Farmers’ rights and Pepsico’s hot potato – The Hindu BusinessLine

lipped from: https://www.thehindubusinessline.com/opinion/columns/r-srinivasan/farmers-rights-and-pepsicos-hot-potato/article37901972.ece?homepage=true

India’s plant variety protection law is progressive and pro-innovation. But variance in State laws must be addressed

The revocation of registration granted to the global food giant Pepsico by the Protection of Plant Varieties and Farmers Rights’ Authority (PPV&FRA), the regulatory body whose remit covers “the establishment of an effective system for protection of plant varieties, the rights of farmers and plant breeders and to encourage the development of new varieties of plants”, further muddies an already unclear picture for the seed and bio-technology innovation sector in India.

Unfortunately, the reality is somewhat more complicated than one-sentence media headlines. The reality is that India is the world’s fifth largest market for seeds, plant varieties and vegetatively propagated varieties (potato is one such since the tuber itself is the “seed”). The market size is estimated at $3 billion a year, although the volume is significant, since India is largely a low-value seeds market. The seed sector is also a large one, with more than 540 registered seed companies operating in India, according to the Department of Agriculture, Cooperation and Farmers Welfare.

However, as one industry veteran pointed out, it is an animal with a “small head and a long tail”. Of the 540 companies, only a handful are operating at significant size and just 80 of them have some sort of R&D programme of their own, meaning they are trying to create their own intellectual property. Most actually multiply seeds obtained from government research labs and agricultural universities. Over and above the known entities, there are also innumerable fly-by-night operators, who operate with stock often obtained illegally.

A recap of the issue

First, a quick recap of the Pepsico case. The FL-2027 variety of potatoes (FL stands for Frito Lays, the name of Pepsico’s food arm, and owner of the famous ‘Lays’ brand of potato chips) was introduced by Pepsi in 2009 through a contract farming arrangement with some 12,000 farmers, to whom the company supplied the seeds and bought back the produce. The FL-2027 variety was registered under India’s PPV&FR Act, some five years ago. In 2019, Pepsico sued some nine farmers for infringement of its rights under the Act, and claimed ₹1 crore in damages from them, including some small farmers.

This led to a widespread backlash, with farmers threatening a boycott. In an election year, and that too in Prime Minister Narendra Modi’s home state of Gujarat, this would have been seen as a huge setback. Pepsico was “persuaded” to withdraw all the suits.

However, an activist, Kavitha Kuruganti, convenor of the Alliance for Sustainable and Holistic Agriculture, moved the regulator to revoke the food giant’s registration on the grounds that the registration infringed on the rights granted to farmers under Indian law to produce, save and even sell seeds, provided it was unbranded.

After the revocation order, Kuruganti claimed a victory for farmers’ rights, tweeting, the order “should also prevent any other seed or food company from transgressing legally granted farmers’ seed freedoms in India.”

However, that may be overstating the case. For starters, the revocation order appears to have been based more on technicalities and procedural lapses than any fundamental transgression of farmer rights. Also, the question of what exactly the “rights” granted under the PPVFRA are. Is it the equivalent of a patent — as some have implied, is it a right to produce a variety or is it a right over production from a variety?

Since Pepsi withdrew its cases, this has not been tested in a court of law yet, but undoubtedly will be given that actual protection of even the limited rights granted under Indian law is practically impossible under field conditions, and other rights infringement disputes are bound to spring up. There is also rampant theft and illegal propagation.

One might be forgiven for thinking that in this kind of lawless ‘Wild West’ scenario, organised players and multinationals will be significant by their absence but the reality is otherwise. The private sector now accounts for 65 per cent of seed production in India and is an essential part of the agri-innovation chain in India. While the heavy lifting, particularly in key food crops, continues to be done by public sector and university labs, without the private seed players to multiply and propagate the new varieties, it would be impossible for even government research to reach the farmers, since the old agriculture extension system, which transformed agricultural practices during the Green Revolution, has all but collapsed.

Weak IP protection

The lack of protection for intellectual property, and a complicated and slow process for registration of new varieties has also not helped. The PPVFR Authority’s demand for parental lines (to do its own testing) has also deterred many foreign players from introducing the latest varieties. This is understandable since many Indian seed companies actually owe their existence to germ plasm or parent lines that went “missing” from the test fields of the serious investors in innovation.

We also need to ensure that the farmer has a stake in innovation by ensuring better realisations for adopting innovative varieties. For this, we need much more investment in farm infrastructure, including processing and pre-processing plants, as well as “identity protected” supply chains. There would be no gain for the farmer in investing in costlier seeds of soyabean with higher oil content, for instance, if the crop ends up getting mixed up with regular varieties and sold as a job lot in a mandi. This is equally valid for the increasingly lucrative organic produce segment, where lack of identity protected supply chains leads to rampant mixing at the consumer end.

India’s plant variety protection law is not broken. Nor is it anti-innovation, as a superficial reading of the Pepsi potato case may suggest. It does allow for innovation, while being very progressive in protecting farmer rights. But rights come with responsibilities and these need detailing — for both seed producers and farmers.

Confusing interpretation of IP rights in multiple laws, as well as widespread variance in State-level laws and regulations — agriculture is still a State subject — also need to be addressed, if the government’s twin ambitions of doubling farmers’ incomes and making India a $5-trillion economy by 2025 is to become reality.

Otherwise, the Pepsi potato can well become a political hot potato setting back agri innovation in India.

The writer is a senior journalist

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