NSW Farmers has welcomed an examination of the agricultural machinery market by Australia’s competition watchdog has found more independent competition would benefit farmers when it comes to equipment sales, repairs and servicing.
The ACCC released its full report into the inquiry earlier this month and it can be found here. In February it asked for submissions from a wide range of sources, including farmers, about issues they had been having when it came to farm machinery repairs.
Farm machinery: Data and software issues
Data and the diagnostic software tools that control modern tractors, harvesters and other farm machinery proved to be the biggest bugbear as independent repairers are unable to access this software and thereby conduct repairs.
NSW Farmers wants healthy competition in the ag machinery and after-sales market to provide a genuine choice to farmers and enable them to use their local independent repairer if they wish
The report also found that restricted access to software tools, technical information, and service manuals and parts held by manufacturers is limiting competition in repair markets. Warranties were also found to limit competition by discouraging the use of independent repairers.
More competition needed: ACCC
The ACCC’s Deputy Chair, Mick Keogh, said the problem is not just happening in Australia, with farmers in other countries also reporting similar concerns.
“Competition in after-sales markets would be improved if independent repairers had access to software, tools and parts on fair and reasonable commercial terms. This is an important issue that runs across a number of industries, both in Australia and overseas,” Mr Keogh said.
In response to this finding, the ACCC recommended that agricultural machinery be considered for future inclusion in the motor vehicle service and repair information sharing scheme.
The competition body also recommended that agricultural machinery be included in any broader ‘right to repair’ scheme introduced in Australia. This should include granting access to diagnostic software tools and parts to independent repairers on commercially reasonable terms. It also includes having sufficient parts readily available in Australia.
Farm machinery, and limitations of warranty systems
The ACCC also found that many warranties have significant limitations, including their short duration which can often be limited to one or two years.
“The survey we conducted showed that purchasers often don’t understand the terms of warranties when they buy agricultural machinery, which involves a significant investment,” Mr Keogh said.
Based on this Mr Keogh said the ACCC also made recommendations about the information that manufacturers should provide to purchasers about warranties, dispute resolution, and issues such as data rights and use.
Background to the investigation
In February 2020, the ACCC released a discussion paper focussing on concerns about manufacturer warranties and the servicing and repair of agricultural machinery, along with an online survey seeking farmers’ feedback about their experiences.
The ACCC sought information from a wide range of sources to inform the report. As this was a self-initiated market study, the ACCC did not have powers to compel information from parties. However, the ACCC received 44 submissions and 335 survey responses as part of this study.
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