Page 34 - CMA Journal (Jan-Feb 2026)

Focus Section

Leveraging Blockchain for improving the outcomes of Subsidies

- Khushal Kissan Targeted Fertilizer Subsidy Token (KK-TFST)

Co-Author
Author:
Muhammad Taha
Muhammad Hasnain
Yousaf Akmal Siddiqui
Head of Projects
Joint Director (Research)
Lucky Motor Corporation
State Bank of Pakistan (SBP)
Limited

Abstract farmers in Pakistan are micro farmers with land holdings
less than 12.5 acres, so reaching out to them through the
We propose a programmable subsidy token that allows the
conventional subsidy mechanism is very challenging.
government to allocate fertilizer subsidies to small and
micro farmers in a targeted manner, enabling them to To overcome this hurdle, the government has adopted a
redeem the coupon with authorized distributors. mechanism of diverting this subsidy to the
manufacturers, allowing them to lower the prices of
Use Case: Decentralized system for disbursement of
fertilizer products. Under the current mechanism, the
programmed tokens for fertilizer subsidy
government provides subsidized natural gas (a key
Stakeholders: GoP (Issuer), NADRA (Identity Provider), ingredient of Urea) to major fertilizer producers. As a
Land Record Authority (Verification of land holdings), result, these producers are able to sell at a lower price
Fertilizer distributor (Merchant), Farmers (Beneficiaries). than the market, allowing indirect relief to the farmers
purchasing these fertilizers. Figure 1 details the current
1. Use Case Description process of allocation.

Pakistan, being an agrarian
Figure 1: Mechanism of Fertilizer Subsidy Distribution in Pakistan
economy, depends significantly on
the performance of the agriculture
sector for socio-economic
development as well as food
security. However, the sector itself
is largely informal and faces
significant constraints. The
government has a genuine interest
in sustaining and uplifting the agriculture sector due to
varying social, economic and political interests. As a The quantum of fertilizer subsidies has gradually grown
result, the government spends a considerable portion of over time [Figure 2]
its resources every year on the sector. Most notable forms
of such subsidies are: 80 Figure 2: History of Fertilizer Subsidies in Pakistan (Billion Rs)
70
• Subsidies for Fertilizers 60
• Subsidies for Farm Mechanization 50
40
(Tractors, Solarized tubewells etc.)
30
Besides this, the government also spends considerable 20
fiscal resources on seed support and capacity building of 10 Source: NFDC, National Media
farmers through agricultural extension services. 0
Nevertheless, it is noteworthy that around 97% of the ‐10 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025
32 ICMA’s Chartered Management Accountant, Jan-Feb 2026