PepsiCo offers out-of-court settlement to potato farmers

Firm had sued them for buying seeds and selling a potato variety used for making Lays chips, It has been suggested that the farmers give an undertaking that they would never buy and sow the registered variety of FC-5 potato seeds in future.

A legal tussle between four potato farmers in Gujarat and PepsiCo India Holdings - where the latter had sued the farmers for buying seeds and selling potato of the FL 2027 variety used by PepsiCo to make Lays chips - is headed for an out-of-court settlement.

PepsiCo India alleged Intellectual Property Rights (IPR) infringement and sued the farmers from Sabarkantha district.

The FL 2027 potato variety, also known as FC-5, has been registered by PepsiCo under the Protection of Plant Varieties and Farmers’ Rights (PPV&FR) Act, 2001.

During a hearing at the commercial court in Ahmedabad on Friday, the legal counsel representing PepsiCo suggested a possibility of out-of-court settlement.

The counsel told Judge MC Tyagi that PepsiCo could withdraw the case if the farmers are willing to sign an agreement for buying the registered variety of FC-5 potato seeds and sell the produce to the company only.

It has been suggested that the farmers give an undertaking that they would never buy and sow the registered variety of FC-5 potato seeds in future.

PepsiCo is learnt to have engaged 1,200 farmers in Gujarat for sowing and producing the FC-5 variety of potato for its snacks division.

"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 programme.

"This programme 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 programme, 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 programme is best in class and is built on strong backward and forward linkages that improve livelihoods by using protected seeds," a company spokesperson said.

The out-of-court settlement would eventually depend on the willingness of the four farmers to accept the offer. Meanwhile, the legal counsel representing the farmers sought time till June 12 for filing written submissions based on the allegations made by PepsiCo.

PepsiCo’s legal counsel also sought time till June 12 for filing rejoinders to the farmers’ submissions.

In the interim, the court’s previous order of a stay on the farmers from growing and selling the potatoes continues till the next hearing on June 12.

Earlier, PepsiCo had stated that it took judicial recourse against people who were “illegally dealing in our registered variety.”

“This was done to protect our rights and safeguard the larger interest of farmers who are engaged with us and who are using and benefitting from seeds of our registered variety.

"We remain committed to resolving the matter and ensuring adoption of best farming practices for higher yield and quality,” a PepsiCo India spokesperson had said.

The case had gathered steam recently when nearly 200 farmers leaders, activists and civil society representatives had written to the central and state governments seeking intervention in support of the farmers and protection of their rights.

The letter maintained that the farmers had not infringed upon any IPR rights of PepsiCo as Section 39(1) of the PPV&FR Act, 2001, entitled farmers in India to buy and sow seeds of any variety registered under the Act.

Photograph: Amit Dave/Reuters