Pakistan Association of Automotive Parts and Accessories (Paapam) has vehemently opposed import of used tractors and said the local industry is already going through its worst ever period in terms of sales and production.
Ashraf Sheikh, chairman PAAPAM has strongly reacted to the rumours that government is mulling to allow import of five years old used tractors. "It is quite ironic that on one hand the government is discouraging import of used cars and on the other it is considering to allow the import of used tractors," he added.
Engr Azhar Ali, Vice chairman PAAPAM urged the government not to entertain such idea as it would have a negative impact on the domestic tractor industry which consisted of 300 auto parts manufacturers employing around 50,000 people directly and contributing to the treasury by paying taxes and saving foreign exchange by providing import substitution.
Mumshad Ali, former Chairman PAAPAM said that, on average the industry operated at 75% capacity in a 5 years cycle as the demand fluctuates according to yield of crops and market prices.
The industry showed growth in the last two years due to support to the farmer by the previous government in the form of fertilizer subsidy and interest free loans among other measures. In the past 10 years the industry witnessed two downturns once due to imposition of GST and then due to drop in market prices and weather impacts.
He further said that import of used tractors will not go in favour of the farmer as well, as quality of these tractors cannot be ensured and their after sales service will not be possible due to non-availability of trained staff and parts. Parts used in after sales will also have to be imported putting further pressure on Pak Rupee.
He said the spare parts produced in Pakistan are costlier due to high energy and material costs. Imported used tractors would mean after sales service issues for the farmer, loss of business and closure of tractor part manufacturing units, loss of revenue to FBR and flight of foreign exchange.
It is pertinent to mention here that Pakistan exports 3-4 thousand tractors due to its price and quality. The tractors being manufactured in Pakistan are well suited for the Pakistani agriculture needs and price.
Industry experts also commented that due to the import of used combine harvesters this industry also couldn't develop and import of used tractors will be a step in the wrong direction in every respect.