We’re pleased to bring to you Part II of the fifth post in the ongoing series of posts by Prof. (Dr.) N.S. Gopalakrishnan on problems with India’s plant varieties’ regime. Part I of the post can be viewed here and all the earlier posts in the series, here.
Problems with the Indian Plant Varieties Regime (V):
Farmers’ Rights – A Myth or Reality (II)?
Prof. (Dr.) N.S. Gopalakrishnan
Concept of benefit sharing
The origin and development of the concept of benefit sharing is closely associated with the problem of biopiracy. It is an accepted fact that genetic resources and associated traditional knowledge has been used for the development of new products using modern technology, particularly biotechnology. The modern researchers and industries use these resources and associated knowledge without recognizing or rewarding the communities who are the custodians of these resources and associated knowledge. One of the reasons for this was the traditional approach of considering these resources as the common heritage of human kind. Similarly, modern IP has also treated publicly accessible traditional knowledge as part of the public domain, facilitating free raid. For the first time, the international community reversed this position through the Convention on Biological Diversity (CBD), 1992 that declared sovereign rights over natural resources and mandated prior informed consent and mutually agreed terms before access to genetic resources and associated traditional knowledge. CBD also mandates benefit sharing for the custodians of the knowledge associated with genetic resources. Article 8(j) of CBD specifically states that the use of traditional knowledge associated with genetic resources must be “—- with the approval and involvement of the holders of such knowledge, innovations and practices and encourage the equitable sharing of the benefits arising from the utilization of such knowledge, innovations and practices”. This was further clarified in the Nagoya Protocol (2010), Article 5(4) of which envisages both monetary and non-monetary elements as part of benefit sharing. It was also clarified that the State must ensure active participation of the custodians of these resources and associated knowledge in deciding access and determining benefit sharing.
Regarding the plant genetic materials, after the conclusion of CBD, the Food & Agriculture Organisation took the initiative to conclude the International Treaty on Plant Genetic Resources for Food and Agriculture (ITPGRFA), 2001. ITPGRFA created a multilateral system (MLS) of PGR for facilitating modern plant breeding activities to promote agriculture and ensure food security. It also envisages the recognition of farmers’ rights and provide for benefit sharing. It is pertinent to note that the Preamble of ITPGRFA affirmed “that the past, present and future contributions of farmers in all regions of the world, particularly those in centres of origin and diversity, in conserving, improving and making available these resources, is the basis of Farmers’ Rights”. Article 9 of the Treaty, dealing with Farmers’ Rights, specifically mandates adoption of measures to protect traditional knowledge associated with PGR and promote the right to equitably participate in sharing the benefit arising from its utilization. It is in this context that one has to examine how the Protection of the Plant Varieties and Farmers’ Rights Act, 2001 (‘PV Act’) has conceptualized and included the benefit sharing provisions for the advantage of the farming communities.
Benefit sharing to the farming communities under the PV Act
The PV Act envisages three types of benefit sharing to the farming communities. These include (a) benefit sharing from the registered variety (section 26); (b) compensation to the village or local communities for the conservation of the genetic materials used for breeding new variety (section 41) and (c) recognition and award for conservation of traditional varieties useful for breeding new varieties (section 39(1)(iii)). At the outset, it is important to note that under the PV Act only monetary benefits are envisaged as part of benefit sharing. It is also clarified that benefit sharing under section 26 and compensation under section 41 is for the conservation of the genetic materials used for breeding of the registered varieties. But the ‘reward and recognition’ is for general conservation of genetic materials useful for breeding new varieties. The way in which these provisions are implemented by the Authority is examined below.
Benefit sharing under Section 26
According to section 26, once the registration certificate is issued, the Authority shall publish the contents of the same and invite claims of benefit sharing. Rule 40 makes it clear that the Authority shall advertise the contents of the certificate including (a) name of the family, genus, species, variety and common name, (b) parentage and geographical location of the variety, (c) the details of the distinguishing features or the characteristics and (d) the name and address of the contributor, nature and amount of the contribution or the community knowledge used in the development of the plant variety. The claim of benefit sharing is for the “extent and nature of use of genetic materials of the claimant in the development of the variety”.
It is to be noted that the definition of variety includes not only new varieties but also extant and farmers’ varieties. Similarly, the definition of breeder also includes formal and informal breeders. No clarification is provided in the Act as to whether the obligation of benefit sharing under section 26 is confined only to new varieties and essentially derived varieties or applicable to extant and farmers’ varieties as well. A literal interpretation of the provision gives the impression that the obligation is upon all breeders who have registered any variety under the Act. Since the objective of benefit sharing is to ensure economic return to the traditional farming communities for using their traditional varieties for breeding new varieties protected by IP rights, it is assumed that the intention of the Parliament is to confine the obligation of benefit sharing to breeders of new and essentially derived varieties.
