> There is some valid reasoning for the law... because you don't want a farmer to purchase 100,000 bad seeds and have his whole yield fail on his farm
That for sure can't be the reason, insurance exists, and the market exists, next year nobody would buy those seeds. Also since there's so many types and farms it's not like whole country production would go to zero for that year.
Such laws exist for animals, too. They have the fast effect, that within a few reproduction cycles after the introduction of the law, the agriculture of a whole country (or like in the case of the EU a whole super-country) concentrates on the production of species with some defined positive characteristics, predominantly yield.
The negative effects are, that the selected characteristics not necessarily are what is good for humans, i.e. taste and nutritional values.
And it leads to genetic impoverishment.
The positive effects dominate only some decades. We are now in a phase, where the negative effects begin to get dominant. It will cost a lot of effort and money to alter course.
That for sure can't be the reason, insurance exists, and the market exists, next year nobody would buy those seeds. Also since there's so many types and farms it's not like whole country production would go to zero for that year.