By Ayesha Mudassar ISLAMABAD, April 11 (INP-WealthPK): The sales of farm tractors across almost all categories jumped in the first eight months of the current fiscal year 2021-22 thanks to a sales tax subsidy offered by the government on locally-manufactured tractors to boost mechanisation and per-acre crop output in the agriculture sector. The tractor industry is one of Pakistan’s most advantageous export-oriented industries. According to the Pakistan Automotive Manufacturers Association (PAMA), total tractor sales grew to 33,498 units in 8MFY22, up from 31,576 units in 8MFY21. However, February sales fell to 2,002 units, down from 5,640 units in January 2022, reports WealthPK. The sales of categories such as Fiat and Massey Ferguson showed an increasing trend in 8MFY22 compared with the corresponding period of last year. The statistical information of PAMA shows a mixed production and sales trend of tractors for the last five fiscal years.

	Production and Sales data of Farm Tractors
	2016-17	2017-18	2018-19	2019-20	2020-21
Production	53,975	71,894	49,902	32,608	50,751
Sales	54,992	70,887	50,405	32,727	50,920

PAMA: Historic Information Similarly, the assembling of domestic farm tractors increased to 32,585 units in seven months of the current fiscal year (7MFY22) compared to 26,848 units in 7MFY21, indicating an increase of 21.4%, according to the data of large-scale manufacturing industries released by Pakistan Bureau of Statistics. Taking into consideration the month-on-month situation, the registered local production of tractors was about 5,640 units in January 2022 as compared to 4,911 units in December 2021, according to WealthPK. The global market for agricultural tractors was worth $60.4 billion in 2020 and is estimated to reach $81.9 billion by 2026, representing a compound annual growth rate of 5.2% over the projected period. Pakistan produces tractors in technical collaboration with foreign manufacturers, including New Holland Tractors and Massey Ferguson. The recently announced Auto Industry Development and Export Policy 2021-26 aims to provide incentives for the introduction of new models of agricultural tractors. The local tractor industry contributes significantly to promoting the development of the agriculture sector and strengthening the national economy. Massey Ferguson and Al-Ghazi are the two biggest agricultural tractor manufacturers in the country, with 60% and 40% market share, respectively. The tractor industry employs more than 250,000 people. Pakistan mainly exports tractors to eastern European countries and South Africa.

Sector	Localization Level Achieved		Top 10 Localized Parts
Tractors	Number of Parts	Value of Parts	Engine Valves, Engine Block, Starter Motor, Body Parts, Transmission, Crankshaft, Piston, Connecting rod,
	92%	80%

Precision farming, the increased adoption of farm technology to boost production, and the agricultural fiscal package (Rs1.5 billion sales tax subsidy) are all driving up demand for tractors, according to WealthPK.