Agronomists and experts of agro-based industries have stressed the need of urgent farm mechanization to boost the agriculture sector as Pakistan's per hectare use of horsepower and yields of crops is much lower vis-à-vis the global benchmarks.
Pakistan's per hectare use of horsepower is 1.50, India's 2.50, China's 3.88 and Japan's 7.0 whereas sugar cane yield is 40% lower, wheat & cotton yields are 20% lower, non-basmati rice is 40% lower and milk yield per animal is 90% lower against the global benchmark. Pakistan's agriculture sector also faces over 40-80% post harvest losses, if compared with global standards.
Sharing their data and studies with Business Recorder here on Monday, agronomists and industry analysts said that agriculture being the backbone of Pakistan's economy contributes 21.4% to GDP, employs 45% of the country's labour force and provides food security to the nation and raw material for various industries. The growth in the agriculture sector not only stimulates domestic demand for industrial goods and other services but also a key support in foreign exchange earnings, as share of food and cotton based items in our exports is 20% and 53%, respectively.
They said considering the current paradoxical economic situation of the country, particularly the energy crisis, as well as other internal and external challenges, dependency on this sector will further increase to improve the pace of national growth. Therefore, immediate attention is required to accelerate productivity and profitability of this sector both in vertical and horizontal directions.
"Moreover, urbanisation is decreasing the current area under cultivation and water scarcity does not allow bringing new lands under cultivation from the available cultivable waste (8.31 million hectares). As per the economic survey 2012-13, the current area under cultivation is 22.04 million hectares as against 22.27 million hectares in 2002-03."
To meet these challenges Pakistan would have to adopt latest technologies; increased availability and efficient use of biological, chemical and hydrological inputs; whereas the role of mechanization would be pivotal in all farm operations starting from field preparation to crop harvesting and storage.
In this respect, the role of the local tractor industry needs review by all stakeholders, particularly by the government, to further amplify its role. So far, the industry performance has been quite satisfactory as it is the only agriculture input, wherein the country is not only self-sufficient but due to its global competitiveness in quality and prices, it is also earning foreign exchange through export of tractors and spares.
The industry has increased its production capacity to about 70,000 units per annum and offers a wide range of models from 50-100 hp to cover the entire spectrum of local customers as per their need and affordability. Presently, tractors being produced in Pakistan are the cheapest in the world (Pakistan $130 per HP, India $200 per HP, China $150 and Japan $900 Per HP) and 90%self-reliance in production of indigenous built tractors has been achieved over a period of five decades. The tractor manufacturers played a pivotal role in the transfer of technology and transformation of the fledging local light engineering sector into a robust, vibrant, quality conscious Auto Vending Industry, which comprises more than 350 units. These vendors besides being helpful to the local tractor industry are also vital to the entire automobile sector and even to the defence industry of Pakistan. The industry and associated vendors are also supporting the national economy by paying taxes and duties to the tune of PKR 4.5 billion per annum, exporting tractors, implements and spares worth USD 100 million and providing job opportunities for 500,000 people.
The tractor industry in Pakistan does not enjoy any tariff protection as CBU tractors can be imported at zero taxes/duties. Despite this, the imported tractors are unable to match the quality, price and after sales service and facilities offered by local tractor industry to its clients. Tractor importers have, therefore, not been able to achieve any success or provide better options.
They said that currently the impact of 10% GST translates into an increase in tractor prices from PKR 60,000 to PKR 100,000 which has significantly hampered the farm mechanization and dropped the production of tractors and farm machinery. They warned that the impact would be further aggravated in January 2014 as the GST will increase from 10% to 17% resulting into further drop of 40,000 per annum tractor sales and yields of crops threatening food insecurity and social upheavals.