FeganScott filed a proposed class action lawsuit alleging an illegal agreement between a group of agricultural-product manufacturers, wholesalers and retailers to artificially maintain or raise prices for seed and crop protection products. The suit claims Bayer, Corteva, Syngenta, and BASF – manufacturers of seed chemicals such as fungicides, herbicides and insecticides, collectively known as Crop Inputs – intentionally hide pricing information to reduce competition based on price among competing retailers, causing farmers to overpay for products.
The market for Crop Inputs is one of the largest markets in the world, with annual sales in excess of $65 billion.
The suit argues that the opaque pricing structure starts from the top – where manufacturers closely guard their prices, only allowing wholesalers, retailers owned and operated by the manufacturers, or other “authorized retailers” to sell their Crop Inputs. Manufacturers also use a tactic known as “seed relabeling” to capitalize on farmers’ lack of data, the suit notes. Seed relabeling is the practice of repackaging the seeds under a new brand name so that they can be sold at a higher price, even though the seeds are the same.
While several electronic sales platforms – like Farmers Business Network (FBN) – launched with the goal of providing more transparency and cheaper prices, the suit claims that these platforms threatened the manufacturers, wholesalers and retailers, which then conspired to not sell products to FBN, implementing strict penalties for retailers that failed to comply.
The suit argues that as a result of this behavior, farmers remain trapped in the Crop Inputs market, paying more for the products than they would have in a competitive market.
In addition to monitoring an investigation conducted by the Canadian Competition Bureau (CCB), reports indicate that the U.S. Justice Department and the Federal Trade Commission (FTC) are investigating this alleged anticompetitive conduct.
The lawsuit seeks to represent farmers who purchased Crop Inputs between January 1, 2014 and the present.
Read on for case updates and media coverage.