Tuesday 20 August 2019

Pepsi to withdraw lawsuits against Indian potato farmers

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

Mayank Bhardwaj

PepsiCo Inc will withdraw its lawsuits against a number of Indian potato farmers accused of infringing its patent, the company said on Thursday.

After suing four farmers for cultivating the FC5 potato variety grown exclusively for PepsiCo's popular Lay's potato chips, the snack food and drinks maker had said it wanted to settle the issue amicably.

In addition to filing the lawsuit against the four farmers in April, PepsiCo had sued five other potato growers.

"After discussions with the government, the company has agreed to withdraw the cases against the farmers," a PepsiCo India spokesman said, adding that this applied to all nine.

The company did not disclose details of its consultations with the government.

The New York-based company had previously said the farmers must either sell their potatoes to PepsiCo or stop cultivating the FC5 variety. In return, PepsiCo would withdraw the suit filed against the farmers.

The decision comes after an influential Hindu nationalist group with close ties to Prime Minister Narendra Modi's ruling Bharatiya Janata Party (BJP) accused PepsiCo of coercing the farmers.

PepsiCo's dispute with the farmers came at a particularly sensitive time in India, which is about halfway through a 39-day general election in which its rural population still has a dominant voice. Modi and the BJP are seeking a second term and most political strategists think they are likely to succeed.

The company maintains that it developed the FC5 variety of potato, which has a reduced moisture content to make snacks such as potato chips, and registered the trait in 2016.

The April lawsuit was filed in Ahmedabad, the business hub of the western state of Gujarat, requesting that the court restrain the four farmers from growing the FC5 variety. The company had also sought more than 10 million rupees ($142,840) each from the farmers.

The state government of Gujarat, ruled by Modi's BJP, had assured the farmers that it would help them while the opposition Congress party had also criticised PepsiCo for suing .

PepsiCo, which set up its first potato chips plant in India in 1989, supplies the FC5 potato variety to a group of farmers who in turn sell their produce to the company at a fixed price.

"The company remains deeply committed to the thousands of farmers we work with across the country and towards ensuring adoption of best farming practices," the PepsiCo spokesman said.

PepsiCo is keen "to find a long term and amicable resolution" of the issues involving seed protection, he said.

Reuters

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