Major machinery companies (Case/IH, John Deere, New Holland) increasingly require their dealers to carry only one line of equipment. This is called dealer purity.

New Holland canceled a Naicam, Sask. dealer's contract because he carried Claas combines. The dealer had moved the Claas combines to a separate lot and thought he had an agreement with New Holland. Nevertheless, New Holland canceled his dealership contract "without cause."

Dealer purity increases farmers' costs. Take air seeders for example: Case/IH have their own brand; John Deere has introduced its own line; and New Holland has purchased control of Flexi-Coil. So who will sell Bourgault, Morris, and other brands? Where will farmers get parts? These questions become more serious as Case/IH and New Holland merge and many towns are left with just one or two dealers.

Friggstad, Morris, and Bourgault airseeders revolutionized seeding. These upstart companies were able to find dealers willing to handle their products. Competition between manufactures drove innovation and restrained prices. How will similar companies find dealers and markets in an ag. machinery sector dominated by two major corporations and controlled through dealer purity laws?

By restraining competition, increasing the distance farmers have to travel for parts, and impeding the entrance of new products and firms, machinery company concentration and dealer purity laws will increase farmers' costs.

The United States forbids dealer purity laws. As we move into a Case/IH/New Holland; John Deere machinery duopoly, Canada must take similar steps to foster what little competition still exists.

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