John Schmeiser, an ag industry consultant, most recently served as Chief Operating Officer for the North American Equipment Dealers Association (NAEDA).
A colleague at the Calgary association (Canada West, now known as NAEDA Canada) office recently found a folder labeled “Dealer Purity” while cleaning out old filing cabinets. The folder contained newspaper articles, testimony, position papers, press releases and briefing notes related to the association’s involvement with this issue during the 1990s.
Looking through the material reminded me that the core of the issue was that equipment dealerships are not franchises. They are independent businesses that take on the financial risk of investing in facilities, staff and inventory to serve their local customers. Yet for decades, the major equipment manufacturers have blurred that line, enforcing so-called “dealer purity” policies that dictate which brands a dealer may or may not carry.
On paper, these purity policies may look like brand management. In reality, they limit choice, drive up costs, and undermine the independence of both dealers and their customers. Dealer purity is not good for the end user, and it is not good for the long-term health of the farm equipment industry.
A Family Story: Twice Forced to Choose
For my own family’s dealership (established by my grandfather, Charles Schmeiser in 1931 and transferred to my father, Percy Schmeiser in 1955, purity has been more than an industry issue—it has been a lived reality.
- In 1962, John Deere terminated our dealership agreement after my father took on the Cockshutt brand.
- In the early 1990s, New Holland began applying purity pressure across Canada. To preserve our New Holland agreement, we had to give up AGCO.
Both times, the decision was framed as ours. But in truth, it was not a choice. It was a forced decision, one that carried financial consequences for our business and reduced product choice for our customers.
New Holland’s Purity Push
The material in that file folder referred to two aggressive approaches OEMs took on dealer purity at the time. New Holland introduced a policy that required dealers who carried, or wanted to carry, another major OEM brand to “adequately separate” their businesses. New Holland operations had to be housed in a separate facility from the competing brand.
One example still sticks with me. In Maple Creek, Saskatchewan, the local dealer carried both New Holland and Case IH. To comply, he built two undersized facilities — side by side, separated by 50 feet. That meant duplicate overhead, additional staff and inefficiencies that ultimately burdened customers.
A few years later, FIAT acquired Case IH and merged it with New Holland to form CNH. CNH continues to operate the two brands separately but eventually dropped the strict facility-separation rule. Dealers who had complied, however, were left carrying the cost of their unnecessary investments.
John Deere & the Shortline Battle
At the same time, John Deere was applying purity pressure in Western Canada. Dealers were told privately to sever ties with shortline manufacturers like Flexi-Coil, Bourgault, Morris, and Harmon. Publicly, both in Canada and the U.S., Deere always claimed it only wanted “equal representation.” Privately, the message was clear: drop the competing short line or lose your Deere contract.
This was the overreach of purity at its worst — extending beyond mainline competition into shortline categories where Canadian manufacturers were global leaders. The result was devastating. Dealers were coerced, and many shortline manufacturers saw their distribution networks jeopardized. These companies weren’t fringe players; they were producing some of the most advanced seeding equipment in the world. Yet purity rules put their survival at risk.
The Cropper Motors Turning Point
When I began working with the dealer association Canada West, one of the first issues on my desk was New Holland’s termination of Cropper Motors, a respected Saskatchewan dealer. Their offense? They had not “adequately separated” their AGCO business.
Cropper Motors moved the competitors’ products to premises it owned across from its New Holland dealership, but that wasn’t good enough. The lower court and the court of appeal sided with New Holland. Also of note, New Holland referred the during the trial to a contract clause that allowed them to terminate a dealer “for any reason with 90 days’ notice.” The imbalance was stark: dealers were required to meet strict facility standards, carry costly overhead and comply with corporate directives, yet the OEM could walk away on a whim.
This was a turning point in Canada. The Cropper Motors case made clear that dealers had no real security in their investments. With both the John Deere and New Holland examples top of mind, governments took notice. Legislators saw how unbalanced these contracts were: on one hand, OEMs demanded compliance with purity and dealer standards; on the other, they reserved the right to terminate with little cause or warning. This unfairness helped spur the adoption of dealer protection laws in Canada — legislation designed to restore balance to the manufacturer–dealer relationship.
S&H Farm Supply vs. Bad Boy Mowers
An OEM’s direct or indirect enforcement of purity is not limited to Canadian examples; it has also been an issue in the U.S. In September 2018, Bad Boy terminated S&H Farm Supply’s dealership agreement in Missouri. One of its key justifications was that S&H had begun selling Spartan mowers, a direct competitor to Bad Boy.
S&H became an authorized Bad Boy dealer in March 2008 through an oral agreement. The agreement granted S&H an exclusive “protected territory” around its stores — allegedly a 30–35-mile radius measured “as the crow flies.” Yet between 2016 and 2018, Bad Boy approved 10 additional dealerships within that radius. As S&H’s Bad Boy sales dropped, they felt compelled to take on Spartan to stay competitive.
