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BT Buzz: Pepsi vs farmers - Lay off the potatoes

Joe C Mathew     April 29, 2019

It's a battle for chips, not microchips but potato chips. PepsiCo, the $64 billion US global food, snack and beverage is battling four farmers of Sabarkantha in North East Gujarat for allegedly growing the FL 2027 variety of potatoes for which it has claimed Plant Variety Protection rights.

But the battle has moved from the courts to social media. And there are enough and more supporters for the farmers. After being inundated by media queries from across the globe, Kapil Shah, founder of Vadodara based NGO, Jatan Trust has just formed a WhatsApp group to proactively share news updates that are of interest to all such people at one go.

"Deputy chief minister of Gujarat Nitin Patel says the state government will become a party to help farmers", was Shah's message, accompanied with a video clip of a Gujarati news channel. This is a live-commentary-of-sort on the WhatsApp group of PepsiCo's litigation with the farmers. "Government advocates (legal counsels) will argue the case in (the) court for farmers; government has created pressure on Pepsi to withdraw the case", the English translation of minister Patel's public assurances follow soon after...

The quickest way to explain the media interest in Shah and the need for a quick response from him is based on the reactions it is generating on Twitter. In less than a week, solidarity towards the four Indian farmers is pouring in on Twitter from the US to Brazil and India. They are almost entirely against Pepsico. With consumers in more than 200 countries, Pepsico's decision to slap legal cases against a handful of Indian farmers who, according to Pepsico's petition, were cultivating the FL 2027 or FC5  variety of potatoes, which apparently helps in higher yield, enhanced quality, leading to remunerative income for farmers, without its authorisation seem to have not gone well with Twitteratis.

ALSO READ: PepsiCo seeks Rs 1 crore from four farmers it sued for patented Lay's potatoes

Pepsico sought compensation of Rs 1.05 crore from each farmer for estimated damage caused by infringing the intellectual property rights (IPR) the company has by virtue of registering this particular variety of potato seed under India's Protection of Plant Varieties and Farmers' Rights (PPV&FR) Act, 2001. Without getting into the legal aspects of the issue, Twitter followers seem to have their verdict clear. "#PepsiCo this will be an easy boycott for me. Farmers and people are more important than your profits" tweets AmaryllisTV.

The global response generated through media reports aided by Shah's inputs and on Twitter have made Pepsico realise the damage a potential negative propaganda can play on its global business is not small. The company has played safe too. The India arm of PepsiCo has already proposed to amicably settle with people who were "unlawfully using seeds of its registered variety". PepsiCo has proposed that the four farmers may become part of its collaborative potato farming programme that gives them access to higher yields, enhanced quality, training in best-in-class practices and better prices." In case, they do not wish to join this program, they can simply sign an agreement and grow other available varieties of potatoes", a Pepsico statement says.

What triggered a global outbreak of negative propaganda for Pepsico and an internal vigil within India from NGOs was the hearing of a case on April 8, 2019 in an otherwise inconsequential commercial court of Gujarat. Pepsico India, in a case filed against four persons - Bipin Patel, Vinod Patel, Chabilbhai Patel and Haribhai Patel from Sabarkantha district of Gujarat - accused them of using proprietary potato seeds of Pepsico that are used to manufacture potato chips sold under the Lay's brand name/trade mark without the company's authorisation. The company accused the farmers were "illegally growing, producing, selling without permission, such variety in violation of the statutory right granted under Sections 64 and 65 of the PP&FR Act".

Pepsico is a leader is India's savoury snacks market. "The market value of this high-growth segment is expected to reach Rs 141,094 crore by 2020. Ethnic and traditional snacks is the largest category in the Indian savoury snacks market", says a report called "High growth segments of Indian Food and Beverage Industry" prepared by the Ministry of Food Processing Industries on the occasion of World Food India 2017. The report puts PepsiCo India as the market leader in savoury snacks in India with a 31% share. The company's two key brands are Lay's for western salted snacks and Kurkure for traditional Indian ones. PepsiCo's eagerness to seek legal remedy to what it considers as an infringement of its rights on its products is thus understandable.

