Opinion

Points of law in the PepsiCo-potato case

Biswajit Dhar | Updated on May 07, 2019 Published on May 07, 2019

Hazy picture: The benefits that the farmers are deriving are not clear. - RAMESH SHARMA

India’s Protection of Plant Varieties Act spells out rights of farmers vis-a-vis breeders, which resulted in a pushback for PepsiCo

The Protection of Plant Varieties and Farmers’ Rights Act (PPVFRA), which introduced intellectual property protection in Indian agriculture, faced its biggest test in its implementation phase of nearly a decade and a half, when PepsiCo India initiated legal proceedings against four farmers in Gujarat for “illegally” growing its potato variety registered under the PPVFRA.

The company applied for the registration of two hybrid potato varieties FL 1867 and FL 2027 in February 2011. These varieties were registered under the PPVFRA in February 2016 for a period of 15 years. PepsiCo marketed the latter variety under the trademark FC-5, and now is claiming that the Gujarat farmers are illegally using this variety.

After the bases of the cases were questioned, especially by farmers’ organisations, the company withdrew its cases, not before trying to bind the farmers it had framed, into its contractual arrangements.

Many questions

PepsiCo may have withdrawn the cases against the farmers, but this unsavoury occurrence brought to the fore many questions that were asked when the PPVFRA was on the drawing board. These questions span from some of the contentious provisions of the Act, to the manner in which it is being implemented. If these issues are not dealt with in keeping the spirit of the law, and perhaps more importantly, their potential adverse implications on farming communities, farmer-breeder conflicts could become more frequent and this would only push the farmers into deeper crises.

The PPVFRA was enacted in 2001 after engaging debates were held in the country for more than a decade as to how intellectual property rights should be introduced in Indian agriculture after the country joined the World Trade Organisation in 1995 and agreed to implement the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS).

The choice before India was to either enact a law that protected the interests of farming communities, or to accept the framework of plant breeders’ rights given by the International Union for Protection of New Plant Varieties (better known by its French acronym, UPOV Convention). The latter option was rejected primarily because the current version of UPOV, which was adopted in 1991 (UPOV ’91), denies the farmers the freedom to re-use farm saved seeds and to exchange them with their neighbours.

Indian version

Therefore, in the PPVFRA, India introduced a chapter on Farmers’ Rights, which has three legs: one, farmers are recognised as plant breeders and they can register their varieties; two, farmers engaged in the conservation of genetic resources of land races and wild relatives of economic plants and their improvement through selection and preservation are recognised and rewarded; and, three, protecting the traditional practices of the farmers of saving seeds from one harvest and using the saved seeds either for sowing for their next harvest or sharing them with their farm neighbours.

Article 39(1)(iv), which sanctifies the last-mentioned rights, states that farmers are “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 force of this Act” (emphasis added).

PepsiCo’s law suit against the farmers raised a number of critical issues, which the court appeared to have glossed over in its proceedings. The first issue is that planting a registered variety by the farmers is per se not an offence since the Act allows the farmers to re-use such varieties and to also share them with their neighbours, provided two conditions are met.

The first is that the farmers cannot sell “branded” seeds, which, according to PPVFRA, means “any seed put in a package or any other container and labelled in a manner indicating that such seed is of a variety protected” under the Act. The company claimed before the court that FC-5 was licensed to farmers “firstly (emphasis added) in Punjab to bring potatoes of the said variety on the buyback system”. The FC-5 variety could have been made available and distributed anywhere, and without the law being violated.

The second issue is that FC-5 has been registered as an “Extant Variety”, which is also a “Variety of Common Knowledge”. This, in other words, implies that the said variety of potato was already available in the country before it was registered and that there was “common knowledge” about this variety in the country. It may, therefore, be assumed that PepsiCo’s variety would surely have been produced in the country before it was registered.

Further, from the order of the judge on April 8, 2019, in PepsiCo India Holdings Pvt. Ltd. versus Bipin Patel, it can be gleaned that the company may have given incorrect information that FC-5 is a “new” variety instead of an “extant” variety.

Registration of extant varieties was allowed in the PPVFRA despite opposition from several experts, and the justification used was that farmers’ varieties can be registered under this provision. The benefits that the farmers are deriving are not clear, but what can easily be understood is that companies like PepsiCo that got the opportunity to register their older varieties can now sue the farmers for using known plant varieties.

Private investigation

A third issue that arises relates to the alleged modus operandi of PepsiCo. There are reports that the company employed a private intelligence agency to collect samples from the farmers’ fields. This reported surveillance was the exact copy of the infamous 1998 case, in which Monsanto had sued a Canadian farmer, Percy Schmeiser, and claimed that the latter was illegally using its genetically modified canola. Monsanto had reportedly engaged private investigators to raid his field and to collect samples, an act that drew global condemnation. Percy became the icon of the global resistance by farmers against commercial plant breeders, because of which Monsanto was not able to secure damages from him.

PepsiCo realised that it had crossed the Rubicon and withdrew the cases, but not before the company had made offers to the farmers to settle the dispute by entering into an agreement to purchase seeds from it and to then produce and sell on its terms and conditions.

This case has already become an example of how conglomerates exploit the laws to realise their objectives. The authorities need to ensure that the laws of the land are implemented in the true spirit in which they were enacted.

The writer is Professor, Centre for Economic Studies and Planning, JNU

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Published on May 07, 2019
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