Sales of utility and compact utility tractors have declined sharply from an artificial high, which was attributed to acreage owners stuck at home during the pandemic and spending their cash on home improvement projects, including small tractors.

“During COVID, a lot of folks bought small ag, because they were kind of trapped in their home and saw projects out their window,” AGCO chief executive officer Eric Hansotia said during an interview broadcast on Yahoo Finance.

“So they pulled in demand to work on those projects. We saw a lot of demand (for small tractors) over the last few years. That’s cooled off a little bit.”

The good news is the pace of sales for agricultural tractors of more than 100 horsepower. As well, combine sales have increased significantly in both the United States and Canada so far this year and they offer much higher profit margins than small tractors.

Overall, the major manufacturers report much larger profits for the second quarter of this year compared to the same period in 2022.

At AGCO, the numbers have soared to a record high.

“We had the best quarter in the history of the company this quarter,” said Hansotia. “I mean, it was a blowout quarter.”

Net sales for Agco, the parent company of Fendt and Massey Ferguson brands, in the second quarter of 2023 hit $3.8 billion, a 29.8 per cent increase over the same period last year (all figures US$).

At CNH Industrial, the parent company of Case IH and New Holland, net sales rose by more than $300 million from a year ago.

John Deere also racked up a rosy balance sheet in its third quarter performance. Deere’s fiscal year is slightly offset from its two major competitors, so its comparable reporting period is its third quarter, which ended July 30.

“Worldwide net sales and revenues increased 12 per cent to $15.801 billion for the third quarter of 2023 and rose 24 per cent, to $45.839 billion, for nine months,” it revealed in a quarterly earnings report.

“Net sales were $14.284 billion for the quarter and $41.765 billion for nine months, compared with $13 billion and $33.565 billion last year.”

“Reflected by our strong third-quarter results, Deere continues to benefit from favourable market conditions and an operating environment showing further improvement,” John May, company chair and chief executive officer, said in a news release. “We are also being helped by stabilizing conditions in the supply chain … and an improving ability to meet demand for our products and serve customers.”

The large equipment makers expect this trend to continue because of several positive factors. Higher grain prices caused in part by the Russian invasion of Ukraine are among them. They also believe continued development of new technologies and more sophisticated machines will continue to drive demand for new equipment.

“Now going forward, we’re continuing on the pace we’ve been on for the last few years,” Hansotia said. “We’re continuing to invest in more engineering. I’ve raised engineering (spending) 20 per cent every year since I’ve been leading the company. It’s all to fuel these technology-rich projects on our product that add more value to farmers, and in turn add more value to investors.

“Our margins have steadily been going up. We’ve been gaining market share.”

Deere’s prediction for the future is optimistic too. It expects net income for its fiscal 2023 production year to be in a range of $9.75 billion to $10 billion.

“Deere is well on the way to another year of exceptional achievement due in large part to positive fundamentals in the farm and construction sectors and the unwavering commitment of the Deere team, including our dealers and suppliers,” May said.

“Fundamentals are expected to continue fuelling solid demand for our equipment, supported by a strong advance-order position.”

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The right to repair allows consumers to repair goods themselves or have them repaired by original equipment manufacturers (OEMs) or at independent repair shops. Key elements of the right is that repair manuals, tools, replacement parts and services must be available at competitive prices.

Right-to-repair movements have sprung up in the United States, Europe, South Africa, Australia and Canada, encompassing a range of products. Most familiar might be efforts to allow consumers to choose independent shops to repair their phones and computers.

But the right to repair also involves battles over who should be able to fix Internet of Things devices (all physical objects related to accessing the internet), as well as other products that function via embedded software systems, such as vehicles, agricultural equipment and medical equipment.

For too long the right to repair has been a casualty of the digital economy. Many manufacturers have discouraged or outright prohibited independent repair. They do this in part by threatening penalties for copyright infringement or by voiding warranties for products repaired by independent shops or using non-OEM parts.

The corporate power to deny repair is possible because companies that control the digital hearts of software-enabled products can use copyright law to restrict their customers or third-party services from fixing these products. Today, this includes everything from laptops to refrigerators, vacuum cleaners, tractors and fitness wearables.

