Another class-action antitrust claim has been lodged in federal court against Bayer AG, Corteva Inc., BASF Corp, Syngenta Corp., Nutrien Ag Solutions, Growmark Inc., and other crop input producers and wholesalers/retailers, alleging that these companies are violating state and federal antitrust laws through a coordinated boycott of e-commerce sales platforms like Farmers Business Network (FBN). Other companies targeted by the complaint include Cargill Inc., Winfield United, Univar Solutions Inc., CHS Inc., Tenkoz Inc., Federated Co-operatives Ltd., and the J.R. Simplot Co. subsidiary Pinnacle Agriculture.
The new case was filed by four Rupert, Idaho-based farmers – B&H Farming, Tyche Ag, Ceres Ag LLC and Cedar Draw LLC – on behalf of themselves and others similarly situated, in the U.S. District Court for the District of Idaho on March 15. A very similar complaint – Piper v. Bayer CropScience LP – was filed by a farmer’s widow in Illinois in January (GM Jan. 15, p. 1).
Like the Piper case, the Idaho complaint alleges that the existing distribution process for crop inputs maintains “supracompetitive” prices by “denying farmers accurate product information, including pricing information, which would allow them to make better-informed purchasing decisions.” Also like Piper, the complaint noted that farmers are the least profitable level of the American food supply chain and are drowning in hundreds of billions of dollars of operating debt that is forcing them into bankruptcy at a record pace.
Again like Piper, the complaint noted that seed corn prices have risen 300 percent over the last 20 years, while corn yields have increased only 33-35 percent.
“…even as farmers are paying monopoly prices for a diminishing selection of seed strains produced by handful of giant corporations, they also are paying monopoly prices for fertilizers and pesticides, often to the same corporations,” said the complaint. “Since 2017, the Big Six seed and agrichemical companies have shrunk to four, after Dow merged with DuPont and Bayer purchased Monsanto. The top four producers of nitrogen fertilizer controlled 34 percent of the market in 1977, but by 2015 had increased their share to more than two-thirds.”
Plaintiffs also accused seed producers of seed relabeling, taking seeds that have been on the market under a given brand name for some time and repackaging the seeds under a new brand name so that they can be sold at a new, higher price, even though the seeds are the same.
While the initial focus of the complaint started out with the seed and crop protection companies, the plaintiffs argue that they audit wholesalers and retailers to make sure that they are not selling to FBN and other e-commerce sites.
“What we found was that the price differences farmers were experiencing in the market were horrendous,” the complaint cites FBN Co-Founder Charles Baron as saying. “You could have chemical prices being seven times each other between two farms and certain products, and seed prices varying 100 percent within a state. This is caused by a lack of transparency.”
Earlier, FBN had told Green Markets that it is not a party to the Piper case and would therefore have no comment. Also regarding Piper, BASF said it strongly disagreed with the allegations in the lawsuit and intends to defend itself vigorously. Nutrien denied all allegations but declined to comment further on “the potential litigation.”
Canada’s Competition Bureau launched an investigation into allegations that a number of manufacturers and wholesalers of seeds and crop protection products have anti-competitively refused to supply or restricted supply to FBN (GM Feb. 14, 2020). It is also investigating whether some of these entities may have engaged in coordinated behavior against FBN. According to the Bureau, the manufacturers and wholesalers under investigation include BASF, Bayer-Monsanto, Cargill, Corteva, Federated Coop, Univar Solutions, and Winfield.
In addition, the U.S. Justice Department is “monitoring” the Canadian probe as it weighs whether to launch one of its own, and the U.S. Federal Trade Commission is also investigating, according to the complaint.