It is also surprising to note that according to section 26, the claim can be filed by “any person or group of persons or firm or governmental or nongovernmental organization”. This gives the impression that in addition to the farmer, group of farmers and community of farmers, other persons and organizations (modern breeders) are also entitled to file claims of benefit sharing. But if one examines the origin and development of benefit sharing, it is clear that it must be confined only to the farming communities. In this context, it is unfortunate to note that the Delhi High Court in Nuziveedu Seeds Ltd., v. Monsanto Technology LLC (2018), without examining the details of section 26, made a passing observation that Monsanto could claim benefits under this provision, which triggered considerable debate.
On receipt of the application for benefit sharing, the Authority is expected to inform the breeder and give him the opportunity to submit opposition if any, hear the parties and decide the amount to be deposited in the Gene Fund. It is the Authority who has the power to make the payment to the claimant once the amount is deposited based on the provisions dealing with use of the Gene Fund. In case of failure of the breeder to deposit the amount, it is again the Authority who has to initiate the revenue recovery proceedings before the District Magistrate where the breeder resides. It is pertinent to note that there is no direct payment by the breeder to the claimant. One is worried about the practical difficulties that the poor farming community has to undergo in order to enjoy the benefit of this provision. The entire procedure is unlikely to work for the following reasons. Firstly, the Act expects the poor farmer to keep track of the registration of new varieties and the notification for benefit sharing in the official journal of the Authority in order to make a claim, that too within six months. It is extremely difficult for him to get access to these notifications. It may also be difficult for the farmer to find out whether the genetic material used by the modern breeder is from his traditional variety, unless assisted by a modern breeder. Secondly, it is difficult for the farmers, who are invariably from villages, to appear before the Authority located in Delhi with limited branches (Ranchi, Guwahati, Shivamogga, Pune and Palampur) and establish their claim in case it was contested by the breeder. Thirdly, the farmers have a very limited incentive to file claims since the amount determined by the Authority is not directly paid to them but deposited in the Gene Fund. There is also no guarantee that the Authority will take timely action to recover the amount if the breeder fails to deposit the amount to the Gene Fund. Even if the amount is deposited in the Gene Fund, the farmer has to follow a set of procedures to claim it.
In this context, it is pertinent to note that as per section 18(1)(e), for registration of a new variety, it is mandatory for the applicant to disclose in the application the “complete passport data of the parental lines from which the variety has been derived along with the geographical location in India from where the genetic material has been taken and all such information relating to the contribution, if any, of any farmer, village community, institution or organization in breeding, evolving or developing the variety”(emphasis mine). If all these details are made available to the Authority by the applicant, it is difficult to comprehend the reasons for the Parliament to not provide for a suo moto action by the Authority to determine the benefit sharing and make direct payment to the farmer or village community after ascertaining their entitlements. Since the Act also envisages the registration of farmers’ variety, it is also possible for the Authority to cross check and confirm the beneficiaries without any further procedure. This would have made it easier for the farming communities to enjoy the benefits.
It is unfortunate to note that the Authority diluted this mandatory disclosure in Form 1 and limited the disclosure to the parental line of the traditional variety if it is repeatedly used in propagation of hybrid. It is also pertinent to note that in Form 1 there is a provision to describe “what sort of farmer/community recognition the Applicant has planned”? One is at a loss to appreciate the same since it is the Authority who has to determine the amount of benefit sharing. An independent study is required to find out the nature of the disclosure made in the application of the registered varieties and the steps taken by the Authority to ascertain the veracity of the same.
No wonder, the benefit sharing provisions remain a nonstarter till date. The Authority did not take any steps to realize this provision even after the issue of more than 600 certificates to new varieties. No information is available in the Annual Reports regarding the implementation of the provisions and the sharing of benefits from the Gene Fund. The Annual Accounts also do not reflect the amount deposited by the breeders in the Gene Fund under this section. Similarly, no expenditure is met from the Gene Fund for the payment to the claimants of benefit sharing. This also shows the apathy of the Authority in implementing a provision which is intended to benefit the farming communities.
Compensation under Section 41
The Act recognizes the right of the community to claim compensation from the breeder of the new variety for the contributions they made in the evolution of the variety used for breeding. According to section 41(1), the right to claim compensation on behalf of the people of a village or local community is vested with “persons or group of persons (whether actively engaged in farming or not) or any governmental or non-governmental organization”. The claim for compensation is to be made before the Centers notified for this purpose. The Centre is expected to verify the claim and if satisfied, report the same to the Authority. The Authority on receipt of the report, if satisfied and making such inquiry, issue notice to the breeder, give opportunity to file objections and hear him before deciding the amount of compensation. The compensation to be paid may be subject to the limits notified by the Central Government. The breeder is expected to deposit the amount in the Gene Fund and in case of failure to do so can be recovered by the Authority as arrears of land revenue. The practical problems as identified in case of implementation of section 26 dealing with benefit sharing are equally applicable in this case as well. It is also significant to note that the Act failed to clarify whether compensation is payable only if there is no claim for benefit sharing under section 26. No information is available regarding the implementation of this provision by the Authority. The Central Government is yet to notify the Centers where the claims for compensation can be filed under this section. Thus, this provision also remains as a dark horse till date. It is unfortunate to note that no effective steps for the implementation of these provisions have also been taken by the NGOs who were instrumental in inclusion of these provisions in the Act.
