Monday, May 9, 2011

Subsidized Tractors : A necessity or extravagance ?

Foreword :
Since Pakistan's economy is still by large an agrarian economy i decided to write something related to agriculture.

Now most of you i believe have come across the recent agricultural development programs of the government.One such scheme is to provide subsidized tractors to small scale and medium scale farmers.That would have been a great step given another set of situation but in the current energy crisis its a waste of limited funds.

I know most of you would disagree with me but kindly allow me to explain. If the farmers have no electricity to run their tube wells then what good can the tractors do ? On each tractor their is a subsidy of around Rs2,00,000 . This is not a small amount considering what could have been done with it.

First of all that the same amount of funding should have been used to equip small and medium scale farms with wind turbines or solar energy systems to power their tube wells. Most farms in Pakistan do not require much energy so a small system would be well within the budget allocated as subsidy for each tractor.

Secondly this would offset the farmer's input cost by reducing his energy bills and he will then be empowered to spend the saved money on fertilizers and high quality seeds which will definitely increase the yield per crop. Indirectly the government would be the beneficiary.

Third, the energy saved by shifting these farms onto alternate sources will reduce power outages in urban and industrial areas.

As for tractors,they can be rented on a per hour basis but energy is something without which growth and production is impossible.I just hope the government comes up with such projects that would help resolve the current energy crisis in the country .

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