Corteva has agreed to a 10-year ban on pesticide loyalty programs that federal and state enforcers say kept generic competitors out of distribution channels, under a proposed settlement filed in the U.S. District Court for the Middle District of North Carolina.

The Federal Trade Commission and attorneys general from 12 states — California, Colorado, Illinois, Indiana, Iowa, Minnesota, Nebraska, Oregon, Tennessee, Texas, Washington and Wisconsin — alleged the company violated antitrust law through rebate programs that paid distributors on branded products only if they kept generic equivalents below a certain percentage of their purchases.

Under the settlement, Corteva admits no wrongdoing but agrees to stop three specific practices for a decade: using programs that limit generic versions of certain active ingredients to less than half of customers' purchases; making rewards in one product category depend on hitting targets in others; and requiring customers to hit targets in a later year to receive full rewards for an earlier year's purchases.

The FTC said the agreement "will prohibit Corteva from conditioning payments or other benefits to a distributor on that firm purchasing a high share of a given pesticide active ingredient from Corteva or similarly limiting its purchases of generic equivalents."

Federal Judge Thomas Schroeder must still approve the proposed agreement before it takes effect.

The settlement resolves the claims against Corteva only. Similar claims against Syngenta, another pesticide manufacturer named in the enforcement action, remain unresolved and continue through the courts.

For growers, the case centers on how crop-protection products reach distribution and at what price. Loyalty and rebate structures that reward distributors for limiting generic purchases can affect the availability and pricing of off-patent alternatives to branded insecticides, herbicides and fungicides — a direct input-cost question for row-crop budgets where chemical spend is one of the largest variable expenses.

Inari settlement

The same day, Corteva announced it had settled a separate lawsuit against seed company Inari, which Corteva had filed alleging seed trait theft. The settlement came mid-trial, while a jury was hearing the case.

"Inari has agreed to destroy Corteva material it accessed from seed depositories and material developed from the deposits and assign to Corteva the intellectual property related to its edited versions of Corteva events," Corteva said in a news release. "In addition, Corteva and Inari have agreed to negotiate certain licensing arrangements. Other terms of the settlement are confidential."

The dual announcements close two legal fronts for the input maker on the same day — one antitrust, one intellectual property — both with implications for how seed traits and pesticide products move through the ag supply chain.

Growers and distributors should watch Judge Schroeder's ruling on the proposed consent agreement, the yet-unresolved Syngenta claims, and whether the Corteva-Inari licensing negotiations produce commercial trait agreements in the months ahead.