Gene Fund and its functioning
It is evident from the provisions dealing with benefit sharing and compensation, that the amount determined by the Authority must be deposited in the Gene Fund. According to section 45 which deals with Gene Fund, in addition to these amounts, the annual fee to be paid by the breeder must also be transferred to the Gene Fund. As per section 35(1), the annual fee for retention of the registration of the new variety shall be determined on the basis of benefit or royalty gained by such breeder. Accordingly, the Authority has fixed the annual fee as “Rupees 2000 plus 0.2 per cent of the sales value of the seeds of the registered variety during the previous year plus 1 percent of royalty, if any, received during the previous year from the sale proceed of seeds of a registered variety”. The Act also envisages contributions to the Gene Fund from national, international organizations and other sources.
The Government of India, vide Gov. order No. 1-11/2005-SD-V/(Part) dated 26th March, 2007, constituted the National Gene Fund and released the first grant of Rupees 50 lakhs. As per the Annual Report of 2016-17 the Gene Fund has a total balance of more that Rupees 6.5 crores. An examination of the Annual Accounts of the Authority till 2016-17 shows that the income credited to the Gene Fund is limited only to the funds granted by the Government of India and the annual fee collected from the breeders. The total amount received under the annual fee head from 2009 – 10 to 2016 – 17 is Rupees 2.17 crores and the balance seems to be the interest accrued and the contributions from the Government. Till 2016-17 there was no deposit from the breeders based on benefit sharing under section 26 or compensation under section 41. As explained earlier, there is also no evidence available regarding any payments made under benefit sharing or compensation from the Gene Fund. The only expenditure from Gene Fund has been for the award to the farmers under the schemes discussed below.
Awards and Recognitions
One of the Farmers’ Rights specified in section 39(1)(iii) is recognition and award from the Gene Fund for the conservation of genetic resources of land races and wild relatives of economic plants and their improvement used for breeding new varieties. It is surprising to note that section 45(2) dealing with utilization of the Gene Fund is silent about providing recognition and award as per section 39(1)(iii). There is also no Rule framed under the PV Rules, 2003 to implement section 39(1)(ii). But interestingly, Rule 70(2) dealing with utilization of the Gene Fund provided for “support and reward farmers, community of farmers, particularly the tribal and rural communities engaged in conservation, improvement and preservation of genetic resources of economic plants and their wild relatives, particularly in areas identified as agro-biodiversity hot spots”. Based on this provision, the Authority from 2008 onwards started awarding the “Plant Genome Saviour Community Recognition Certificate”. As per the consolidated statement on the awards given till 2014 in Annual Report 16-17, 16 PGSCR Certificates were issued [2007-08 (5), 2008-09 (4) and 2010-11(7)]. The Authority, in 2011, constituted the Standing Committee on Farmers’ Rights in accordance with section 3, to advise on farmers’ rights. One of the activities undertaken by the Committee was to recommend schemes for recognitions and awards. The Committee in its first meeting (2011) recommended a maximum of five ‘Plant Genome Saviour Community Awards’ of Rupees 10.0 lakhs each per year. 23 communities were given awards till 2014-15 (Annual Report 2016-17). The Standing Committee also recommended a maximum of ten “Plant Genome Saviour Farmers’ Rewards” of Rupees 1 lakh (from 2013 onwards, Rupees 1.5 lakhs) each for individual farmers as recognition of their conservation activities. 33 awards were given in this category from 2011-12 to 2014-15 (Annual Report 2016-17). From 2012 onwards, the Standing Committee recommended a maximum of twenty “Plant Genome Saviour Farmers’ Recognitions” with a citation and memento (from 2013 onwards, also with Rupees 1 lakh) for individual farmers. No information is readily available to find out the difference between these two awards for individual farmers. A total number of 50 awards were given in this category from 2012 to 2015 (Annual Report 2016-17). Thus, till date, 23 communities of farmers and 88 individual farmers have benefited from this scheme. It is surprising to note that no awards have been given for the last four years and no information is available as to the reasons for the same, irrespective of the fact that the Gene Fund remains underutilized. The total number of awards seem to be very limited when compared to the large number of farmers’ varieties registered under the Act and also the number of new varieties registered. It is difficult to appreciate whether this is an adequate incentive for the farmers to continue with the conservation activities.
The above analysis of the various provisions in the Act demonstrate that the farmers’ rights introduced by our Parliament with much fanfare, remain as an anathema for the farming communities. The examination of the provisions dealing with registration of “new farmers’ variety”, farmers’ variety, benefit sharing and compensation evidenced the practical difficulties in the enjoyment of these benefits by the farmers and also the lethargy of the Authority in initiating steps towards their possible implementation. The only positive measure taken by the Authority was the granting of award and recognition to farmers which also seems inadequate to incentivize the farming communities to actively engage in traditional innovation. This calls for rethinking of the provisions on the farmers’ rights included with the intent to facilitate traditional innovation in plant breeding and preservation and promotion of farmers’ variety to maintain sustainable agriculture by the farming communities.
Image from here