Many Farmers Support "Right to Repair" Laws

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According to the 2017 Census of Agriculture, the average U.S. farming operation owns or leases machinery and equipment that is valued at more than $133,000.  For the largest quartile of U.S. farming operations, that figure soars to more than $414,000 in equipment value on a weighted basis.   Across the U.S. agricultural sector, farmers are estimated to have collectively spent more than $23 billion on average per year between 2017-21 on vehicles and machinery, according to data collected by USDA’s Economic Research Service.

The latest models, especially the tractors and combines, include very sophisticated combinations of hardware and software that allow row crop farmers to track input use and yield very precisely on subsections of each individual field, as well as autonomous steering, a set of applications known broadly as precision agriculture.  These features allow farmers to apply their inputs more efficiently and save on costs while maximizing yields, as described in a blog I posted back in April 2022.

However, one of the downsides of this high-tech equipment is that it is more prone to break down or malfunction than are older models with fewer bells and whistles.  These events lead to more downtime and can slow or even halt whatever field operations would normally be taking place, which can cost the farmer in potential yield if extensive delays in getting his or her crop planted result.  These problems are amplified by the fact that for some of the more complex and expensive equipment on the farmstead, farmers are contractually barred from seeking to repair the equipment themselves, especially the software components, and are required to only seek service from technicians employed by dealers authorized by the company that produced the equipment.  At the peak of planting or harvest in a given area, this requirement can create a bottleneck if such technicians are in limited supply.  Thus, the cost of the breakdown is not just whatever it costs for the repair work, unless the equipment is under warranty at the time, plus any lost potential yield due to extended downtime.  New equipment warranties typically last 1-2 years, while the machinery’s operating lifetime is likely between 10 and 20 years. 

A February 2022 survey conducted by the Public Interest Research Group (PIRG) and the National Farmers Union found that 92 percent of farmers surveyed believed that they could save money if they were allowed to repair their farm equipment themselves or engage independent repairmen.  Over three-quarters of those surveyed indicated that in the past, they had opted to buy older model equipment in order to avoid high repair costs.

Manufacturers who impose such restrictions assert that they are acting out of safety concerns, suggesting that improper repairs could lead to catastrophic failure of the equipment that could create legal liability and also put human lives at risk.  However, the repair monopolies are also highly profitable for the companies involved–according to its company filings, John Deere’s sales of parts and services are three to six times more profitable than sales of original equipment.  In recent months, some companies have made modest efforts to make their diagnostic software and owner manuals more accessible to owners and independent firms.

With many farmers frustrated with being captive customers for repair services in recent years, many farm groups have joined pushes at both the state and federal level to enact so-called “right to repair” laws, which would allow equipment owners more options on how to get their faulty equipment functioning again.  This political movement includes not only farmers, but also consumers of electronics, vehicles, and so-called smart appliances.

These legislative efforts are taking place at both the state and federal level.  The state of Massachusetts enacted a right to repair law for automobiles in 2012.  Bills addressing this issue have been introduced at least once in more than 30 other states over the last decade, and some version of the law have now been passed in a total of three states, with Colorado following Massachusetts earlier this year with a right to repair for motorized wheelchairs, and earlier this month in New York state, with a right to repair electronics.  However, none of the three laws cover farm equipment.

At the federal level, President Biden issued an executive order in July 2021, instructing the Federal Trade Commission (FTC) to establish rules to govern company restrictions on equipment owners' access to independent repair services or self-repair activities.  In response, the FTC voted unanimously a few weeks later to ramp up enforcement efforts against such repair restrictions.  More movement in this area is expected soon as the FTC is now at full strength, with three members appointed by Democratic Presidents, including the chair Lina Khan, and two members appointed by Republican Presidents, giving the chair more scope to tackle the President’s antitrust and competition agenda.

In addition, there have been two bills introduced during the current (117th) Congress that would establish a federal right to repair equipment, including farm machinery, for purchasers of such equipment.  The first bill was introduced in the House of Representatives by Rep. Joseph Morelle (D, NY) in June 2021, and would require an original equipment manufacturer (OEM) to make diagnostic, maintenance, and repair equipment available to independent repair providers. An identical version of this bill was introduced in the Senate in March 2022, by Senators Ben Ray Lujan (D, NM), Cynthia Loomis (R, WY), and Ron Wyden (D, OR).  A second bill was introduced in February 2022, by Senator Jon Tester (D, MT), a farmer himself, which is focused specifically on farm equipment, requiring original equipment manufacturers to make it easier for farmers to make these repairs and continue doing business in rural America.
 

 

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