Local farmers vs powerful global corporations

IT WAS more than your typical David versus Goliath stand-off. Out in the dusty potato fields of Gujarat, the struggle features the food behemoth PepsiCo India supported by Bollywood brand ambassadors on the one hand, and small Indian farmers backed by civil society on the other.

At stake were two competing interests - the intellectual property rights (IPR) to the humble potato that the company turns into its bestselling Lay's brand of chips, and the livelihood of poor farmers.

The Indian unit of one of the largest snack food manufacturers in the United States, PepsiCo, this month lost the exclusive rights to use a special variety of potato grown to its specifications in India's Gujarat state for its potato chips, signalling the rising power of local farmers against large corporations.

The timeline has an epic script. In 2009, PepsiCo introduced its potato variety in India which was grown by about 12,000 farmers with whom the company had an exclusive contract to sell seeds and buy back their produce.

In 2016, the company registered the potato variety under India's Protection of Plant Varieties and Farmers Rights Authority Act (PPV&FRA Act of 2001). The company alleged that farmers who were not contracted under its so-called "collaborative farming programme" had also been growing and selling its variety in India.

Lawsuit and outrage

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To prevent them, PepsiCo filed cases for infringement of its IPR in April 2019 against 9 farmers in Gujarat, including a Rupees 4.2 crore (around US$552,535) suit against 4 small farmers under the PPV&FRA. The law suit set off a storm of outrage.

As popular protests mounted in the middle of an important election, the government of Gujarat requested the company to withdraw its legal cases in May 2019. This set the stage for the non-governmental Alliance for Sustainable and Holistic Agriculture to file an application to revoke the registration of PepsiCo India's potato variety in June 2019.

The food giant was confident of its case, and it went to town with an advertising campaign for its new chip flavours. In January this year, just ahead of Valentine's Day, Lay's launched two new flavours with an ad film featuring the popular film stars Alia Bhatt and Ranbir Kapoor who promoted Lay's Herby Crush and Lay's Cheesy Love made with potatoes.

This month the PPV&FRA, while revoking the company's registration, stated that the registration for the potato variety known as FC5, was granted to PepsiCo India despite the company not submitting several documents at the time of registration, and that there were many discrepancies in the process of granting the registration. The PPV&FRA did not entertain the company's argument that some of these documents/agreements were oral. PepsiCo India has stated that it is reviewing the rejection order.

The PPV&FRA verdict notes that "farmers have been put to hardship including the looming possibility of having to pay penalty on the purported infringement they were supposed to have been committing", which "violates public interest".

Indian civil society believes that the verdict may prevent other seed or food companies from encroaching on the freedom of farmers to save their seeds and to use them as they please. The Gujarat farmers applauded the verdict, calling it a victory for growers and their right to cultivate any food they want.

So, what does the case of Lay's chips mean for Indian farmers and for foreign companies operating in India? The story goes back to the late-1980s when the United States began to pressure developing nations to broaden the scope of patent protection, with India as one of the chief targets of US policy.

When IPR was included in the Uruguay Round of trade negotiations, India resisted their inclusion in the World Trade Organization (WTO) but ultimately signed onto the agreement because if it wanted to remain in the WTO it had to accept all the agreements.

At the time, India had hoped to gain trade concessions in textiles and agriculture in exchange for offering greater IPR protections.

When the regime of the Trade Related Aspects of Intellectual Property Rights (TRIPS) began in January 1995, it expanded the scope of IPR in plant cultivation.

Moreover, TRIPS required IPR protection for multinationals to enable them to operate in developing countries without running risks.

Yet, the very essence of the TRIPS agreement sidesteps the right to food security by its indifference to rural and tribal communities.

There is a powerful argument for TRIPS to be compliant with the Convention on Biological Diversity (a global agreement signed in 1992), which seeks the conservation of biological diversity, the sustainable use of natural resources, and the fair and equitable sharing of benefits arising from genetic resources.

The last part - fair and equitable sharing of benefits - lies at the core of the current controversy between PepsiCo India and Gujarat farmers. Beyond this specific case, farmers must be accorded their universal right of access to food security, which should not remain in the hands of powerful corporates.

Ownership of genetic resources

The persistent push by multinationals to claim ownership over genetic resources undermines the effort by developing countries to safeguard the interests of their farmers, because patents deny them the ability to make a living. At the present moment, the entire subsistence economy of the poor is under threat as their access to biological resources is being restricted by corporations that are getting control of vast swathes of such resources.

Yet, the seed industry insists that there is a problem with the law. "There must be a mechanism to catch and punish those who illegally sell the variety, but enforcement is left to states and is patchy at best," Federation of Seed Industry of India director general Ram Kaundinya recently told The Hindu newspaper, citing an example of the rampant spread of unauthorised and genetically modified cotton seeds.

At the heart of the issue is the question of ownership of seeds. The protection provided to farmers opens up a grey area between farmers and companies. It is, of course, laudable that the law permits farmers to grow varieties of food, sell the produce, and even sell unbranded seeds. But it is another matter when some farmers sell registered seeds to a competitor, for instance.

At this historical moment, Indian farmers are extremely sensitive to food companies transgressing into their traditional lands. A new blueprint and a new concord is needed that preserves the interests of all sides.

The writer is editor-in-chief of the Rising Asia Journal