RSTV-Pepsico Vs Potato Farmers(Big Picture)

  1. PepsiCo has been developing and registering a variety of potatoes in India since the production of Lay’s took a hit in 2008.A variety of potatoes(FC5) developed by FMCG giant Pepsico’s India division has triggered a patent-infringement battle in the country. 
    The snacks and beverages major has sued a few farmers in Gujarat for growing potatoes which the company uses to make its Lay’s chips. The MNC has sought Rs 1 crore each from four farmers for cultivating the FC5 potato variety.
  2. In an Ahmedabad commercial court, the company claimed it is the registered breeder of FC5 under India’s Protection of Plant Varieties and Farmers’ Rights Act.
  3. The company currently works with 24,000 farmers across the country in states like West Bengal, Maharashtra, Punjab, Gujarat, Uttar Pradesh, Karnataka, Bihar, Haryana, and Chhattisgarh.
  4. This dispute is a normal phenomenon in the Indian scenario when farmers use the seeds from the previous crops. 
    In this case, a particular group of farmers who have joined the supplier group of PepsiCo, are defined and are using a particular seed. 
  5. This particular case is said to be a little harsh on the farmers because unknowingly, they have ignored a kind of law (although the ignorance of law is not something which is wise in any society), however, in India, we know very well that farmers are poor. They are ill-informed. They are not properly trained. They are not educated. This is a common phenomenon in India.
  6. A solution can be companies can take an initiative towards educating the farmers.  
  7. Cause of Dispute-In this particular case, when we look at a food processing company like PepsiCo, they started their business with tomatoes in Hoshiarpur, Punjab. They gave farmers the best technology back then. The company also gave them an assured price. The farmers thought that they would benefit from it, and soon subscribed to their model. There was some kind of contract farming arrangement. However, once it was seen that when the market prices were good, the farmers did not honour the contract and they did not sell it to the company at the assured price. They were instead trying to sell the same in the market. In the next year when the market prices were low, the companies said, that they would buy the produce from the market- and thus, from both the sides, there was a dishonouring of the contract which was being done
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