PepsiCo sues small farmers in India over potatoes for Lays chips

April 26, 2019

PepsiCo, which counts potato chip brand Lays among its many products, says it’s hoping to reach an agreement with four farmers in India for growing a type of potato the food conglomerate claims to own the rights to.

The U.S. company’s India subsidiary filed lawsuits against the farmers earlier this month, with a court in the Indian state of Gujaret holding a hearing on the matter Friday, according to published reports. PepsiCo, with nearly $65 billion in global food and beverage revenue last year, reportedly sought 10 million rupees, or $143,000, from each farmer, who operate farms of a few acres each.

“The company was compelled to take the judicial recourse as a last resort to safeguard the larger interest of thousands of farmers that are engaged with its collaborative potato farming program,” a company spokesperson emailed CBS MoneyWatch.

That said, PepsiCo is offering to drop the case so long as the farmers agreed to join its authorized cultivation program.

“PepsiCo India has proposed to amicably settle with people who were unlawfully using seeds of its registered variety. PepsiCo has also proposed that they may become part of its collaborative potato farming program,” the company spokesperson stated.

If the farmers don’t want to sign on to PepsiCo’s program, they can sign an agreement and grow other types of potatoes, the PepsiCo spokesperson added.

A lawyer for the farmers said they needed time to consider PepsiCo’s offer, with another hearing scheduled for June 12.

Farmers’ groups and activists in India had urged their government to intervene, saying their rights to grow and sell registered crops are protected under the country’s agricultural laws.

In a letter to the India’s Ministry of Agriculture, 194 activists called the lawsuit from the food and beverage giant “false and untenable,” according to India Today. “We believe that the intimidation and legal harassment of farmers is happening because farmers are not fully aware of (their) rights,” they wrote.