Bad Boy pointed to this decision as a major reason for termination, arguing that S&H’s dual-line arrangement undermined its role as a committed Bad Boy dealer. The litigation revealed otherwise. The courts ultimately ruled that Bad Boy did not have “good cause” under Missouri’s Outdoor Power Equipment Statute, upholding S&H’s rights as a dealer.
Government Intervention
In 1986, President Ronald Reagan famously said, “The nine most terrifying words in the English language are: ‘I’m from the government, and I’m here to help.’” He was speaking about the dangers of overreach. Yet in these cases, legislation was not viewed as overreach but a necessary balance that dealers needed. Dealers had no choice but to turn to government for help.
Purity and one-sided termination clauses created a system that was fundamentally unfair. Dealers carried the financial risk of facilities, staff and compliance, while OEMs retained the unilateral right to terminate agreements with little warning. The Cropper Motors case laid this bare, and legislators responded. Dealer protection laws were passed in Canada’s prairie provinces to level the playing field and protect independent businesses from arbitrary and coercive practices. Similarly, Missouri law gave S&H Farm Supply the foundation for its successful litigation against Bad Boy.
Why Purity Fails Customers
Manufacturers sometimes argue that purity benefits customers by providing brand clarity and consistent service. But in practice, the opposite is true:
- Choice Shrinks: Customers want the best tools for their operations, not just what one corporate brand dictates. Purity narrows their options.
- Costs Rise: When dealers are forced into costly compliance — like building two facilities instead of one — those costs flow directly to customers.
- Innovation Suffers: Shortline manufacturers, often local innovators, are squeezed out. Customers lose access to cutting-edge technology.
- Local Businesses Weaken: Independent dealers thrive when they can serve their markets flexibly. Purity undermines that independence.
Purity is a policy of control. It benefits manufacturers, not customers, dealers, or the broader industry.
Dealers Are Not Franchisees
The heart of the problem is a misunderstanding of the dealer–manufacturer relationship. A McDonald’s franchisee follows strict corporate rules because they are running a company-owned concept. A farm equipment dealer, by contrast, tries to build its own brand, invests its own capital, takes on the business risk and serves its local community independently.
Yet purity policies treat dealers as though they are franchises — mere extensions of the corporate brand. That erodes trust and damages the long-term partnership between manufacturers and their independent dealer networks.
Additionally, dealers who have a sales and service agreement are more at the mercy of the OEM’s definition of what their trade territory should be. Even though dealers may have an agreement that they have a designed area of responsibility (that may or not be protected), OEMs have control on changing the area in question or adding other dealers in that territory.
3 Lessons from the Past
The Deere anti-shortline campaigns, New Holland’s treatment of Cropper Motors, and the Bad Boy–S&H case offer 3 clear lessons for today’s industry:
- Corporate Policies Change Overnight: Leadership within the OEM can change and so can major policies. Dealers who comply bear long-term costs, even when policies are later abandoned.
- Coercion Creates Resentment, Not Loyalty: A dealer forced into purity is not a stronger partner. They can feel like they are a hostage.
- Legislation Matters: The Cropper Motors case showed governments that purity and unilateral termination powers were serious enough to warrant intervention. Without protective laws, dealers would remain vulnerable, and customers would lose out. The Eighth Circuit ruling in January 2022 affirmed that S&H’s oral agreement with Bad Boy was enforceable and that termination lacked “good cause” under Missouri law.
The Role of Associations & Advocacy
When one dealer is pressured by a multinational manufacturer, the power imbalance is extreme. That is why associations exist — to give dealers a collective voice.
In the late 1990s, our association had to push back against Deere’s purity threats. Later, in the wake of Cropper Motors, we worked with governments to ensure new protections for dealers were written into law. Those actions protected short line manufacturers, safeguarded dealer independence, and ensured farmers and customers retained choice.
Looking Ahead: Independence Must Prevail
When my family’s dealership contract with John Deere was terminated in the 1960s, my dad, like any other dealer at the time, had options of other mainline products to sell. But that was then. If a dealer’s mainline contract is terminated today, the dealers’ options are limited.
We are in a new era. Dealers have made significant investments in their brand and relationship with their major OEM. The farm equipment industry is changing rapidly. Farms are consolidating, machinery is more complex and expensive, and dealership ownership networks continue to shrink. In this environment, the temptation for manufacturers to reassert purity will only grow stronger.
But we cannot allow the mistakes of the past to repeat themselves. Dealer purity weakens local businesses, limits customer choice and stifles innovation. It is time to leave purity policies behind.
Dealers must remain independent businesses who are free to choose the products that best serve their markets. Customers must have access to the tools that fit their operations — not just the tools one manufacturer decides to allow. And manufacturers, if they value long-term dealer relationships, must treat dealers as true partners rather than franchisees.
Purity belongs in the past. Independence, choice and respect must define the future.
