The government has shelved plans to import about 10,000 tractors under the Benazir Tractor Scheme (BTS) and decided that only locally made tractors would be provided to the farmers at subsidised rates under this scheme. This was stated by Federal Minister for Industries and Production Manzoor Ahmad Wattoo while talking to vice president PAPAAM Tariq Nazir during a meeting in Islamabad.
It may be recalled that the government had approved provision of 20,000 tractors on subsidised rates to facilitate the poor farmers and increase the pace of the mechanisation of agriculture to boost production.
The government had further approved that the tractors to be provided to farmers under the said scheme shall comprise a combination from locally produced and imported tractors as per farmers' choice coupled with availability of domestic production line. The government had allocated Rs 4 billion to share up to 50 percent cost of a tractor subject to a maximum of Rs 200,000 per beneficiary.
The local manufacturers of tractors, spare parts and the vendors across the country had vehemently opposed the import of tractors as it would badly hit the local automobile industries and deprive thousands of people of their jobs. A representative delegation of the automobile industries led by Tariq Nazir had met the Minister for Industries and Production the other day to brief him about the problems of the automobile industry with regard to the import of tractors and the used cars.
PAPAAM (Pakistan Automotive Parts Manufacturers Association) media manager said here on Thursday that the Federal Minister for Industries accepted the automobile industry's demand and shelved the plan to import tractors under BTS. He also said that the import of vehicles older than ten years would not be allowed in the country and the policy in this regard would continue in the forthcoming budget."
The Minister also hinted at reviewing the decision of recently imposed 15 percent regulatory duty on steel products because there are fears that the duty would put a very negative impact on the auto industry besides jacking up the prices of vehicles.
The Vice Chairman Pakistan Automotive Parts Manufacturers Association (PAPAAM) informed the Federal Minister that the local industry has the capacity to meet domestic demand so there was no point in importing tractors. He said that besides the fact that the local vending industry was highly developed and modernised, it was also ensuring spare parts, service and repair facilities to the farmers at their door steps.
Auto industry experts say that Pakistan produced 53,470 tractors in 2007-08 and the two main tractor manufacturers of the country are on target to roll out 60,000 tractors this fiscal year. They said during July 2008 and March 2009 period the industry has produced 42,220 tractors and is set to add another 18,000 units by the end of June this year.
They say the tractor demand is likely to stabilise at 55,000 to 60,000 units in the short-term and further growth would come if the agricultural economy continues to grow at a fast pace. The experts said that the government's decision not to import tractors under any scheme would send a positive signal for further expansion of production capacities of the tractor manufacturers and the vendors.