KARACHI: Overall tractor sales remained brisk during the first quarter of current fiscal year rising to 9,363 units from 5,059 units in same period last year.

Sales of Massey Ferguson and Fiat tractors rose to 6,086 and 3,184 units from 3,281 and 1,714 units while sales of Orient IMT tractor went up to 93 from 64 units, data of Pakistan Automotive Manufacturers Association (Pama) revealed.

Overall production of farm machinery has almost doubled in July-September 2014-15 to 11,896 units as compared to 6,419 units in same period last fiscal year.

Muhammad Tahir Saeed of Topline Securities attributed rising sales of tractors to government support and improving rural economy.

After falling in last few years, he expected tractor sales to grow by 37pc in FY15 and 10pc in FY16.

In federal budget FY15, the government announced reduction in General Sales Tax (GST) from 16 to 10pc and increased agri-credit loan target from Rs380 billion to Rs500bn. Both these measures will provide the much needed growth in tractors sales, he added.

Agriculture makes 20pc of Pakistan’s GDP. Consistent increase in commodity support prices (wheat support price doubled in last five years), rising farmers’ education on using modern techniques and booming remittances (up 166pc in last five years) have improved buying power of farmers.

As rising population base and inheritance has resulted in lesser available crop area per person, farmers are more concerned on improving yields. In this attempt, farmers are relying more on fertilisers, pesticides and modern equipments. Higher agri-credit, mainly from Zarai Taraqiati bank, and rising remittances would also help in rising tractors sales in addition to lower GST and supportive government policies, the analyst said.

Published in Dawn, November 1st, 2014