W R Grace, a New York-based conglomerate with annual sales last year of dollars 5.5bn, has enraged Indian farmers and environmental groups who object to companies patenting seeds and plants that local people have used for centuries.
Extracts of the neem tree, a fast growing evergreen, are used by the Indian people in insecticides, contraceptives and soap.
Indian law does not allow agricultural and medicinal products to be patented. But under the Dunkel Draft of the Gatt trade agreement, currently on the table, India and other countries would be forced to introduce legislation to ensure 'protection of plant varieties', either by patents or by an alternative deemed equally effective. Opponents fear this will restrict farmers' access to traditional seed varieties by making them illegal if not patented.
W R Grace gained its patent in 1988 on an extract called Margosan-O after saying it had developed a novel process to render the extract stable. Opponents say stabilising the extract is unnecessary unless it is to be packaged and kept for a long while.
Small farmers fear the company will corner the market for neem-based pesticides, drive up the price of seed and make it too expensive for poor farming communities whose livelihoods depend on the product.
Nicholas Hildyard, campaign co-ordinator for The Ecologist magazine, said: 'It is quite immoral for western countries to go in and appropriate Third World knowledge, take out patents on very minor modifications to a traditional use of a plant, then make large profits from it and sell it back to the people who discovered it.
'The only novelty here is that neem has been discovered by the West.'
The company has set up a plant in India to process 20 tons of neem seeds a day. Opponents argue this will mop up the bulk of the supply of seeds, making it almost impossible for local farmers to buy their own for crops.
The company says its operations in India are providing employment and 'high remuneration' to farmers from whom they are buying seed. It claims the project also generates valuable foreign exchange for the country.
Yesterday's protest took place outside the London offices of Cargill, a US grain multinational and strong supporter of the new patent regime under Gatt. It hopes to capture 25 per cent of the sunflower seed market in India.
Mass demonstrations are expected in India today, by farmers angry at the West's attitude to ownership of their native plants, and the threat they feel this poses to their livelihoods.