INVESTIGATE MIDWEST: Farmers have clamored for the Right to Repair for years. It’s getting little traction in John Deere’s home state

[April 16, 2024]  By Jennifer Bamberg, Investigate Midwest, Investigate Midwest
Originally published April 10, 2024

During the 2023 harvest season, one of Jake Lieb’s tractors quit working. A week later, his combine stopped working, too. Both were new — and he was locked out from making any repairs himself because of software restrictions embedded in the machines.

Instead, a technician from John Deere was dispatched to diagnose and repair the problems. While waiting for the technician to come out, Lieb fired up a 20-year-old tractor he hadn’t used for harvesting in years. Crops are vulnerable to the weather, and had he not, Lieb could have lost at least a day of harvest. Some of the crop might have dropped to the ground, rendering it unsalvageable, potentially costing him thousands of dollars.

“Meanwhile,” Lieb said, “we’ve got over a million dollars of equipment in the field, inoperable.”

When the technician from John Deere arrived at his farm in central Illinois, it took about 30 minutes total to plug in a diagnostic tool, see which sensor was bad, unscrew it, replace it and close everything up in the combine.

“If I knew what sensor was bad in that combine, I could have had it fixed in five minutes,” Lieb said. “But if you don't have the software, it's impossible to know what's wrong.”

For more than a decade, farmers like Lieb haven't been able to fix their high-tech equipment. Until recently, manufacturer restrictions meant only company-authorized representatives could own and use diagnostic tools, and make fixes when needed.

In March 2023, in an attempt to address farmers’ frustrations, the American Farm Bureau Federation signed a memorandum of understanding with John Deere and four other farm equipment manufacturers. The farm bureau called it a “private-sector solution to the right to repair issue.”

In the agreement, Deere, Kubota, Case New Holland, AGCO, and CLAAS of America promised to give farmers and independent repair shops access to customer diagnostic tools. In exchange, the Farm Bureau agreed not to support any federal or state repair legislation.

However, advocates for repair legislation say that the nonbinding agreement and the customer versions of tools provided by the companies fall short of needed protections that legislation would ensure. These same advocates are supporting bills across the country, including one introduced this year in the Illinois Senate.

The Illinois bill (SB2669) proposes to establish an agricultural equipment bill of rights. It would require manufacturers to make software, firmware and all other tools needed to repair machines accessible to independent repair shops and owners throughout the state at a reasonable cost.

The bill directly addresses the MOU, and says that agricultural equipment owners are entitled to any tools or software not covered by the MOU. The bill’s sponsor, Sen. Jil Tracy (R-Quincy), declined to comment after multiple attempts by email and in person to reach her. Deere and the other farm equipment manufacturers also did not return multiple requests for comment.

The bill is languishing at the statehouse. According to a spokesperson from the Illinois Corn Growers Association in an email to Investigate Midwest, there’s no chance the bill will pass this year.

The cost of repair

The demand for new tractors and combines ebbs and flows, but a consistent source of profit growth for John Deere is the sale of parts and services. Despite a 19% drop in sales of new ag equipment sales from between 2013 and 2019, supply chain disruptions and food system upheaval in 2020, and a month long labor strike of 10,000 workers across five states in 2021, Deere’s profits swelled the past three years, totaling a nearly 270% increase from 2020, according to the company’s SEC filings.

According to Bloomberg, the sale of parts helped buoy the company’s portfolio — parts sales grew by 22% between 2013 to 2019.

While Lieb’s fifth-generation family farm operates on annual tractor trade-ins so his machines stay on a warranty, which includes free parts and services, he’s in the minority. According to the U.S. Department of Agriculture, only 20% of farmers in the U.S. regularly buy new machines.

The rest hold on to their equipment for longer periods of time or buy second-hand machines, which come with limited warranties or none at all, making repair restrictions more consequential.

Equipment made before 2014 doesn’t have as much complicated software, and there are more repair workarounds. Still, the costs of repairing older machines add up.

According to the Bureau of Labor Statistics, the cost of parts and labor, for ag equipment of all ages, has nearly doubled in the past two decades and spiked 41% since 2020. (Farm machinery is grouped together with construction and mining equipment by the bureau.)

In 2023, Kevin O’Reilly, then with the Public Interest Research Group, conducted a study of the cost of repairs directly tied to downtime and repair restrictions imposed by equipment manufacturers. He found that farmers lost an average of $3,348 per year to repair downtime.

The study of 53 farmers in 14 states estimated that if every farmer in the country faced similar losses, repair restrictions placed on them would cost U.S. farmers more than $3 billion a year.

“Even with our older machines — the stuff without software,” said one farmer in the study, “we were paying more because we were running up the hour counts. When stuff gets old, it breaks down more often.”

