LAHORE, April 12: Farmers on Monday pointed out a growing gap between demand and supply of tractors in the aftermath of recent steel crisis and dealers' propensity to mint money out of shortage.
"Of late, there has been severe shortage of tractors because of the wheat harvesting season and recent hike in prices of steel used in tractor making and their spares," says an official of Agriculture Chamber, a farmers' body.
This is a crucial time for agriculture in the country because of wheat harvesting and coming sowing of cotton, he said. The growing gap between demand and supply has resulted in delayed delivery of tractors to farmers who claim to have paid in advance.
"It is not only the supply problem, dealers' lust for money has also worsened the situation," claims another farmer from central Punjab who is yet to get his delivery. Dealers of all major manufacturers are selling tractors on the black market and making around Rs40,000 to 50,000 per vehicle, he lamented.
The manufacturers who acknowledge their inability to meet ever-growing demand of farmers blame the steel crisis for the "supply chaos". The employee a local tractors' manufacturer said they would not be able to make deliveries in time for another two to three months. "Delayed supply of various parts has played havoc with the tractor industry," he said.
Meanwhile, demand for tractors has increased significantly this year because of easy availability of credit at cheap rates. Interest rate has come down to two to three per cent for big loans and to nine per cent for farmers.
About the black marketeering of tractors, a manufacturer said that they should not be held responsible for the sins of the dealers. "The government should move in to check the black market as we have hardly any control over them."
A market analyst said manufacturers had a capacity to produce around 35,000 tractors a year against a demand of around 45,000. "The gap will naturally create chaos."
He said that sales and production of tractors had increased by 50 per cent each in July-September 2003-04 fiscal as compared to the first quarter of the last year.
Giving the demand and supply fluctuation, experts said the demand had risen only recently. They recalled that 31,622 tractors were manufactured in 1983-84 and 31,246 in 1984-85.
In the next few years, production dropped to as low as 10,417 in 1996-97. But it picked up lately as credit became easily available and that, too, at cheap rates. In 2001-02, 35,038 tractors were manufactured.
Reacting to the situation, Farmers Associates Pakistan's Hamid Malhi castigated government for not taking appropriate steps to check the looming crisis. Punjab Agriculture Minister Arshad Lodhi, however, expressed his determination to control the crisis.
A meeting of manufacturers and dealers would be called in the next few days to assess the situation and take whatever measures were needed for retrieving it, he said.