"I came to know about such a case through media reports. Then I tried to trace them (the farmers) through our local connections", says Shah, who is a proponent of organic farming in Gujarat. He says that it was then he realised that it was not a one off case, but five farmers were sued in another district court, in another part of Gujarat the previous year. "So, total nine farmers as of now. Last year's cases are also going on. Pepsico claimed Rs 20 lakh as compensation from the five farmers. This year it is Rs 1.05 crore, for the same issue, by the same company. That is where we felt like intervening", he says.

ALSO READ: PepsiCo offers 'amicable' settlement to Gujarat farmers: Either join us or don't cultivate our potatoes

What Kapil Shah and likeminded NGOs did was to amass support of 107 individuals and civil society organisations to petition against the action of PepsiCo against the very authority that operationalises the Act in question. A joint letter to the Protection of Plant Varieties & Farmers Rights Authority (PPVFRA) on April 24 said that as per the information gathered so far, "these farmers (against whom PepsiCo has initiated legal action) are small farmers holding around 3-4 acres on an average, and had grown a potato crop from farm-saved seed after they accessed the potato seed locally in 2018. PepsiCo apparently got a tip-off that the farmers were growing "its registered variety" of FL-2027 and in a completely unacceptable manner, hired a private detective agency to pose as potential buyers in front of the sued farmers, to take secret video footage and collect samples from farmers' fields sans disclosing its real intent", the petition says. "Later on, PepsiCo India Holdings got the samples tested in its own laboratory and sent the same to ICAR-CPRI, Shimla (Central Potato Research Institute) got reports confirming that the varieties being grown by the farmers are indeed FL-2027 or FC-5. Armed with this information, and presenting an estimated damage of more than one crore rupees against each farmer, the MNC filed legal suits against 4 farmers in early April 2019", the petition said. The letter said that everything about this entire operation was "in fact against the law, and it is not the farmers who are violating the law, but the company" as the "PPV&FR Act has always been projected as a law to protect farmers' rights  as the Protection of Plant Varieties & Farmers Rights Act was enacted in India as a sui generis framework at the national level, after India had signed on to the WTO TRIPS in 1995 and it has upheld the apriori rights of farmers of the country, by explicitly stating under Section 39 (1) (iv) of the Act, notwithstanding anything in the Act  "farmer shall be deemed to be 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".

PPFRA chairman K V Prabhu refused comment on the petition filed by the civil society groups as the matter was sub juidice. PPFRA is a quasi-judicial authority with powers of that of a civil court.

Ram Kaundinya, Director General of the Federation of Seed Industry of India (FSII) said that the Act allows the farmers to save and grow, and exchange seeds. However if the people who they (Pepsico) have filed case against are not just farmers, (but also traders), and if they are selling it as a branded seed, then there could be a problem, he explains. "This is a trend setter, because nobody (no company that has engaged with farmers for contract production) has done it so far. This (contract violations) are rampant in India. So this might set actually a good legal interpretation. Let us see how in the context of contractual cultivation, the courts will interpret the law, which is interesting to see", he says.

With PepsiCo expressing its willingness to settle the case out of court, and petitioners seeking time till the next hearing date of June 12 to decide upon the matter, one can only profess the outcome without any certainty. What is already happening is a firming up on opposition against PepsiCo and contract cultivation from various segments of Indian activist groups.

Shah's WhatsApp group has just flashed a news clip which said that Tamil Nadu Organic Farmers Association has asked the state government to check the entry of BT Brinjal seeds into the state, as apparently, when the farmers are held responsible for using seeds that are not traditional but are those with some proprietary ownership even if it happens without their knowledge, the pitfalls of such crops, in terms of the environmental damage it causes, will remain unaccountable.

One of the WhatsApp group members, enrolled by Shah - a New York number - has just quit.

ALSO READ: PepsiCo worried over Indian unit's legal action against potato farmers


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