The document outlines various fertilizer subsidy plans in Pakistan, including targeted subsidies, direct benefit transfers, and the implementation of a scratch card subsidy program. It highlights the complexities of reaching small farmers, the importance of accurate identification through Aadhaar numbers, and the integration of technology for tracking subsidies. Additionally, it discusses challenges such as soil health, literacy rates, and the need for long-term strategies to improve fertilizer management and farmer registration.

1. FERTLIZER SUBSIDY PLAN
DR MUHAMMAD ANJUM ALI
MEMBER PLANT SCIENCES DIVISION
PAKISTAN AGRICULTURE RESEARCH COUNCIL

2. TYPES OF FERTLIZER SUBSIDIES
• TARGETED SUBSIDY
• Fertilizer Consumers as a whole or specific segment
• Farm Size under consideration or not
• Single product or More than one
• Targeting will be economical but administratively costly and prone to
leakages.
• SUBSIDY AFTER COMPLETION OF CERTAIN PRECONDITION
• Sowing of a crop (Oilseeds, Pulses, Soybean, Orchards)
• Application according to given techniques
• Selling a set quantity of output to the state.
• Improve focus of the subsidy, but raise costs of administration and
monitoring
• RATIONING:
• Limited Quantity to each farmer on significantly reduced price.
• More of poor farmer support and less to the productivity

3. TYPES OF FERTLIZER SUBSIDIES
• LEVEL OF SUBSIDY SPECIFIED
• Certain percentage of the cost fixed but sale price variable
• Sale price fixed but subsidy price variable
• Sale price variable may leads to inflation and fixed will rise subsidy price but
reduces the predictability.
• POINT OF PROVISION OF SUBSIDY.
• Who is to pay subsidy. Manufacturers/importers, wholesalers or retail dealers,
or directly given to farmers
• Subsidy at import or manufacturer implies administrative savings but with the
danger that the subsidy will not be fully passed on to farmers.
• Providing farmers direct subsidy ensures that the subsidy goes to the
beneficiaries
• Hundreds of thousands of small farmers can be a major administrative
exercise that takes up much of the time revenue and extension staff
• DURATION OF THE SUBSIDIES.
• Adoption of input for a certain time with subsidy, financial support for a certain
period or have unlimited time.

4. INDIAN SUBSIDY MECHANISM
• Fertilizer subsidy bill in India this year is estimated at around 700 billion rupees ($11
billion)
• Govt. cautious to avoid irking voters in the agriculture sector
• Fertilizer companies produce receipts of their sale at each district duly authenticated and
claim is credited within two months.
• Reports of smuggling of subsidized product (Nepal and Bangladesh), sale above
subsidized price in shortage regime and far flung places, industrial use of subsidized
products etc.
• Direct Benefit Scheme in the fertilizer sector is being tested and found effective.
• Direct Benefit Transfer (DBT) include creation of Aadhaar-seeded database
(Registration of all farmers done under Aadhaar Scheme) of beneficiaries, integration
between soil health card data and DBT for optimal use of nutrients and subsidy savings.
• Linking of actual sales to subsidy payments will facilitate a more transparent and faster
tracking of funds along the value chain that is from manufacturers to beneficiaries.
Besides, the diversion of fertilizers to the industries will be stopped.
• Direct Benefit Transfer farmers will buy subsidized fertilizer from the retailer, wherein, all
details of the transaction will be electronically recorded and claim so generated will be
reimbursed to the fertilizer manufacturer a day or two later. This digital trail will also
ensure that fertilizer has been reached to the right person