Curbing pollution leads to digital transformation
In the mid-1990s, the Environmental Protection Agency introduced emissions standards for agriculture diesel equipment as part of a growing effort to curb air pollution. The agency gave manufacturers nearly two decades to meet certain benchmarks in a set of four tiers, each with increasingly stringent regulations. The final set of standards rolled out in 2014.

To meet those emissions standards, complex computers were installed in agricultural machinery, which manage a wide range of functions and systems in the machines. This, in part, led to a technological revolution in farm equipment manufacturing, and drove the shift from mechanical operations to electronic controls.

In addition to monitoring emissions output, combines and tractors are now loaded with digital sensors that measure everything from humidity in the air to the density of the soil on a centimeter-accurate grid, instantaneously sharing those metrics with the cloud via satellite and GPS imaging. Deere’s quest to create optimum efficiency is driving the company to develop a fully autonomous fleet by 2030.

In reality, a faulty sensor in Lieb’s case caused his combine to shut down. And up until the MOU last year, farmers like him and independent repair technicians couldn’t access the necessary software tools to make their own repairs or clear a code once the repair was completed.

But why was the MOU even necessary? Over the years, Deere has argued in court that a farmer may own a tractor, but they don’t own the software that makes it run.

In a seeming win for farmers seeking the right to repair, the Library of Congress ruled in 2015 that repairing agricultural equipment is not an infringement on copyright. However, the ruling fell short of requiring equipment manufacturers to make their diagnostic tools publicly available.

Customer tools leave much to be desired

With nearly 6 million members nationally and 400,000 in Illinois, the American Farm Bureau Federation is the largest organization of farm and ranch families in the country and a powerful agriculture industry lobbying group. (The Census of Agriculture counts about 3 million farmers total in the U.S.; the farm bureau invites non-farmers to apply to be members.) The organization has drawn the ire of repair advocates over the memorandum of understanding.

The 2023 MOU was brokered between the farm bureau, John Deere, CNH Industrial, CLAAS, AGCO, and Kubota. The companies agreed to release customer diagnostic tools, which range in annual subscriptions, for example, between $1,500 from CNH to $3,100 from John Deere.

Repair advocates with the Public Interest Research Group, a federation of nonprofits focused on consumer protection issues, compared the John Deere customer tool to the authorized company tool, and said the customer version leaves much to be desired. That is why state or federal regulation is required, advocates argue.

PIRG Director Nathan Proctor said he took it personally when he saw the differences. “It was almost like (the customer’s tool) is redacted or obfuscated,” he said.

John Deere equipment at Jake Lieb’s farm near Monticello, Illinois, on Monday, March 18, 2024. photo by Darrell Hoemann, Investigate Midwest.

The tool provides a lot of information, Proctor said, but it’s inferior compared to what dealers have, and requires customers to go through extra steps in order to accurately diagnose issues and clear codes once the repair is complete. This leaves independent technicians and farmers at an unfair advantage in the market of equipment repair, he said.

“Essentially, the dealers have a privileged level of access,” said O’Reilly, former right-to-repair campaign director for PIRG. “They can get through a digital door to press a button that you need to press in order to fix the thing, and farmers either don’t have access to that door, the door was locked, or they had to go through three, six, nine different doors just to get to the same place that the dealer was able to get to, right away.”

PIRG focused their study solely on Deere tools because of the company’s dominance in the market. “When people think of agriculture or farming, John Deere is one of the first brands that comes to mind,” O’Reilly said. “They definitely have a level of dominance both as far as in the market but culturally as well.”

Only three companies control the highly concentrated U.S. market for agricultural equipment — CNH, AGCO and Deere — and Deere commands nearly half of that. Globally, Deere controls a quarter of the market share of all ag equipment sales worldwide.

An influential giant in agricultural equipment

The first right-to-repair bill was introduced in Illinois in 2018. It would have applied to a broad category of electronic equipment, including electric wheelchairs, laptops, smart phones, and medical equipment, had it passed. After lining up nine bipartisan co-sponsors and hearing debate, it died on the House floor. It was opposed by numerous associations and large agribusinesses, including John Deere and CNH.

Deere & Company has been headquartered in Moline, Illinois, for the last 176 years, growing into the agricultural giant it is today with more than 80,000 employees worldwide and profits topping $10 billion in 2023.

As the nation’s leader in soybean crops and second in the nation for corn production, Illinois exports millions of bushels around the globe, generating billions of dollars of revenue. And when farmers profit, John Deere profits.

Some of that money flows into the state capital. The John Deere Political Action Committee donated more money to Illinois politicians since 2017 than politicians in any other state by tens of thousands of dollars each year. In 2022, the most recent year of the most available comprehensive data, the John Deere PAC gave $183,500 total to 47 Illinois politicians, while the median donation for all other politicians in the country was only $15,000.

