High tractor cost adds to farmers’ woes

Tractor prices surge in range of 35-45% year-on-year

KARACHI:

The rising cost of tractors and other machinery is placing an increasing financial burden on farmers as well as threatening their economic viability.

The productivity of a farm is directly linked to the quality and efficiency of agricultural machinery. On the other hand, the cost of production surges if prices of tractors and machinery rise exorbitantly.

It is putting an extra financial burden on the already struggling flood-stricken farmers, who are facing challenges due to high prices of quality seeds, fertiliser and pesticides.

“Adding to the miseries of farmers is high tractor prices that have surged 35-45% year-on-year, based on their make, which has impacted sales of tractors as well,” remarked auto sector analyst Arsalan Hanif.

Tractors should be available at affordable prices, emphasised Pakistan Businesses Forum (PBF) Vice President Ahmad Jawad. “The monopoly of two major manufacturers is a shame for the agriculture sector while the tractor makers lack better technology.”

Before cultivation and after harvesting, the demand for tractors shoots up but an “artificial shortage is allegedly being created. Interestingly, the average delivery time is three months despite 100% advance payment,” said the PBF vice president.

A price increase by the market leader followed by the second biggest manufacturer indicated the likelihood of collusion in the tractor industry, said Jawad.

With the hike in tractor prices amid high energy costs, it would be impossible for farmers to adopt modern engineering technology and reap its benefits throughout the production cycle, he pointed out.

“Higher prices of agro-machinery including tractors will have a drastic impact on farmers,” warned Concave Agri Services President Muhammad Ali Iqbal.

“Machinery utilisation per hectare in Pakistan is one of the lowest at 0.5 horsepower (HP) whereas in India it is 1.5 HP,” said Sindh Abadgar Board SVP Mahmood Nawaz Shah.

In the first week of February, tractor prices jumped by 18-22%, revealed JS Global auto analyst Wasil Zaman. As a result, demand for tractors fell in rural areas.

“Farmers can’t even buy crop seeds and fertiliser,” said Sindh Chamber of Agriculture President Miran Mohammed Shah. “Buying equipment is only a dream.”

Published in The Express Tribune, March 2^nd, 2023.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.