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Loyalty programs have been part of the seed and chemical industry — typically, the seeds and pesticides required to grow commodity crops are sold together — for decades. Some have termed them “velvet handcuffs” that are designed to fend off generic competitors, which sell cheaper options to resellers.
Major seed and chemical companies have argued they spend years and millions of dollars producing their products and then the patent ends. When that happens, generics can undercut their profits. Companies have also sued generic companies when they try to enter the market, alleging copyright infringement.
Bayer has agreed to suspend for seven years pillars of its loyalty programs, which Trump administration officials called “unfair provisions” that “pose a danger to competition,” the U.S. Department of Justice announced Wednesday.
The agreement relates to how Bayer sells the seeds it produces through years of research and development. Bayer sells corn and soybean seeds to middlemen who then sell to farmers. To maintain the middlemen’s loyalty, Bayer implemented incentives that prevented resellers from seeking out potentially cheaper alternatives, according to the DOJ.
Loyalty programs in the chemical and seed industries have led to higher prices for farmers, federal authorities have said.
The DOJ did not immediately respond when asked why the agreement was for seven years.
Bayer did not respond when asked by Investigate Midwest if it planned to reinstate the provisions after the agreement ended, but the company said in a general statement that it accepted the agreement because it believes “these changes made sense” for Bayer and its resellers.
With few specifics of the agreement public, it’s hard to judge how effective the deal will be at lowering prices for farmers, said Bill Freese, the science director at the Center for Food Safety, which has studied the effect of seed industry concentration on farmers.
“While vigorous antitrust actions are needed in the seed-pesticide sphere,” he said, “these modest agreements with Bayer do not go nearly far enough to help American farmers suffering from Trump’s anti-farmers policies.”
The DOJ said Bayer’s loyalty program was a “key subject” of the department’s Antitrust Division’s ongoing investigation into the corn and soybean seed markets.
Under the program, Bayer required resellers to meet sales targets for both corn and soybean to qualify for discounts from Bayer. This arrangement “raised concerns that Bayer was anticompetitively tying corn seed and soybean seed,” the DOJ said in its announcement.
The company dropped the connection for the 2025 planting year, according to the DOJ.
Another aspect of Bayer’s loyalty program involved incentives that the DOJ said might limit resellers’ willingness to purchase seeds from Bayer’s competitors. The incentives are not detailed in the DOJ’s announcement, and the DOJ did not respond to a request for comment asking what they were.
Loyalty programs have been part of the seed and chemical industry — typically, the seeds and pesticides required to grow commodity crops are sold together — for decades. Some have termed them “velvet handcuffs” that are designed to fend off generic competitors, which sell cheaper options to resellers.
Major seed and chemical companies have argued they spend years and millions of dollars producing their products and then the patent ends. When that happens, generics can undercut their profits. Companies have also sued generic companies when they try to enter the market, alleging copyright infringement.
The seed and chemical industry is highly concentrated. The first Trump administration oversaw three mergers, including Bayer’s purchase of Monsanto, that further consolidated the marketplace.
Just two companies, Bayer and Corteva, sell more than half of all corn and soybean seeds in the U.S., according to 2023 U.S. Department of Agriculture research. The companies also own the vast majority of patents related to corn and soybeans.
When the Biden administration took over in 2021, officials at the U.S. Department of Agriculture created a working group — along with the U.S. Patent Office, the Federal Trade Commission and the DOJ — to address the industry’s concentration.
A USDA spokesperson said the working group’s “activities have wound down,” but the department “continues to coordinate” with the patent office on “seed and plant variety protection issues.”
Part of the Biden administration’s initiative was creating a new Farmer Seed Liaison to receive complaints from farmers about potentially anti-competitive practices. The complaint page is still on the USDA’s website.
In 2025, Trump officials at the USDA and the DOJ signed a memo stating they would maintain their “cooperative relationship” to protect farmers from high input costs. The DOJ’s announcement said the agreement with Bayer partly grew out of this relationship.
Also under Biden, the FTC sued two major industry players, Corteva and Syngenta, over their loyalty programs related to pesticide sales. The FTC alleged the programs limited competition, which then raised chemical prices for farmers.
The FTC cited internal emails from Corteva employees where they discuss preventing sales from other companies. “Our team truly has done an A+ job blocking generics,” one email read.
The FTC’s lawsuit is ongoing. A class-action lawsuit with similar allegations is also ongoing. Bayer is not a subject of either lawsuit.
Both Trump administrations have generally been lenient with corporations who faced government investigations over alleged wrongdoing. In his first term, the USDA hamstrung an independent agency tasked with investigating unfair market practices in the meat industry.
Since taking office again, the administration has canceled enforcement actions against 153 companies, according to Public Citizen. The DOJ’s antitrust division has also lost hundreds of attorneys and employees that could help build cases against industry behemoths.
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