PAAPAM raises concerns over Green Tractor Scheme, warns of job losses, industry instability

The Pakistan Association of Automotive Parts & Accessories Manufacturers (PAAPAM) has expressed concerns over the Green Tractor Scheme, stating that it is destabilising the tractor parts industry and jeopardising thousands of jobs. 

As per media reports, PAAPAM Chairman Usman Aslam Malik pointed out that the sector is a vital contributor to the economy, with more than 250 small and medium-sized engineering units in Punjab directly employing over 35,000 skilled workers, and more than 300,000 people employed indirectly. Local manufacturers supply over 900 of the more than 1,000 components required for tractor assembly, which is critical for Pakistan’s agro-economy. 

However, he said that the scheme’s subsidy model has caused a sharp decline in industry volumes, with tractor sales hitting a decade-low.

The Green Tractor Scheme, announced in May and launched in October 2024, did not align with the usual sales cycle of tractors. As a result, many farmers delayed their purchases, expecting a subsidy of Rs1 million per unit. This delay led to a significant reduction in tractor sales during the Kharif season. 

The government’s decision to scale back the scheme from 30,000 to 10,000 tractors further destabilised the market. Additionally, delays in the disbursement of funds to assemblers compounded cash flow issues. 

The uncertainty surrounding the continuation of subsidies has made farmers hesitant to buy tractors, which has further impacted sales.

Malik criticised the reliance on politically motivated, short-term subsidies, stating that they have caused more harm than benefit to the industry.