PAAPAM Rejects ECC’s Decision To Import Second Hand Tractors
The move is completely ill-advised and dangerous, as it would be another nail in the coffin of Pakistan’s local auto parts and engineering industries.
The Pakistan Association of Autoparts and Accessories Manufacturers (PAAPAM) has vehemently opposed the Economic Coordination Committee’s (ECC) decision to import second hand tractors.
The move, according to the association, is completely ill-advised and dangerous, as it would be another nail in the coffin of Pakistan’s local auto parts and engineering industries.
In a joint statement issued here on Saturday, PAAPAM’s Chairman Munir K. Bana, Senior Vice Chairman Usman Aslam Malik, and Vice Chairman Taufiq Sherwani observed that this move has become the last measure to sink the ship of the local industry.
They said that the members of PAAPAM were looking forward to innovations and initiatives to revive the tractor industry, but this decision has shocked them beyond measure.
The auto industry is under attack on all fronts. On the one hand, the government was not allowing raw material imports due to depleting foreign currency reserves, but on the other hand, it was planning to drain these reserves recklessly by importing junk second-hand tractors.
Needless to say, current tractor production is already on hold, but with the opening of imports, over a million more jobs will be lost in the country’s engineering industries.
According to an auto parts industry spokesman, the government’s decision to allow second-hand tractors will be of no benefit to farmers because imported second-hand tractors are expected to be more expensive than locally produced new tractors, given the fact that Pakistan produces the cheapest tractors in the world.
Furthermore, the tractor market is currently not facing any supply issues as the industry is running far below its capacity due to the economic downturn. Both tractor manufacturers had recently suspended their operations due to reduced demand, impacting hundreds of parts makers who were supplying kits to them.
Most importantly, there would be no mechanics or spare parts for imported tractors available locally to service them. Secondhand imported tractors would also increase farmers’ fuel bills, as old imported machines cannot be expected to be fuel efficient.
According to PAAPAM, the ailing vendor industry was already on life support and could not afford such rash decisions by the ECC. PAAPAM demanded that the government reverse the decision as soon as possible because it would be the worst disaster for the country’s tractor industry.
Around 300 tractor parts manufacturing SMEs are currently closed due to a near-complete drop in tractor demand and a severe cash crunch caused by the FBR’s suspension of verified GST refunds to tractor assemblers.
Munir Bana went on to say that currently 100,000 workers in the tractor parts industry, primarily in the Punjab and Sind regions, are out of work and that the government must act quickly to save this local industry, which feeds Pakistan’s agricultural economy, which has already been devastated by recent floods.
PAAPAM advised the government to reconsider its decision to import used tractors in light of the current threat of food insecurity, which was looming over our heads with disastrous consequences, and that we must act quickly to avert it.