Tractor schemes: Paapam urges Sindh, Punjab governments to clarify position

Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) urged the provincial governments of Punjab and Sindh to clarify position regarding the tractors schemes, announced in their Finance Bills. PAAPAM Chairman Mumshad Ali, while responding to rumours regarding shelving of tractor scheme in the wake of farmers' package has said that as part of the tractor supply chain they have never been taken into confidence before the launch of such schemes.
There is still room to improve the model of the scheme to match supply and demand. These schemes are always welcomed by the industry, but if modified can double its affect on the agri economy and tractor industry alike, he mentioned. PAAPAM Senior Vice Chairman Mashood Ali Khan also urged the Punjab and Sindh governments to take the industry on board before making decisions that have a tremendous affect on the industry.
He further said the schemes should be launched on long-term basis rather than short-term basis, keeping in view the total shortage of farm tractors in the country. He said that schemes should be based on shortage of tractors/production capacity of the industry, and should aim at maximising the net of the subsidy. In the past, only 5,000 to 10,000 tractors have been subsidised, and more farmers need to benefit from the schemes. The lag between the announcement of the scheme and its actual launch is also detrimental to this bi annual cyclic tractor industry.
The number of tractors announced in the schemes, to be subsidised were 25000 in Punjab and 29000 in Sindh. The industry geared itself up for this number, but now the rumours are that the scheme is to be scrapped all together. It is common practice in the past also that the subsidy numbers announced in the budget are exaggerated to get political mileage and later reduced and this affects the industry badly as it has a long and wide supply chain with very local content as high as 95 percent and is left with miss-planned inventory and investment. He urged the Sindh and Punjab governments to talk to the industry to improve the tractor scheme model to multiply its affect on Pakistan's economy.