At the time when local tractor industry has been going through its worst ever period in terms of sales and production for last few years, the import of used tractors will prove detrimental.
Also, the import of used tractors will result in massive unemployment as the strong and sturdy tractor industry would be wiped out of the country, which is against the government’s agenda to generate employment.
In a statement on Monday, Mohammad Shahid Hussain, Chief Executive Officer Al-Ghazi Tractors Ltd, the producers of New Holland tractors in Pakistan, said that recently the government of Punjab recommended change in policy to allow duty and tax free import of up to five years old used tractors.
“This comes as a complete surprise as it’s a complete contradiction to the directions being taken by the federal government,” stated CEO Al-Ghazi tractors Mohammad Shahid Hussain.
He added that the last 4/5 months proved very bad for the local tractor industry as one of the lowest trends ever seen over the last few years has brought massive slow down, leading to considerable non utilization of capacity.
“So, the annexation of used imported tractors in Pakistan would bring many ramifications for the local tractor industry as well as for the national economy,” reasoned Shahid.
He said the negative outcome of this move will be: outflow of foreign exchange reserves on import of used tractors; local industry’s contribution to exchequer (currently at approx. Rs. 4.5 billion) will get marginalized.
Local parts manufacturing industries will be badly affected as tractor assembly involves 90% locally manufactured components; under-utilization of local resources; fading foreign investors’ trust; and prospective loss of potential or any further foreign direct investment in manufacturing sector.
And, he added, the import of used tractors would be a huge burden on our foreign exchange while the local tractors being 95 percent localized hardly use any foreign exchange.
Shahid added that tractor is a vital machine for the farmers and Pakistani tractors have proved their reliability as even 20-25 years old models are still operating in fields and this is because there is no dearth of spare parts of these tractors and excellent after sales service provided by the manufacturers throughout Pakistan.
Therefore, added Shahid, if used tractors enter the Pakistani market the issue of spares would haunt the farmers while used tractors from all over world would enter Pakistan and arranging spare parts for each of the variant would not be possible.
He said another big issue is that who will ensure the quality of imported tractors, while availability and compatibility of warranty and parts etc. would be a big concern for farmers and dealers.
All in all, he added, it would be a complete counterproductive exercise that will bring nothing but using the poor framers as a platform to experimenting completely unknown territory.
It is worth adding here that there are more than four tractor manufacturers in Pakistan, operating aggregate at less than 50% of their capacity.
“Our tractors are readily available for delivery as and when required and over a period of time have been proven reliable as one can still see as old as 20 years old tractors of our brand on farms and roads,” said Shahid.
The CEO stated that currently high quality agricultural tractors with variety of working capacity are being produced in the country with technical collaboration with renowned foreign manufacturers.
“Tractors manufactured/assembled in Pakistan are by far the most economical compared to rest of the world and this advantage will suffer instantly by making them compete with used second hand tractors,” said Shahid.
He hoped that this move will be blocked in the wider interest of the local Industry, farmers, a huge number of vendors and people employed related to this field.
Published in Daily Times, December 25th 2018.