READ MORE: Agco, Kubota sign onto U.S. right-to-repair pledge

Identifying problems with software-enabled goods often necessitates the use of diagnostic software, while undertaking repairs often requires copying all or part of the product software. However, manufacturers’ licensing agreements typically prohibit any actions, including repair, that copy or alter the product’s software.

The manufacturers contend that such actions constitute copyright infringement. Companies typically cite this provision to prohibit any repairs undertaken by individuals not licensed by the original manufacturer. Companies may not actually sue customers for copyright infringement, but they may target independent repair shops.

Such tactics may discourage self-repair or the use of independent service people.

Questions of who can repair products and under what circumstances are fundamental to the nature of ownership and control. In fact, control over intangible forms of knowledge such as intellectual property and software-enabled goods is central to exerting power in the knowledge economy.

The right-to-repair movement can be understood as a consumer pushback against the commodification of knowledge and a battle over who should be allowed to control and use knowledge — to repair, tinker or innovate — and in whose interests.

Battles over the right to repair have particular relevance for Canada. Major manufacturers, often headquartered in the U.S. or Europe, set rules regarding repair that privilege their business models. These rules favour their branded suppliers and authorized repair technicians to maximize control over repair services.

This not only shuts out Canadian third-party businesses that supply replacement parts and repair services, but also disadvantages Canadian consumers.

As the Canadian government prepares for consultations on implementing the right to repair, I offer several suggestions.

First, policymakers should build upon right-to-repair efforts elsewhere, particularly Australia, the European Union and the U.S.

Australia appears to be moving toward a right to repair. Its consumer watchdog agency, the Australian Competition and Consumer Commission, studied the effects of restrictive repair practices on the agricultural machinery and the after-sales market in that country in 2020.

The European Parliament adopted resolutions on the right to repair in 2020 and 2021, and is planning a legislative proposal on the matter by mid-2023, building upon several years of working to make manufacturing and product design more eco-friendly.

In the U.S., President Joe Biden strengthened the case for right to repair in July 2021 with an executive order supporting competition. Recently, attorneys general from 28 states called on lawmakers to advance a right to repair federally.

Second, it’s important to effectively counter industry opposition, which has been successful in defeating right-to-repair legislation. Such legislation continues to face stiff industry opposition at the state level in the U.S.

Big companies in the technology, vehicle and agricultural industries have long lobbied against the right to repair. They argue that repairing or tinkering with their software-enabled products raises potentially serious security and safety complications.

Though such concerns may be valid in some cases (particularly when dealing with safety-critical goods such as medical devices), these are exceptions. In many cases, however, independent repair by appropriately trained technicians can be a safe, viable alternative to manufacturers’ “authorized” repairs.

Third, policymakers should ensure broad engagement with and representation from the people who are most affected by restrictive repair policies. These include farmers, independent repairers, small retailers of refurbished goods, people who patronize second-hand or reseller stores, and those in the aftermarket industry selling third-party parts.

Input is also needed from people living outside major population centres who must travel to authorized repair shops or otherwise incur costs in time and money in receiving service.

Fourth, it’s time to recognize that the right to repair has benefits beyond consumer rights. Repair bolsters secondary markets, including second-hand stores and resellers that provide their customers with viable used goods, which are important money-savers for economically marginalized communities.

Repair also helps decrease the environmental burden of modern consumerism. This problem is particularly acute in the manufacture of many electronic technologies. Once these products no longer function, they are dumped as e-waste, often in developing countries.

Finally, policymakers should consider a broad interpretation of the right to repair. This could include requiring manufacturers to make available at competitive prices the necessary items for repair, including diagnostic software and replacement parts. It could restrict manufacturers’ practice of planned obsolescence; that is, letting functional goods be rendered inoperative by withholding essential software updates.

The federal government is offering Canadians a chance to create a right to repair. We should seize the opportunity.

Natasha Tusikov is an associate professor in the Department of Social Science at York University and an expert on digital and technological policy.

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