PepsiCo offers out-of-court settlement to sued Gujarat potato farmers

The legal tussle between four potato farmers in Gujarat and global food and beverages giant PepsiCo India Holdings Pvt Ltd (PIH) MAY be headed for an out-of-court settlement. 

Alleging Intellectual Property Rights (IPR) infringement, PepsiCo India had sued the farmers from Sabarkantha district for buying seeds and selling potato of the FL 2027 variety, also known as FC-5, which the former has registered under the Protection of Plant Varieties and Farmers’ Rights (PPV&FR) Act, 2001. The variety is used for PepsiCo's chips product Lay's. 

However, on Friday, during a hearing at the commercial court in Ahmedabad, the legal counsel representing PepsiCo suggested a possibility of out-of-court settlement. The counsel told judge M C Tyagi that PepsiCo could withdraw the case if the farmers were willing to sign an agreement for buying the registered variety of FC-5 potato seeds and selling the produce to the company only. 

It has been suggested that the farmers could give an undertaking that they would never buy and sow the said 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 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," a company spokesperson said.

"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,” the spokesperson added.

The out-of-court settlement would eventually depend on the willingness of the four farmers to accept the same or not. In the meantime, the legal counsel representing the farmer sought time till June 12 for filing written submissions based on the allegations made by PepsiCo. PepsiCo's legal counsel too 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 the 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 that 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 resulting in 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 central and state government seeking intervention in support of farmers and protection of their rights. 

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