, and anything less than that is unacceptable. It would have failed all the farmers in India and not just the sued farmers if it succumbs to corporate lobbying.

The withdrawal of the lawsuit by PepsiCo(after the episode) may be a welcome relief to several farmers who can neither afford to defend themselves in court, nor to abandon the cultivation of proprietary varieties.

It must, however, be a wake-up call to the government and policymakers who need to do much more to secure sustainable rural societies, protect soil health and promote seed sovereignty for the economic development of Indian farmers and of the entire nation.

Recent Update- Pepsico announced the withdrawal of the lawsuit.

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