Lawsuit Claims Manufacturers, Wholesalers, Retailers Conspired to Fix Seed, Fungicide, Herbicide, Insecticide Prices

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A stable of crop input manufacturers, wholesalers and retailers has conspired to artificially increase and fix the prices of seeds and crop protection chemicals such as fungicides, herbicides and insecticides used by farmers, a proposed class action alleges. 

The 100-page antitrust lawsuit claims the following defendants, from at least as early as January 1, 2014 through the present, have run a “secretive distribution process” that keeps crop input prices inflated at supracompetitive levels:

• Bayer CropScience LP;
• Bayer CropScience, Inc.;
• Corteva, Inc.;
• Cargill Incorporated;
• BASF Corporation;
• Syngenta Corporation;
• Winfield Solutions, LLC;
• Univar Solutions, Inc.;
• Federated Co-Operatives Ltd.;
• CHS Inc.;
• Nutrien AG Solutions Inc.;
• Growmark Inc.;
• Growmark FS, LLC;
• Simplot AB Retail Sub, Inc.; and
• Tenkoz, Inc. 

To further their alleged conspiracy, the defendants, who the case says develop and produce between 75 percent and 90 percent of the most popular brand name crop inputs, have also denied farmers access to material market information, including transparent pricing terms that would allow for comparison shopping and better-informed buying decisions, the suit, filed in Minnesota federal court, says. Moreover, the defendants have also deprived farmers of information about seed relabeling practices, which would help them know if they are buying newly developed seeds or identical seeds merely repackaged under a new brand name and sold for a higher price, the lawsuit claims. 

“The market for Crop Inputs is structured to be secretive and opaque, in order to obscure pricing data and product information that farmers need to make informed purchasing decisions about Crop Inputs,” the complaint alleges. 

With the cost of seeds and crop inputs—fungicides, herbicides and insecticides—increasing at faster rates than farmers can profit from crop yields, the individuals are forced to take on operating debt and often end up bankrupt, the complaint says, describing an apparent “crisis situation” in the American agricultural community. 

As the case tells it, neither the cost increases nor the price disparities for seeds and crop inputs are attributable to any independent legitimate cause, such as weather or other factors. 

The suit goes on to mention that new online crop input sales platforms launched around 2014 allowed for farmers to compare prices by viewing what other farmers were paying for crop inputs, which increased price transparency. As these online sales platforms became successful with farmers, however, the defendants “conspired and coordinated to boycott” the platforms due to the threat they posed to their market position and stranglehold on prices, the lawsuit alleges.

From the complaint: 

“For example, the Manufacturer Defendants and Wholesaler Defendants agreed amongst themselves not to sell Crop Inputs to [Farmers Business Network], and enforced strict discipline on Retailer Defendants who failed to comply with the boycott. Defendants Syngenta, Bayer, BASF, and Corteva used audits and inspections of their authorized retailers to ensure that online Crop Inputs sales platforms were unable to obtain Crop Inputs from their authorized retailers.”

According to the suit, the defendants’ boycott was successful. As a result, online crop input sales platforms, such as FBN and AgVend, were unable to buy the defendants’ products to sell to farmers. The lawsuit says that this was a “devastating blow” to the platforms, and directly harmful to farmers, given the defendants are the dominant makers and sellers of crop inputs. 

Per the case, the defendants’ conduct is the subject of ongoing investigations by the Canadian Competition Bureau and the U.S. Federal Trade Commission. 

The lawsuit looks to represent all persons or entities in the U.S. who, during the class period, bought from any of the defendants a crop input made by one of the manufacturing defendants. The suit also looks to cover all persons or entities in the U.S. who, during the class period, bought from a retailer other than one of the retail defendants a crop input made by one of the manufacturer defendants. 

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