Cabinet snubs MoNFS&R for levelling accusation against local tractor makers

ISLAMABAD: The Federal Cabinet has snubbed Ministry of National Food Security and Research (MoNFS&R) for accusing local tractor manufacturers of creating a monopoly and failing to comply with deletion programme.

On October 27, 2021, MoNFS&R made a presentation to the Cabinet on "Plan to improve the agriculture/ farm mechanisation and to overcome monopolies" during which it was told that 48 percent farmers have tractors in Pakistan as compared to 48 percent in India, whereas 17 percent have diesel in engines in both countries.

In Pakistan electric motors are 11 percent against 22 percent in India whereas draught animals are 2 percent in Pakistan as compared to 7 percent of India. Human labour is 4 percent in Pakistan against 5 percent in India.

Cabinet was informed that 64 percent farmers have less than 5 acres whereas 89 percent have less than 12 acres of land. The issue is inappropriate horsepower of available tractor models between the range of 50-85 hp with only two main local tractors manufacturers having a monopoly in the market at a high price and low quality.

The Ministry sought policy interventions to ensure local tractor industry to manufacture wider range (20-120 hp) of tractors and suggested import of suitable tractors by giving incentives in duties and subsidised loans as well as provision of incentives to other tractor manufacturers to start tractor production in Pakistan.

On issue of quality of farm implements and no regulatory framework for monitoring, the Cabinet was informed that quality standards would be notified keeping in view local situation and international requirements and it was suggested that a monitoring agency should have a robust mechanism to carry out proper implementation.

It was also suggested to incentivise import of precision agriculture implements by cutting duties and taxes, provide subsidised loans to establish manufacturing units, especially by giving designated areas in the special economic zones, incentivise establishment of service providers with high end machinery, and compelling R&D institutes and universities to conduct research.

Technical vocational institutes both private and government must introduce training modules for these precision implements for operators and mechanic.

During discussion, the members did not agree to the viewpoint of National Food Security & Research Division that local tractor manufacturers were monopolies, which had failed to comply with the deletion programme and were still primarily assembling tractors.

Cabinet members argued that prices of indigenously manufactured tractors were internationally competitive, enabling the industry to export to Africa. The issue of limited horsepower range could, however, be addressed by allowing import of tractors of horsepower strength not being locally produced.

The proposal to subsidise import of tractors was opposed by the Adviser to the Prime Minister on Finance & Revenue as loans to the small farmers for purchase of tractors was included in the Kamyab Pakistan programme.

Copyright Business Recorder, 2021