PepsiCo Back-Pedals, Offers Out-of-Court Settlement to Farmers in Potato Case

PepsiCo had filed a civil suit against four farmers, alleging that they were "illegally dealing" in a type of potato plant that had been registered by the company.

New Delhi: PepsiCo has offered the potato farmers it recently sued in Gujarat over copyright infringement an out-of-court settlement, provided they agree to a set of conditions.

According to The Hindu Business Line, the PepsiCo counsel told the court, “Firstly, they have to sign an agreement with us to buy the seeds and sell the produce to us. Or, the farmers give an undertaking that they will never use our registered seeds without permission in future. Whatever stock they have at present, should be given to us.”

The farmers will consider the proposal and respond in due course. “A proposal has come and the farmers will think over it and decide in some time,” said Anand Yagnik, counsel for the farmers.

However, the farmers may not be willing to accept an out of court settlement. “We have been harassed by the company. But we will not bow down to such pressures from a multi-national corporation (MNC). We are prepared for a tough fight,” The Hindu Business Line quoted a farmer as saying.

Earlier this month, PepsiCo filed a civil suit against four farmers of Sabarkantha district in an Ahmedabad court. The company contention was that the farmers were “illegally dealing” in the company’s “registered variety” of potato plants, which is in contravention of the Protection of Plant Varieties and Farmers’ Rights Act, 2001. The company also demanded damages of Rs 1.05 crore from each farmer.

The company has argued that it is the registered breeder of the potato plant variety ‘FL 2027′, which is more commonly known as FC-5. This variety of potatoes is used by PepsiCo to manufacture potato chips under the brand name ‘Lays’. According to PepsiCo, the farmers were growing the particular variety of potatoes and ‘infringing the right’ of the company ‘under the act’.

PepsiCo has said that it received information to this effect in January 2019, without specifying how it got the information.

Activists have contended that PepsiCo hired a detective agency to do the job.

“Pepsi has a presence in the Sabarkantha area through its potato contract farming. It suspected that some farmers in the region who were not registered with Pepsi were growing the variety. They then hired a detective agency which went to the farmers posing as buyers and bought the potatoes,” said Sagar Rabari of the Khedut Ekta Manch, a farmers’ rights organisations based in Gujarat.

The Wire also spoke, over the phone, to three of the four farmers from Sabarkantha who have been sued by Pepsi. They allege that the following sequence of events took place: On January 29, a person by the name of Harjeet Singh visited the fields of the farmers and told them that he is an employee of an Ahmedabad-based firm called ‘Pop Chips’. Singh told the farmers that the company was setting up a new unit to manufacture potato wafers. He offered to buy their potatoes at Rs 260 for 20 kilograms, much higher than the market price. The farmers claim that they did not consider the offer. They claim that Singh returned twice after that with a larger team to make the same offer and also recorded videos.

“Perhaps during these visits they collected samples. But it is not in our knowledge. We don’t know what samples they eventually gave to the laboratory,” one farmer told The Wire. 

It was only on April 11 when the court notice was served to the farmers, that they suspected that Singh and Pop chips might actually have been Pepsi all along.

“We did suspect that something is wrong otherwise who will come like this and offer more than market price? But only on April 11 we found out that these people were actually sent by Pepsi,” the farmer alleged.

Also read: Will Anger Over Low Potato Prices Harm BJP in UP?

When The Wire asked a spokesperson of PepsiCo whether a detective agency was hired, the company refused to confirm or deny the allegation.

On how the potatoes were procured from the farmers, the PepsiCo spokesperson said:

“PepsiCo India has proposed to amicably settle with people who were unlawfully using seeds of its registered variety. PepsiCo has also proposed that they may become part of its collaborative potato farming program. This program 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. It is significant to note that the company’s collaborative potato farming program is best in class and is built on strong backward and forward linkages that improve livelihoods by using protected seeds.

The company was compelled to take the judicial recourse as a last resort to safeguard the larger interest of thousands of farmers that are engaged with its collaborative potato farming program. PepsiCo India remains deeply committed to resolving the matter and ensuring adoption of best farming practices.”

PepsiCo’s application in court only mentions that ‘samples’ were ‘collected in the presence of the farmers’ and sent to a government established laboratory in Shimla for verification.

Meanwhile, the court has set the next hearing for June 12. Farmers will have to respond to the allegations made against them by PepsiCo. Till then, an interim injunction that the court had earlier passed against the growing and selling of that variety of potatoes by the farmers will remain in place.

The counsel for the farmers, Anand Yagnik, has said that they will fight the matter in court. “There is no legal basis for this case. Under section 39 of the PPVF act, farmers have a right to grow any variety of any crop. We will fight it in court,” he said.

Activists and farmers’ organisations have come out in support of the farmers and even called for the boycott of Pepsi. On April 24, 194 activists and farm leaders wrote to Protection of Plant Varieties and Farmers’ Rights Authority asking it to write to PepsiCo to urge it to withdraw the case. “We believe that the intimidation and legal harassment of farmers is happening because farmers are not fully aware of the rights contained in this statute.”

The Communist Party of India (Marxist)-affiliate All India Kisan Sabha also issued a statement in support of farmers and called for the boycott of ‘Lays and potato product of Pepsi’.

“AIKS demands urgent intervention of Central Government to protect the interests of potato farmers in Gujarath who were unethically implicated in cases by the Multi National Company PepsiCo.”