As we had reported earlier on the blog (click here), the Registry for Geographical Indications (G.I.), has ordered the Agricultural and Processed Foods Export Development Authority (APEDA) to amend its application for the protection of ‘Basmati’ as G.I. to include certain areas from Madhya Pradesh as growing ‘Basmati’ rice.
For a variety of rice which has historically been advertised as growing at the foothills of the Himalayas, the inclusion of areas of Madhya Pradesh, located in Central India, at a distance of approximately 1,141 kilometres from the Himalayas is going to provide an interesting twist to the story.
The decision of the G.I. Registry is surprising to the extent that it actually ruled against APEDA something which I never thought was possible because both APEDA and the GI Registry function under the Ministry of Commerce. It is good to see the G.I. Registry function independently for once.
The disappointing part of the order is the lack of a proper appreciation of evidence filed by both sides. Thanks to the efforts of the Controller General Chaitanya Prasad to increase transparency, all the documents at the G.I. Registry are now available online. If you key in the no. 145 on the G.I. Registry website, a huge list of documents is displayed on the screen. Most of the documents are evidence filed during the opposition proceedings. Unfortunately, the final order does not analyse this evidence in adequate detail.
Before examining the order on merits, it may help to explain the backdrop of this order.
A. The Backstory: In the last two decades, one of the biggest foreign threats to the Basmati name has been the U.S., where the Federal Trade Commission (FTC) denied a petition to stop the use of the ‘Basmati’ name for rice grown in the U.S. The reason being that American rice farmers were selling their rice under brand-names such as Texmati, Kasmati – ‘basmati’ type rice. As a result the FTC was of the opinion that Basmati had become a generic term for any long grain aromatic rice.
Thankfully, the E.U. was kinder to the Basmati rice industry by putting in place a system of preferential tariffs for those varieties that it considered to be genuine ‘Basmati’ rice. Rice varieties which didn’t meet this criterion were subject to punishing tariffs. The people who suffered the most from this policy, were American rice farmers who were trying to pitch their rice in the U.S. as basmati type rice.
The greatest domestic danger to Basmati rice has been the Indian scientific community, which has needlessly invested resources in developing high-yielding hybrid varieties of ‘Basmati’ rice, a premium brand meant for kings and whose value in the international market depends on the scarcity, not abundance, of supply. For the longest time, ‘Basmati’ has been a premium brand in the international markets, not only because of its properties, such as its aroma, and the unique length of its grains but also because it has been in a natural short supply as a result of the limited locations in which it was grown. A natural result of a shortage is that the product in question becomes expensive and as a result exclusive. Diamonds would not be diamonds if they were growing on trees.
However with the development of these high yielding hybrid varieties, like Pusa Basmati, not only does the supply of basmati grow from existing areas of cultivation but from I understand, some of these hybrid varieties also grow in the non-traditional areas. Apparently, according to this news report, scientists at the government research body – Indian Council for Agricultural Research (ICAR) are trying to grow a new hybrid variety of basmati in Goa! This isn’t surprising because a few years ago, the media reported that Pusa was now growing in Andhra Pradesh, a state on the Deccan plateau.
If the aim of Indian scientists is to make sure basmati can be grown in every corner of the country from Kanyakumari to Tripura, how in the good God’s name is ‘basmati’ going to be an exclusive brand?
What possessed Indian scientists to come out with hybrid varieties for an essentially luxury food product. Do the rich really need cheaper ‘Basmati’ rice or is national interest better served by maintaining a scarcity of ‘Basmati’ in the international market? There is evidence that Basmati prices have been falling because of the increasing supply.
India has thousands of varieties of fascinating rice – the aim should be to create markets for each varieties of rice instead of squeezing the life out of Basmati, a brand which has been carefully cultivated by farmers and millers who bred and marketed the original varieties. The increasing supply of basmati due to hybrids has predictably led to a fall in the prices, as evidenced by this news report.
The other problem with hybrid varieties is that these tend to dilute the properties of the original varieties since the original parental lines are being cross-bred for the purpose of increasing the output rather than refining any particular quality. As nature often reminds us, a balance always has to be maintained. Increase output, compromise on quality. This has often meant that hybrid varieties of ‘Basmati’ sell at a lower price than traditional varieties.
In the case of Basmati, the hybrid varieties created by Indian scientists, such as Pusa, ran into significant trouble since the E.U. and the British initially refused to recognize hybrid varieties as genuine Basmati rice. A lot of politics later, the E.U. started recognising the Pusa variety as ‘Basmati’ rice for the purpose of tariff derogation.
B. The Registry’s order dated December 31, 2013: The two main issues raised before the G.I. Registry during the course of the Opposition filed by rice companies from Madhya Pradesh against APEDA’s application were as follows:
(i) Does APEDA have the right to apply for the G.I. protection of ‘Basmati’?
The opponents in this case which included the State of Madhya Pradesh, a basmati rice growers association and a couple of rice companies, had opposed the right of APEDA to apply for the registration of ‘Basmati’ on the grounds that APEDA was representing only exporters of ‘basmati’ and not producers of ‘basmati’ as was required under the G.I. Act.
