Overview
(US$ Million)
| 2020 | 2021 | 2022 | 2023* (Estimated) | |
| Total Local Production | 1,211.05 | 1,244.59 | 1,299.35 | 1,319.48 |
| Total Exports | 37.72 | 39.63 | 41.61 | 42.25 |
| Total Imports | 147.98 | 153.45 | 168.79 | 162.03 |
Imports from the US
| 6.42 | 7.20 | 7.56 | 7.25 |
| Total Market Size | 1,321.01 | 1321.31 | 1,426.53 | 1,439.26 |
| Exchange Rates | 158.82 | 159.02 | 210.17 | 297.26 |
* Sources: Pakistan Economic Survey 2022-23, Ministry of Finance, Government of Pakistan
Pakistan Bureau of Statistics, Government of Pakistan
Local trade associations and market experts
Pakistan’s agriculture sector is the mainstay of the economy and a primary source of livelihood and sustainability for locals. During FY 2022-23, the agriculture sector contributed 24 percent to the country’s GDP and employed 37.4 percent of the total workforce. During the 2022-23 fiscal year, the sector saw a depressed growth of 1.55 percent against the target of 3.5 percent. According to local industry sources, the total land area under cultivation is approximately 48 million hectares, which has decreased by around 2 percent over the last year. According to industry sources, the total size of the agricultural machinery sector is approximately $1.5 billion, consisting of a combination of tractors, harvesters, irrigation equipment, and other small-scale agricultural machinery. According to the Economic Survey, agriculture machinery is one of the most important and pivotal contributors to the overall growth and sustainability of the local agriculture sector.
In terms of market share, five countries supply more than 70 percent of the total imported agricultural machinery and equipment. These include the United States, Japan, Italy, Germany, and China. The estimated U.S. market share is 30 percent.
Machinery and Equipment
Pakistan’s domestic production of tractor units decreased by approximately 46 percent from 41,871 units to 22,626 units during FY 2022-23. According to local industry experts, there exists a considerable gap in the per-acre availability of tractors and other agricultural machinery in Pakistan. There are approximately 675,000 tractor units operational in the country, resulting in the availability of approximately 0.09 horsepower (HP) per acre against the required power of 1.4 HP per acre.
Tractors produced locally are under license agreements with several foreign companies from the United States, Belarus, Turkey, and China. In addition to tractors, the United States and EU export used agricultural machinery to Pakistan, including application equipment and smart irrigation systems. The domestic industry has the indigenous capacity to produce agricultural machinery and equipment to meet only 15 percent of the country’s total requirements. Production is expected to remain contained in the current volumes over the next 3-4 years mainly due to multiple macro and micro economic factors including availability of raw materials, limited project financing options, untrained workforce, and lack of R&D facilities.
Most of the locally produced machinery is based on outdated technology and its efficiency is substantially low. A wide variety of more sophisticated equipment is imported, but local farmers prefer replacement and spare parts manufactured locally due to the relatively low cost of domestically manufactured equipment.
Leading Sub-Sectors
To better develop the agriculture sector, the Government of Pakistan, both at the federal and provincial levels, has launched several programs and incentives to modernize and expand existing capacity. These initiatives include easy and long-term credit facilities, farmer education programs, and subsidized inputs. In addition, the government through budgetary support programs offers low taxation programs on agricultural machinery to boost agricultural modernization.
The most promising agricultural machinery export prospects for FY 2024 are:
- Tractors
- Combine Harvesters
- Cultivators
- Cultipacker
- Harrow
- Subsoiler
- Rotator
- Broadcast seeder
- Planter
- Seed Driller
- Fertilizer Spreader
- Trans-planter
- Drip Irrigation Systems
- Weight Sorter
- Round Baler
- Sprayers
- Irrigation Pumps
- Pickers, Fruits, Hand, Base Metal
- Diggers, Seeders
- Sprinklers
- Cotton Gins and Parts
Opportunities
With an estimated 48 million hectares of arable land, there exists a sizeable potential for improving efficiencies, yield, and productivity of the agriculture sector with better farm equipment and machinery. The Government of Pakistan is committed to supporting this sector, with the hope that the country can increase yields and exports of primary crops, fruit and vegetables, poultry, and dairy products - and in doing so become an important supplier for the region. To achieve this objective, the government is encouraging increasing private-sector interventions, and investment by offering several direct and indirect assistance programs. Both the public and private sectors have or are in the process of taking advantage of these incentives by setting up small- to large-scale projects, strengthening marketing channels, aftersales service facilities, and training centers. According to industry experts, the local market will continue to offer sizeable business opportunities for local and foreign companies for the next several years.
Resources
Ministry of Planning Development & Special Initiatives