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Case against farmers, poor documentation — why PepsiCo India lost Lay’s variety potato rights

PPVFRA has revoked a plant variety protection certificate granted to PepsiCo India for the FC5 potato, a special variety that was grown exclusively for Lay’s chips.

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New Delhi: PepsiCo India has lost the rights to its FC5 potato variety, grown exclusively for its popular Lay’s potato chips.

On Friday, Protection of Plant Varieties and Farmers’ Rights Authority (PPVFRA) Chairperson K.V. Prabhu passed an order in New Delhi, revoking a PVP (plant variety protection) certificate granted to PepsiCo (India) Holdings Pvt. Ltd for the FC5 potato. 

The PPVFRA is set up under the Protection of Plant Varieties and Farmers’ Rights Act 2001.

The authority noted that the registration for FC5 was granted to PepsiCo India despite the fact that it hadn’t submitted several documents at the time of registration. It further pointed out many discrepancies in the process of granting the registration, and highlighted the “hardship” this caused to farmers.

The order came on an application filed by Kavitha Kuruganti, convenor of the Alliance for Sustainable and Holistic Agriculture, to revoke the food giant’s registration. Soon after the order was passed, Kuruganti tweeted that this would “prevent any other seed or food company from transgressing legally granted farmers’ seed freedoms in India”. 

“This case is a +ve test case when it comes to operationalisation of progressive provisions in India’s unique law,” she added.

Here’s a look at why this potato variety is special, and why the authority has now cancelled PepsiCo’s registration.

Also read: SKM forms panel for dialogue with Modi govt on MSP, ex-gratia for kin of farmers who died

Lower moisture content in potato

The FC5 variety, registered in the US as FL2027, has 5 per cent lower moisture content than other varieties. With 80 per cent moisture content, as compared to the usual 85 per cent, this variety is considered more suitable for processing and therefore, for making snacks such as potato chips.

The variety was first cultivated by Dr Robert W. Hoopes, who holds the most potato patents and potato variety protections in the whole world. He was hired by the Frito-Lay Company (an American subsidiary of PepsiCo) as a Principle Scientist/Potato Breeder at the Research Center, US in 1987.

He then developed disease resistant potato varieties superior in flavour and colour. Several of his varieties are grown all over the world for PepsiCo’s famous potato chips. 

FL2027 came to be registered in the US in 2005 and was put to commercial use in India in 2009, according to a Quartz report. PepsiCo had then granted licence to some farmers in Punjab to grow the variety on a buyback system. This arrangement allows the company to buy all the produce from these farmers at pre-decided rates. 

PepsiCo applied for registration of the potato variety in India in June 2011. It was granted in 2016. 

The hot potato case

In April 2019, PepsiCo sued nine Gujarat farmers for cultivating the same potato variety, accusing them of infringing its intellectual property rights (IPR). It sought over Rs 1 crore each from the farmers for alleged patent infringement under the Protection of Plant Varieties and Farmers’ Rights Act, 2001.

The IPR infringement case triggered a backlash from farmers and political parties alike. However, PepsiCo soon withdrew the suit “after discussions with the government”. In a statement, it said that it was “relying on the said discussions to find a long term and an amicable resolution of all issues around seed protection”.

Kuruganti then filed the application for revocation of the certification in June 2019, concerned about the impact of the registered variety on the livelihood of the farmers. She had sought revocation on several grounds, including incorrect information provided by PepsiCo, and alleging that the grant of protection was not in public interest.

Also read: Six reasons why potatoes are good for you

Farmers’ rights supersede PepsiCo’s, said plea

Among other things, Kuruganti claimed that PepsiCo had violated the 2001 law by suing the farmers.

The law lists down farmers’ rights, saying that “a 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 coming into force of this Act”.

According to the PPVFRA order, Kuruganti asserted that by suing the farmers, PepsiCo violated this right and that “the farmers’ rights supersede the right given to the breeder (PepsiCo in this case)”. Additionally, she also alleged that the registration was against public interest as PepsiCo had “harassed them (farmers) by dragging them to courts by filing cases of infringement against them”.

She also pointed out that necessary documents were not submitted at the time of registration. For instance, while Dr Hoopes was shown as the breeder of the variety, the application for registration was filed by Recot Inc, later changed to Frito-Lay North America (FLNA). However, only an unstamped assignment deed between Hoopes and FLNA was submitted, and no assignment  deed between FLNA and PepsiCo India was submitted.

PepsiCo had claimed that there was an oral assignment between it and FLNA, a submission which was rejected by the authority. PepsiCo India and FLNA are both affiliates of PepsiCo, Inc. 

‘Hardships to the farmers’

In its order, the authority also noted discrepancies in the date of first sale of the variety, as disclosed by PepsiCo. 

“No doubts remain in the claim of Revocation Applicant (Kuruganti) that several farmers have been put to hardship including the looming possibility of having to pay huge penalty on the purported infringement they were supposed to have been committing which did not eventually happen as on date, simply because without being the legitimate breeder or his successor and also not being the assignee of the breeder of the potato variety FL 2027, the Registered Breeder (PepsiCo) exercised his Plant Breeder’s right to file a suit for infringement against farmers (though it was subsequently withdrawn) the fact is that they have been put to hardship. This violates public interest,” asserted the order.

The authority also opined that the Registrar in this case had been “superficial by only cursorily glancing through information documentation provided in reply to his own query to the Applicant (PepsiCo) while accepting incomplete or obviously incorrect documents”.

“The Registry and the Authority have many lessons to take from this matter as it has unfolded above, so that neither the plant breeders who legitimately deserve to have their rights to be exercised on the varieties bred by them by registering those by the Authority nor the user-farmers who in turn, equally deserve to get their due farmers’ rights protected so that their livelihoods are not put to jeopardy needlessly, as denied of what is due to them on registered plant varieties,” it observed.

(Edited by Amit Upadhyaya)

Also read: Potato, mango, guava, gram, mustard can transform UP’s farm economics, ADB report says


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