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Crop Inputs Antitrust and RICO Class Action

Crop inputs include seeds and the chemicals that protect them, such as fungicides, herbicides, and insecticides. This class action brings suit against four manufacturers, three wholesalers, and a number of retailers alleging violations of antitrust laws and the Racketeer Influenced and Corrupt Organizations (RICO) Act.

The defendants include companies like Bayer CropScience Incorporated, Syngenta Corporation, Cargill Incorporated, CHS Incorporated, and others.

The complaint alleges, “Historically the distribution and sale process for Crop Inputs enables the market participants to maintain supra-competitive prices, in part by denying farmers accurate product/pricing information… As a result, the average price American farmers pay for Crop Inputs is increased at a rate that dramatically outpaces yields.”

The complaint points to a 300% increase in the price of seed corn, with only a 33% to 35% increase in yield. “In 1989,” it says, farms in the US “spent $15.6 billion overall on chemicals, fertilizer, and seeds. This rose to $59 billion in 2019, outpacing inflation by 60%.” The portion of farm budgets spent on crop inputs has also risen, squeezing farmers.

Because of this, the past decade saw the rise of electronic sales platforms (ESPs), like Farmers Business Network (FBN), that the complaint says “aimed to provide a cheaper, more transparent way for farmers to buy Crop Inputs…”

However, this did not allow the existing companies to keep control over pricing. “Rather than compete fairly with the ESPs,” the complaint claims, “Defendants, wholesalers, and retailers conspired to block the ESPs’ access to Crop Inputs by engaging in a group boycott.” For example, the complaint alleges, they agreed among themselves not to sell their crop input products to FBN, “even though doing so would have opened a significant new sales channel and [been] in the best economic interests for any of them acting independently.”

The complaint alleges, “The Manufacturer Defendants ensured the success of the boycott by imposing strict penalties on retailers who made sales to FBN. Similarly, certain manufacturers audited authorized retailers to make sure that ESPx were not securing branded Crop Inputs by buying from an authorized retailer.”

FBN then tried to buy a retailer with existing supply agreements, but the defendants in this case simply canceled the retailer’s agreements.

Because of this anticompetitive behavior, the complaint alleges that farmers have had to pay more for crop inputs than they otherwise would have.

Two classes have been defined for this action:

  • The first is all persons or entities living in the US or its territories, who bought from one of the defendants in this case a crop input made by one of the manufacturing defendants in this case, between January 1, 2014 and the present.
  • The second is all persons or entities living in the US or its territories who, between January 1, 2014 and the present, bought from a retailer other than one of the retailer defendants in this case a crop input made by a manufacturer defendant in this case.
Article Type: Lawsuit
Topic: Antitrust

Most Recent Case Event

Crop Inputs Antitrust and RICO Complaint

May 27, 2021

Crop inputs include seeds and the chemicals that protect them, such as fungicides, herbicides, and insecticides. This class action brings suit against four manufacturers, three wholesalers, and a number of retailers alleging violations of antitrust laws and the Racketeer Influenced and Corrupt Organizations (RICO) Act.

Crop Inputs Antitrust and RICO Complaint

Case Event History

Crop Inputs Antitrust and RICO Complaint

May 27, 2021

Crop inputs include seeds and the chemicals that protect them, such as fungicides, herbicides, and insecticides. This class action brings suit against four manufacturers, three wholesalers, and a number of retailers alleging violations of antitrust laws and the Racketeer Influenced and Corrupt Organizations (RICO) Act.

Crop Inputs Antitrust and RICO Complaint
Tags: Agriculture, Antitrust, Collusion and Price Fixing, RICO laws