Once everyone is using the proprietary seeds, the price magically goes up and the farmers have less money than they had before, but the biotech company now gets a cut of every grain of wheat which has to increase year on year (growth!). This isn't the only negative outcome you could imagine.
A classic multipolar trap for the farmers because they all made an entirely rational decision at every stage and yet they all ended up worse off in the end. And a trap agrotech will be extremely happy to coax farmers into.
For their part, if they don't do it, a less scrupulous company would and so they need to do it or get outcompeted - not only must they grow, they just grow faster than the competition to survive long term. And so they are also a trap of their own where they could end up in a strongly negative situation (angry mobs after their blood, say) despite making what was both an optimal and necessary decision at every step.
Which is not to say you can't or even shouldn't use biotech to increase crop yield. It's just that you can't rely on people making rational choices for themselves to produce long-term overall good outcomes.