The issue of APEDA seeking to claim the G.I. registration of ‘basmati’ is an issue which I have raised on the blog several times. Sometime ago, I had written two posts over here and here describing the nationalisation of G.I.s in India where Government bodies like APEDA have applied for the registration of G.I.s which owe their reputation and value to the work of local communities.
Going by the wording, scheme and intent of the G.I. Act it is only logical to conclude that communities responsible for building the reputation, and not the State should own G.I.s. In the case of ‘basmati’, the ownership of the G.I. should have been with the farming communities which have grown basmati rather than APEDA, which is a body setup by Parliament and which is under the control of everybody but farmers.
The opposition plea in the case didn’t quite exploit this argument far enough because of the fact that some of the opponents themselves appeared to be companies involved in the processing rather than growing of ‘basmati’.
In any case, the G.I. Registry predictably shot down this argument with legal reasoning which is very, very weak. Any other conclusion would have been an admission by the Registry that more than 50% of the granted G.I.s are invalid. In its order the Registry concluded that since the APEDA was created under a law with a mandate to promote the development of agricultural products, it fulfilled the Section 11 criteria.
In pertinent part, Section 11 states that “Any association of persons or producers or any organization or authority established by or under any law for the time being in force representing the interest of the producers of the concerned goods……”.
The operative part of the above definition is the phrase “representing the interest of the producers” and the word “producer” of agricultural goods is defined in the G.I. Act as follows: “producer”, in relation to goods, means any person who “if such goods are agricultural goods, produces the goods and includes the person who processes or packages such goods;”.
On how APEDA meets this definition is beyond my understanding because APEDA is effectively in control of Parliamentarians and bureaucrats who have little to do with the production of ‘basmati’. The entire list of people who control APEDA can be read from its legislation which is available over here.
(ii) Was there a case for the regions from the State of Madhya Pradesh to be included in APEDA’s application to grow ‘Basmati’?
The second and perhaps the more important issue was whether or not the rice being grown in the State of Madhya Pradesh (M.P) qualified as ‘basmati’ rice.
In order to qualify for a G.I. tag, it has to be shown that a product has developed a reputation for properties which are a result of its geographical location. Usually in the case of agricultural products, it is the soil and weather of a place that most influences the taste or the flavour of the product. In the case of basmati, the two stand out features are that it is long grained and with a wonderful aroma.
In its application, which can be accessed over here, APEDA has defined Basmati rice with certain very precise properties such as length of the rice and aroma and growing in a well-defined region of the Indo-Gangetic region. In listing the factors attributing to the uniqueness of ‘basmati’ as defined by the APEDA, the top factors are weather & soil found in the Indo-Gangetic plain. Other reasons are irrigation techniques, production techniques and quality control procedures administered by APEDA.
In their opposition petition, the rice companies from M.P. argued that the regions in M.P. had similar soil and climate, since these regions too were located on Indo-Gangetic plain. These companies submitted expert evidence to support their claims, along with expert DNA evidence certifying rice from Madhya Pradesh as ‘basmati’ rice. Additional documentary evidence was provided in the form of publications which referred to the rice grown within M.P. as ‘basmati’.
In his decision, the Registrar appears to have been influenced significantly by the documentary evidence submitted by the opponents from M.P. In giving so much weight to the documentary evidence the Controller hardly examines the remaining evidence on characteristics of the claimed rice and also the climate and soil reports.
Even the documentary evidence submitted by the opponents appears to be quite weak since it refers to isolated scientific journals, which can hardly be used to establish the ‘reputation’ of a product and mind you, ‘reputation’ is one of the key requirements for securing a G.I.
What is more surprising about the order is that it is silent on the variety of ‘Basmati’ claimed to have been grown in M.P. As of now India has officially notified several varieties of basmati under the Seeds Act, 1966: Basmati 386 , Basmati 217 , Ranbir Basmati , Karnal Local/ Taraori Basmati, Basmati 370, Type-3 (Dehradooni Basmati), Pusa Basmati-1, Pusa Basmati 1121, Punjab Basmati-1, Haryana Basmati- 1, Kasturi and Mahi Sugandha. From some of the evidence filed by the farmers from M.P, the Pusa variety, which is a hybrid, appears to be the mainstay in M.P.
While the variety of basmati grown is certainly not the only basis for granting a G.I., it should have been one of the most important factors in the Registrar’s analysis. The order is surprising silent on this issue.
Conclusion: Given the thousands of crores of rupees riding on the definition of ‘basmati’, this order of the Registrar is most certainly going to be appealed to the IPAB. Given that the Registry’s order hardly analyses any of the evidence, it is very likely that the case will be remanded to the Registry for a second shot at the evidence.
If the IPAB upholds the order, rice farmers from M.P. can officially claim to be ‘basmati’ farmers. The battle then shifts to G.I. registration of ‘basmati’ in the E.U.