An 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).
Attorneys for plaintiff Barbara Piper, a
farmer’s widow who oversees her deceased husband’s estate, have asked the U.S.
District Court for the Southern District of Illinois to certify the case as a
class action. 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
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.” As a result, according to the complaint,
“the average price American farmers pay for crop inputs is increasing at a rate
that dramatically outpaces yields,” forcing farmers into an “existential
crisis.”
As
one example, according to the complaint, seed corn prices have risen 300
percent over the last 20 years, while corn yields have increased only 33-35
percent. “Between 1995 and 2011, the cost of growing soybeans and corn – the two most planted field
crops in the U.S. – increased by 325 percent
and 291 percent, respectively, but yields for those same crops rose by only
18.9 percent and 29.7 percent,” the claim states.
“This
disparity is proving increasingly devastating to farmers, who are now 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,” the complaint claims. “This steady cost increase is not
attributable to escalating research and development expenditures, which have
decreased considerably over the past several years. Rather, it is the result of
massive, unjustifiable disparities in the prices farmers pay for crop inputs –
the seeds and chemicals such as fertilizer, insecticide, and herbicide used to
produce a crop – which can vary by as much as 60 percent within a single geographic
region.”
The complaint further alleges that when several e-commerce platforms launched in recent years to address these concerns, the defendants conspired to block the platforms’ access to crop inputs by engaging in a group boycott.
“These
new platforms threatened the defendants’ dominant market position and control
over crop input pricing,” the complaint states. “The manufacturer and
wholesaler defendants repeatedly blocked FBN’s access to crop inputs by
agreeing amongst themselves not to sell FBN products, even though doing so
would have opened a significant new sales channel for any individual wholesaler
or manufacturer acting independently and in their unilateral best economic
interest.”
FBN
told Green Markets that it is not a
party to the lawsuit and therefore has no comment. AgVend Inc., another
e-commerce crop inputs business that is mentioned in the complaint along with
FBN, stressed that it has no part in the lawsuit and is exploring every legal
avenue to remove any references to AgVend from the complaint.
“Not only are we inaccurately represented, we categorically
deny all allegations pertaining to AgVend in the lawsuit,” AgVend CEO Alexander
Reichert told Green Markets. “To the
contrary, we have long-standing partnerships with many of the defendants and we
fully support the work they do to serve the American grower.”
A BASF spokesperson told Bloomberg Law in a Jan. 11 statement
that the company “strongly disagrees with the allegations in the lawsuit” and
intends to defend itself vigorously. “Most importantly, BASF is committed to a
fair and competitive marketplace that provides access for farmers to the
critical products they need,” the statement said.
A Nutrien spokesperson told Bloomberg Law that the company denies
“all allegations of wrongdoing,” but declined to comment further on “the
potential litigation.” Bloomberg Law
reported that representatives of Growmark and CHS declined to comment, with
Growmark citing the pending nature of the litigation.
Bloomberg Law
reported that Canada’s Competition Bureau is investigating, and the U.S.
Justice Department is “monitoring” that probe as it weighs whether to launch
one of its own, according to the complaint. The case is Piper v. Bayer
CropScience LP, S.D. Ill., No. 21-cv-21, complaint filed 1/8/21. The plaintiff
is represented by Korein Tillery LLC and Lowey Dannenberg PC, St. Louis, Mo.