The company’s rapid technological innovations over the past decade coincided with an aggressive merger and acquisition strategy, which the federal government has said erodes competition. Deere has acquired multiple machine learning and artificial intelligence companies over the last decade and recently announced a partnership with SpaceX, all but dissolving the categorical differences between Big Tech and Big Ag.

As for its competitors, Deere’s net income surpasses its competition by the billions. The company made more in the first quarter of 2024, which ended Jan. 28, than AGCO and CLAAS combined for all of 2023.

These trends worry elected officials in the White House and around the country. In 2021, President Biden issued an executive order promoting competition and targeting repair restrictions that violate anti-trust laws. The order was supported by the Federal Trade Commission, which enforces federal consumer protection laws. In 2023, Illinois Attorney General Kwame Raoul led a coalition of attorney generals around the country urging Congress to pass right-to-repair legislation, specifically for farm equipment. And 15 states are currently considering right-to-repair bills that cover agriculture equipment, after Colorado passed the first in the country in 2023.

In the meantime, the Illinois farm bureau said it will work with the MOU.

“The MOU led by AFBF a year ago was a solid step in the right direction for an individual to perform maintenance on their own equipment,” wrote DeAnne Bloomberg, Illinois Farm Bureau’s director of issue management, in a written statement to Investigate Midwest. “In the meantime, the Illinois Farm Bureau will honor the Memorandum of Understanding signed by AFBF.”

Why groups oppose legislation

Equipment manufacturers and private business interest groups such as the Illinois Chamber of Commerce have spent the past seven years lobbying against proposed right-to-repair legislation in Illinois, according to witness slip records on the state’s General Assembly website.

They’re concerned about safety and emissions tampering, whether intentional or accidental, according to those records.

A spokesperson for the Association of Equipment Manufacturers said in a written statement to Investigate Midwest that current legislative proposals go further than what is safe and could “increase the likelihood of cybersecurity attacks on equipment…and leave equipment vulnerable to untrained or unauthorized parties looking to steal or use it for an unintended purpose.”

Mark Denzler, president of the Illinois Manufacturers Association, said that he’s not opposed to farmers repairing their equipment, he’s opposed to modifications. “You can get in and either accidentally or intentionally, for example, change coding, and suddenly you're emitting past what you're supposed to.”

Farmers, and the Environmental Protection Agency, which regulates emissions standards, say this isn’t the point of repair advocacy.

The EPA sent a letter to the National Farmers Union in August 2023 stating that the Clean Air Act and the EPA’s policies of implementing regulations are “aligned in preventing tampering, not by limiting access to independent repair, but rather by enforcing the prohibition against tampering against any party that does so.”

“We're not looking to turn our tractors into hot rods and soup them up,” said Lieb, the central Illinois corn and soybean farmer. “We need them for longevity, and when you start turning up horsepower and messing with things that they're not designed to do, inevitably, you're going to shorten the lifespan.”

‘The people calling for change are farmers’

Last October, members of the National Farmers Union, an organization representing 200,000 farmers and ranchers across the U.S., went to Capitol Hill to meet with lawmakers about the impact of what they say are monopolies in the ag sector.

Mike Stranz, vice president of advocacy at National Farmers Union, said that passing right-to-repair legislation will bring more competition, openness and transparency to the market for farm equipment repair.

“Having more choices in the marketplace and a more open repair market that drives competition makes things work better for farmers,” he said. “What big companies are pushing against is more competition — they want less.”

Farmers aren’t the only ones who depend on John Deere. The state of Illinois has paid the company $42.8 million in contracts since 2005, according to state comptroller records. The state mostly depends on John Deere machines for lawn service, trail maintenance, highway and roadside mowing.

All off-road diesel engine machines, such as construction equipment and forestry machines, have internal computers and repair restrictions similar to tractors and combines. However, the difference between a $500,000 John Deere combine and a $40,000 utility tractor for landscaping is that the software isn’t as integrated into the utility tractor and most repairs are still analog.

Farmers are concerned with repair restrictions because of the differences in the distribution models. Farmers typically own their equipment, while construction companies generally rent equipment for the duration of a project. The overhead, the budget and the time scale of farming and construction also is different, said O’Reilly, formerly with the Public Interest Research Group.

Ultimately, O’Reilly hopes that right-to-repair laws will pass across industries, including construction and forestry.

“But right now,” he said, “the people calling for change are the farmers.”

This article first appeared on Investigate Midwest and is republished here under a Creative Commons license.

Investigate Midwest is an independent, nonprofit newsroom. Its mission is to serve the public interest by exposing dangerous and costly practices of influential agricultural corporations and institutions through in-depth and data-driven investigative journalism. Visit online at www.investigatemidwest.org