Lahore - As the Punjab green tractor scheme has been abandoned on the excuse of funds shortage, the tractor vending industry has asked the provincial government to officially announce the dropping of the scheme so that the farmers, who are awaiting the scheme, should proceed with their purchases and tractor industry could start its production again.

The Punjab finance minister Dr Ayesha Pasha also confirmed the shelving of the green tractor scheme during a meeting with PAAPAM delegation, who had inquired about government intention regarding the launch of green tractor scheme.

Soon after the announcement of the provincial tractor subsidy schemes, local tractor assemblers and their associated suppliers made preparations for gearing up of their productions to meet the impending demand.

As the buying season approaches there is still no news from both the provincial governments on the time line for launching of the schemes nor on the amount of subsidy per tractor and the number of tractor units that will be subsidized. Tractor yards of the main tractors assemblers of the country are brimming with tractors to meet this demand, while the cash starved farmers await the launch of the scheme so that they can apply for tractors through these schemes. The assemblers are now considering stopping production until they clear their stocks which means no orders for 100s of units associated with tractor parts production in the country.

‘Such delays and last minute changes to subsidy per tractor, and number of tractors to be subsidized are common and have resulted in severely affecting the supply chain in the past also”, commented PAAPAM chairman Mumshad Ali.

He said that the delegation gave a detailed presentation to appraise the finance minister about the problems of sales drop being created by delay in the launch of the tractor scheme. The delegation also highlighted the problems with the current model of scheme, mainly its timing of launch, lag between announcement and actual launch, difference between announced subsidy value and actual subsidy, difference between announced number of tractors to be subsidized,  and actual number subsidized, the phenomena of under selling of subsidized tractor in the market, limited number of beneficiaries due to low number of tractor being subsidized, short term and intermittent schemes resulting in boom and bust production cycle.

The delegation recommended to the Minister to change the short term tractor subsidy scheme to a long term plan to reduce the shortage of tractors in the province by using provincial grant for reduced mark up loans of 3 years as is the case with the provincial taxi schemes. This scheme should be run for 5 years at least with a plan to increase the horse power per hectare to match that of Indian Punjab.

He also added that as part of the tractor supply chain they are never taken into confidence before the launch of such schemes. There is still room to improve the model of the scheme to match supply and demand. These schemes are always welcomed by the industry, but if modified can double its affect on the agri economy and tractor industry alike. The government should take the industry on board before making decisions that have a tremendous affect on the industry. The governments should look at the supply side, alongside the demand side.