Pepsi’s lawsuit over farmers planting potatoes used in Lays chips dropped, but implications linger

A customer picks packets of Lay's potato chips at a shop in Ahmedabad, India, April 26, 2019. REUTERS/Amit Dave/File Photo

A dispute between small, local farmers in India and a corporate giant over a patent on the type of potatoes used in Lay’s potato chips ended this week, when the company backed off amid political pressure.

PepsiCo Inc., which owns Lay’s, withdrew their lawsuits against the Indian farmers after discussions with the government.

Pepsi officials say they created the FC5 variety, which has a reduced moisture content making it better to better make potato chips with.

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They have sold their seeds to local farmers, who, in turn, sell the potatoes to the company.

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Officials had initially said the four farmers were infringing on a patent on the FC5 variety of potatoes — saying they would drop the lawsuit if farmers chose to sell their crops to Pepsi, or stop growing them.

But after political pressure — which came halfway through a general election in India — the company dropped the suits.

Ashwani Mahajan, who heads the Swadeshi Jagran Manch (SJM), the economic wing of Rashtriya Swayamsevak Sangh (RSS) which is the ideological parent of Modi’s BJP, welcomed PepsiCo’s move as a moral victory for Indian farmers.

“MNCs (multi-national corporations) need to understand that they must honor Indian laws,” Mahajan said.

While this case takes place halfway around the world, there are implications for Canadian farmers and farmers around the world.

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While genetically modified plants are not patentable, the genetic constructs used to make them are, Sana Halwani, a Toronto-based intellectual property litigator, explained to Global News.

But in Canada, a new form of plant is protected by the Plant Breeder’s Right. According to the government, a plant breeder’s rights “are a form of intellectual property rights by which plant breeders can protect their new varieties in the same way an inventor protects a new invention with a patent.”

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Canada is part of the International Treaty on Plant Genetic Resources for Food and Agriculture, or the International Seed Treaty, which says farmer’s rights include the protection of traditional knowledge relevant to plant genetic resources.

“One of the articles in that treaty is that no country will pass laws that will restrict farmers rights to save seed, exchange seeds, sell seed and like use it on their own,” Aabir Dey, the director of the The Bauta Family Initiative on Canadian Seed Security at USC Canada, told Global News.

USC Canada works with farmers in countries around the world to build ecological, sustainable agriculture.

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“It’s in the spirit of recognizing that most of the seeds that we use in modern agriculture today trace their lineage back to farmers and Indigenous communities.”

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But Seeds cost a lot to engineer, and it’s totally within the companies’ rights to want to re-coup that cost, he explained.

“There’s an inherent contradiction there that private companies and plant breeders are able to apply for intellectual property rights on their seeds and restrict farmer’s abilities to save those seeds.”

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