5. INDIAN SUBSIDY MECHANISM
• Point of sale (PoS) machines are required to be installed by the companies at each sale
point to capture details of the farmer, his Aadhaar number, details of the retailer, the
product purchased, the farm land in which the commodity is used, health of the soil, land
ownership details if available and the opening and closing stock of every retailer.
• Aadhaar number or Kisan Credit Card is a basis of identification. Once identified through
this card, farmer will buy fertilizer at a subsidized rate himself and not at the market price.
The recommendation of his soil condition and fertilizer requirement will also be generated
with his recognition.
• Thereafter, difference between market rate and the subsidized amount will be credited
into bank account of the manufacturer.
• DBT in fertilizer is not strictly subsidy transfer into farmers account but it is more of an
identification process to ensure actual subsidy gets credited into the account of
companies for every bag of fertilizer sold.
• Soil health card scheme has been introduced in 2014 to target every farm/farmer to
ensure balanced use of fertlizers, 100% neem coating of urea to prevent its diversion and
overuse compare to other fertilizers.

6. FARMERS SCRATCH CARD SUBSIDY
• Scratch card subsidy program for subsidy on MOP and SOP in Punjab. Now on DAP
• Farmer, Fertilizer companies, Punjab Information Technology Board (PITB) and mobile
companies are partners.
• Interested Farmers have to get themselves registered if not already registered in any
Government scheme.
• Pre-Paid Vouchers @ Rs. 800/- for SOP & Rs. 500/- bag for MOP in fertilizer bags.
• Registered farmer will have pay full to purchase MOP or SOP bag and after opening the
bag will find a voucher. A limit has been imposed for purchase of fertilizer for one CNIC
• This voucher will be scratched to get a unique code. Cash subsidy will be disbursed from
nearby mobicash centre after SMS of this code. Initially Rs 500 Million has been
allocated in this program. PITB to issue unique code to the fertilizer firms on request to
fill in bags.
• Fertilizer companies are prequalified and MOU has been signed with them.
• Mobile company has also been selected through a transparent process. The amount of
subsidy transferred to the fertilizer firm to pass to the farmers through their cash
disbursement centers.
• An IT team with dashboard has also been established to address to the farmers
problems pass to the farmers problems Farmers registration.

7. CHALLENGES
• Deteriorating Soil Health & Imbalance use
• Productivity, diversification and intensification
• Land fragmentation and rising number of farms
• Literacy rate and availability of modern gadgets every where
• Correct application of fertilizers (Time, Rate, Type, Machine etc)
• Diverse climatic conditions with different crops, fertilizers
• Response from farmers community & Ease in adoption
• Reimbursement of claims and type of product

8. PROPOSALS FOR GRANT OF SUBSIDY
(LONG TERM)
• National Program for soil health improvement and efficient fertilizer
management
• Registration of all farmers for Kissan Card (unique ID) & Soil analysis
report for every farmer in Pakistan
• Subsidy on Gypsum and other fertilizers through Kissan Card once in
every season for direct subsidy
• Strengthening of soil and water testing labs and use of private sector
to target every acre of soil in Pakistan and its correct use
• Provincial Governments to support on at least 10 years period

9. PROPOSALS FOR GRANT OF SUBSIDY
(SHORT TERM)
• DIRECT BENEFIT TRANSFER FIRST OPTION
• Punjab Scratch Card program (Difficult to shift from other provinces, Less
expenditures/beneficiaries
• Voucher distribution scheme through Revenue and Agriculture in Provinces on the basis of land
record and last year certified Girdawari
 Farmers Registration and other entries may also be completed through this system for
issuance of Kissan Card to shift to this system in next two years
• INDIRECT SUBSIDY THROUGH REDUCTION OF TAXES FOR REDUCTION IF FERTILIZER
PRICES.
• Nitrogen and Phosphatic Fertilizers only.
• Subsidy claim after sale record substantiated by the company through dealer DD,
Transportation, Product verified receipt, tax return from company and market prices, quality,
availability etc from Province.
• Satisfactory report from each district through the province that subsidized fertilizer has been
supplied and available with mechanism of addressing the complaints. and availability

10. VOUCHERS FOR DISTRIBUTION

11. SCRATCH CARD SUBSIDY