ISLAMABAD – Tractor and other agriculture machinery sector is facing severe crisis in Pakistan as sales plunged to 22-year low in the fiscal year 2024–25 (FY25).
Latest data shows only 29,192 tractors were sold last year, showing the lowest sales figure in decades. The alarming drop comes amid consistent decline over recent years amid persistent economic and agricultural sector challenges.
The peak of tractor sales was recorded in FY11, with 71,512 units sold, after years of steady growth. However, since then, the market has shown volatile trends, with steep dips notably in FY16, FY19, FY23, and now FY25.
Those familiar with pattern link drop to several factors including surge Rising production costs and inflation. Soaring interest rates and limited access to agricultural credit. Persistent economic uncertainty and policy instability, an decline in farmer purchasing power due to poor crop yields and climate challenges added to woes.
Agricultural experts and industry stakeholders are urging government to introduce urgent reforms and subsidy support to rejuvenate rural mechanization and prevent further contraction in this vital sector.
Without state intervention, stakeholders warn that this downward trend could further impact agricultural productivity and food security in the country.
Pakistan Association of Automotive Parts and Accessories Manufacturers (Paapam) earlier warned that the country’s tractor industry is on the verge of collapse due to delays in processing GST refunds and complications arising from SRO 563.
The tax regulation limits refunds to verified farmer buyers, but a lack of a clear verification mechanism has resulted in billions of rupees being withheld.
This has caused a severe cash flow crisis across the supply chain, forcing over 250 suppliers to halt operations and putting major assemblers like Millat and Al-Ghazi at risk of shutting down.
