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Farmers file antitrust lawsuit against crop input suppliers

Farmers file antitrust lawsuit against crop input suppliers
Crop input suppliers deny allegations of collaborating with each other to keep prices high.

As farm crop inputs rise, a group of farmers have filed an antitrust lawsuit against major crop input suppliers for their alleged efforts to limit the sale of their products through e-commerce and keep prices elevated.

The most recent lawsuit was filed by Idaho farming operations — B & H Farming, Tyche Ag. LLC, Ceres Ag. LLC and Cedar Draw LLC, all based in Rupert. The suit arises from what four Idaho farming operations claim kept prices elevated by the defendants – Syngenta, Bayer CropScience, Corteva, BASF, Cargill, Winfield Solutions, Univar Solutions, CHS, Nutrien Ag Solutions, GROWMARK, Simplot AB Retail and Federated Co-operatives.

The class action suit – filed in Idaho’s U.S. District Court -  claims the defendants’ actions “deprived farmers of a free and open market and artificially increased the price of crop inputs (such as seed and crop protection chemicals like fungicides, herbicides, and insecticides) by engaging in an unlawful conspiracy to boycott electronic platforms, like Farmers Business Network, which sought to bring price transparency, increased information about crop inputs, and increased competition to the market. From this scheme to defraud, defendants have caused millions of dollars of damages in supra-competitive prices.”

In 1989, U.S. farms spent $15.6 billion overall on chemicals, fertilizer and seeds. This number rose to $59 billion in 2019, outpacing inflation by 60%. Crop inputs have consequently composed a larger share of farm budgets. In 1989, crop inputs composed 12.6% of farm expenditures; by 2019, crop inputs composed 16.4% of farmer spending, the court filing notes.

Starting in at least 2014, independent online crop input sales platforms such as FBN marketed itself as allowing users to compare prices across products and suppliers and helping farmers negotiate better prices.

The lawsuit claims because of the threat from the success of these online platforms, the defendants “conspired and coordinated to boycott these online crop input sales platforms. Manufacturer defendants and wholesaler defendants agreed amongst themselves not to sell to FBN. Syngenta, Bayer, BASF, and Corteva have used audit provisions in their agreements with retailers to ensure that no retailer goes around the boycott and provides manufacturer defendants’ crop inputs to FBN.”

The boycott has been successful as FBN has not been able to sell name-brand crop inputs, with the exception of obtaining occasional excess products from brokers.

“The crop inputs market is structured, from top to bottom, to maximize opacity and deny farmers access to the objective pricing data and product information they need to make informed decisions about the crop inputs they buy,” the suit claims. “Farmers, through no fault of their own, are unwittingly paying more for crop inputs than they would in a truly competitive market. Farmers lack the objective information and data needed to gauge whether their investments are worthwhile, as well as any ability to purchase crop inputs without paying unnecessary overhead to brick-and-mortar retailers and other costs.”

Odessa Hines, external affairs manager for BASF, says BASF has been named in several lawsuits alleging that BASF and certain other manufacturers, distributors, and retailers of crop inputs violated antitrust and other state laws governing competition.

“BASF takes any such allegations seriously,” Hines says. “However, we deny that any of the allegations are indicative of anything other than a very competitive marketplace. BASF is committed to fair competition and to providing farmers with access to the critical products they need to be successful.”

Defendants Corteva and Bayer did not respond to requests for comments.

 

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