Page 36 - CMA Journal (Jan-Feb 2026)

Focus Section

c) Corruption, Misuse, Hoarding: Middlemen play an 5. System Design and Stakeholders
important role in the process. They effectively
The proposed design uses a Consortium Blockchain
manage the supply of fertilizers. Discounted fertilizer
(controlled by the Government/Regulator) to ensure
creates an incentive for these dealers to hoard
transparency while maintaining control.
supply and create shortages, limiting farmers’ access
to subsidized fertilizers. A. Key Players
d) Mismanagement and Misalignment of • Issuer (Government): Mints tokens representing
Administration: Involvement of multiple the subsidy value.
stakeholders generates competing interests, leading
• Smart Contracts: Programmable rules that prevent
not only to undue delays but also to incoherence in
misuse (e.g., "Token valid only for registered
subsidy implementation.
subsistence farmers").
e) No Trace and Track for Performance Evaluation:
• The Token (Asset): A wrapped asset representing 1
Due to the indirect nature of this subsidy, no credible
bag of subsidized urea.
data is available for the government to conduct
thorough performance reviews or implement • Users: Farmers (Beneficiaries), Dealers (Points of
improvements in subsequent iterations. [Figure 3] Sale), Manufacturers (Redeemers).
provides a summary of these issues.
B. Operational Structure
Figure 3: Problems and Misuse of Fertilizer Subsidy • Khushal Kissan App: Linked to Digital ID (CNIC) and
Land Record Department to verify agricultural
landholdings. The app allows farmers to open a
wallet account; if the CNIC is valid and landholdings
are less than 12.5 acres, they receive subsidy tokens
directly from the government.

• Kissan Dost App: An app for dealers to scan the
farmer's token and release the physical fertilizer.
Dealers can redeem these tokens with the
government by sending them to the burner wallet,
which triggers payment to the dealer’s bank or
mobile account.
• Government Admin Dashboard: Provides a real-time
4. Our Proposed Solution: view of token minting, distribution, and redemption.
Fertilizer Subsidy Token C. Logical Structure (Smart Contract)
Our Fertilizer Subsidy Token (Khushal Kissan Targeted • Eligibility Contract: Checks if the recipient is a
Fertilizer Subsidy Token or KK-TFST) offers a solution to "subsistence farmer" by verifying:
this problem by using smart contracts built on sovereign
or private money or tokens, allowing small farmers to - CNIC is valid
receive subsidized fertilizer directly from sellers. Our - Land holdings are less than 12.5 acres
proposed solution offers the following benefits: • Supply Chain Contract: Tracks the movement of the
a) Targeted Design: KK-TFST provides a more targeted physical bag versus the digital token.
subsidy, ensuring intended beneficiaries directly • Settlement Contract: Automatically reimburses
receive the benefits. dealers once the token is redeemed.
b) Market Based: Removing subsidized gas supply to D. Blockchain System
fertilizer companies would eliminate market
distortions. • Distributed Ledger Technology: Records every
transaction immutably.
c) Traceability: The government can generate credible
data on subsidy usage, helping improve future • Identity Node: Verifies users against the National
iterations and other subsidy programs. Database (NADRA) and land holdings (PLAs).

d) Reduced Misuse: Due to programmability, token • Eligibility Contract: Checks if the recipient is a
misuse is limited, allowing optimal use of limited "subsistence farmer."
fiscal resources.
34 ICMA’s Chartered Management Accountant, Jan-Feb 2026