Tractor sales rise as subsidy hope fades in Pakistan

PTI govt focused on locust in budget with no clarity on tractor subsidy

LAHORE: Tractor sales are gradually picking up as farmers, who have been waiting for a reduction in tractor prices following the announcement of a subsidy by the Economic Coordination Committee (ECC) last month, have started buying as no notification has been issued so far.

According to details provided by industry stakeholders, a subsidy of Rs2.5 billion on sales tax on locally manufactured tractors was announced under the Rs50-billion agricultural package. It hampered sales of tractors and the industry sold only 1,843 units in May 2020 as compared to 3,599 units in the same month of previous year as many farmers, who were willing to purchase tractors for planting new crops, awaited clarity.

However, in the federal budget, the government focused on providing subsidy on fertiliser and preventing farmers from locust attack, and there was no clarity on the announced tractor subsidy.

“It seems the government is more focused on fighting locust and due to the limitation of funds, the tractor subsidy has been put on hold,” said an industry source.

A tractor dealer in Hyderabad, Mohammad Waqas, said sales of tractors remained stagnant last month as buyers were anticipating a price reduction. However, no notification had so far been issued and farmers lost hope in the reduction in tractor prices, he added. 

Published in The Express Tribune, June 25^th, 2020.

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