As part of the settlement Seednet has admitted it breached the Australian Consumer Law with misrepresentations about the straw strength and resistance to leaf rust of the barley, known as Compass.

Barrister for the Australian Competition and Consumer Commission, Dr. Oren Bigos, told the Federal Court Monday that the grain supplier accepted it knew or should have known that the factsheet it sent to farmers about Compass contained false statements from as early as December 2014. Seednet did not correct the information for two years, the court was told.

“The information was relevant to farmers’ assessment of its suitability for planting,” Bigos said, adding that the contraventions were serious and that Seednet’s national manager was directly involved in the breaches.

Seednet barrister Nick De Young told Justice David O’Callaghan that while the company agreed it had misled farmers, the extent to which they had suffered loss or damage from the misrepresentations was not known.

Compass ranked second best in 2015 and above average in 2016 in terms of crop yield, De Young  noted.

“The parties have taken into account the potential loss to customers in arriving at the agreed [penalty] amount,” he said.

The ACCC brought the action against Seednet in August, claiming the company made false claims that Compass had stronger straw than its predecessor, Commander; had improved resistance to failure and was better suited to early sowing, higher fertility paddocks and higher nitrogen rates.

Compass, was developed by the University of Adelaide, and Seednet distributed it under a license agreement with the university.

In announcing the case, the ACCC said potentially misleading marketing of agricultural produce was a key complaint by farmers.

“Farmers have told us they suffer harm as a result of misleading marketing because, without correct information, they assume or are incorrectly advised that other factors such as the weather are to blame when crops don’t succeed or perform in the way that has been represented by suppliers,” ACCC deputy chair Mick Keogh said.

“Agribusinesses should be careful to ensure they have a proper basis for marketing the qualities of new agricultural varieties and that they do not misrepresent the properties or performance of new products. Any misrepresentations risk ACCC enforcement action.”

The settlement will also require Seednet to put a compliance program in place, Bigos said.

Justice O’Callaghan is expected to rule on the settlement by the end of the week.

The ACCC is represented by Corrs Chambers Westgarth. Seednet is represented by K&L Gates.

The case is Australian Competition and Consumer Commission v Landmark Operations Limited.