What is this potato that PepsiCo is obsessing over in India?

Ownership Battle.
Ownership Battle.
Image: Reuters/Philippe Wojazer
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A variety of potatoes developed by PepsiCo India to ring-fence itself against supply disruption has triggered a patent-infringement battle in the country.

The snacks and beverages major’s recent decision to sue a handful of farmers in the western state of Gujarat for cultivating its registered variety of the vegetable has put the spotlight on the country’s contentious intellectual property right (IPR) laws. It has sought Rs1.05 crore ($150,000) each from four farmers for cultivating the FL 2027 potato variety, commonly known as FC5, grown exclusively for PepsiCo’s Lay’s chips.

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, 2001 (PPV&FR).

Genesis of FC5

PepsiCo has been developing and registering a variety of potatoes in India since the production of Lay’s took a hit in 2008. The overall supply of potatoes was hit that year due to crop failure in the states of Maharashtra, Karnataka, and Punjab.

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.

The FC5 was put to commercial use in 2009 and PepsiCo India has granted licence to some farmers in Punjab to grow FC5 on the buyback system, wherein the company buys all the produce from farmers at pre-decided prices. The variety is considered superior because of its lower water content (80%, compared with 85% for other varieties), making it more suitable for processing.

Potato and IPR in India

Potato is one of the 151 crop species open for registration in India under the PPV&FR Act. As of February, up to 25 varieties have been granted IPR to various companies in India. This confers exclusive rights on the breeder to produce, sell, market, distribute, import, or export them.

So far, no variety of potato developed by farmers has been registered.

This recent alleged patent infringement case has triggered a backlash from farmers and political parties alike. PepsiCo India offered an out-of-court settlement during a hearing on April 26. But the offer comes with a rider. The company wants farmers to commit that they would not use the patented variety of potato seeds in the future.

The matter will come up for hearing again on June 12.