AgriStack is a digital public infrastructure being developed under India’s Digital Agriculture Mission to create a comprehensive database of farmers and agricultural resources. It integrates farmer identity, land ownership details, cropping patterns, and other agricultural information into a unified digital platform. As of December 2025, around 76.7 million farmer IDs have been generated, with the government targeting coverage of 110 million farmers by FY27. The platform also includes geo-referenced land records and digital crop surveys, enabling data-driven agricultural governance.

In the context of fertiliser subsidies, AgriStack allows the government to link fertiliser purchases with verified farmer identities. Under pilot projects in districts of Haryana, fertiliser sales are connected to farmer IDs, ensuring that fertilisers are sold only to legitimate beneficiaries such as the landowner, cultivator, or authorised representative. This digital verification reduces the scope for diversion of subsidised fertilisers to non-agricultural uses or black markets.

The platform also enables scientific nutrient management. By integrating data on crop type, land size, and irrigation availability, fertiliser sales can be aligned with recommended dosages by the Indian Council of Agricultural Research (ICAR). This helps address the problem of excessive urea consumption and distorted soil nutrient balance. In the long term, AgriStack can support precision agriculture, targeted subsidies, and better policy planning through real-time agricultural data.

Rationalising fertiliser subsidies has become a major policy priority due to the fiscal burden, environmental consequences, and inefficiencies associated with the current system. India provides heavy subsidies on fertilisers, especially urea. While the production or import cost of urea ranges between ₹32,000–₹36,000 per tonne, farmers purchase it at a highly subsidised price of about ₹5,630 per tonne. This large gap is borne by the government through subsidies, which amounted to approximately ₹1.86 trillion in FY26.

Such heavy subsidies create price distortions that encourage excessive and imbalanced fertiliser use. Urea is significantly cheaper than other nutrients such as phosphatic and potassic fertilisers, leading farmers to overuse nitrogen-based fertilisers. Government data indicates that while 65% of farmers purchase a reasonable quantity of urea, about 35% consume it excessively. This imbalance has resulted in declining soil health, reduced productivity, and environmental degradation.

Another concern is leakage and diversion. Subsidised fertilisers are sometimes diverted for industrial use or smuggled to neighbouring countries. By digitising fertiliser sales through AgriStack and potentially introducing Direct Benefit Transfer (DBT) to farmers, the government aims to ensure that subsidies reach intended beneficiaries. Rationalisation is therefore important for fiscal sustainability, soil health improvement, and better targeting of public resources.

Digital technologies such as Central Bank Digital Currency (CBDC), e-RUPI vouchers, and digitised ration cards have the potential to fundamentally transform the functioning of the Public Distribution System (PDS). Traditionally, the PDS has suffered from issues such as leakage of foodgrains, under-weighing, poor quality supply, and dealer monopolies. Even with reforms like Aadhaar authentication and electronic Point-of-Sale (ePoS) devices, operational challenges have persisted.

Under the new pilot programme launched in Gujarat, beneficiaries receive digital food coupons in the form of programmable digital currency (e₹). These coupons can be redeemed at ration shops to obtain their entitled quantity of foodgrains. Because these digital vouchers are traceable and programmable, the system ensures that subsidies are used strictly for food purchases. It also reduces dependence on intermediaries and allows beneficiaries to directly control their entitlements through mobile applications or SMS-based systems.

From the government’s perspective, the system enables tamper-proof and auditable transactions. Real-time digital records allow better monitoring, automated reconciliation of accounts, and improved transparency through dashboards. Partner banks and fintech institutions also benefit from deeper integration with government welfare programmes. Overall, digital technologies can make the PDS more efficient, transparent, and beneficiary-centric while reducing corruption and administrative inefficiencies.

Excessive urea consumption in India is primarily driven by price distortions, lack of monitoring, and limited awareness about balanced fertilisation. Urea is heavily subsidised compared to other fertilisers, making it significantly cheaper for farmers. As a result, farmers often apply urea beyond recommended levels to increase crop yields, even though excessive nitrogen can damage soil health and reduce long-term productivity.

Another reason is the absence of strict tracking mechanisms in fertiliser sales. Fertilisers are often sold without linking purchases to landholding size or crop type. This creates opportunities for over-purchasing, hoarding, or diversion of subsidised fertilisers to non-agricultural uses. Government analysis shows that about 163 districts in India have extremely high fertiliser usage, with average urea consumption reaching around 100,000 tonnes annually in each of these districts.

Digital reforms such as linking fertiliser purchases with AgriStack farmer IDs can address these problems. By integrating land records, crop information, and irrigation data, fertiliser sales can be aligned with scientific dosage recommendations. Authorities can also set limits on purchases based on land size and crop requirements. Over time, such data-driven monitoring can reduce excessive fertiliser use, improve soil health, and make subsidy expenditure more efficient.

The use of digital platforms such as AgriStack and Central Bank Digital Currency (CBDC) in subsidy delivery offers several significant benefits. First, digital systems enhance transparency and accountability by creating verifiable records of transactions. This reduces leakage, corruption, and diversion of subsidised goods. For example, pilot projects linking fertiliser sales to farmer IDs in Haryana reportedly helped save more than 100,000 tonnes of urea in a short period.

Second, digital platforms enable targeted welfare delivery. By integrating farmer identity, landholding size, and cropping patterns, subsidies can be customised according to actual needs. Similarly, digital vouchers in the PDS allow beneficiaries to directly access food entitlements without reliance on intermediaries. Such systems also provide governments with real-time data for monitoring and policy adjustments.

However, several challenges must be addressed. Digital exclusion remains a concern, particularly among small and marginal farmers who may lack digital literacy or reliable internet access. Data privacy and security issues also arise when large-scale personal and land data are collected. Additionally, technological solutions alone cannot address structural problems such as distorted pricing policies or agricultural market inefficiencies. Therefore, digital reforms must be complemented with institutional safeguards, farmer awareness programmes, and balanced fertiliser pricing policies.

The Haryana pilot project provides an important case study of digital governance in agriculture. In several districts of the state, fertiliser sales were linked with farmer IDs generated through the AgriStack platform. The system ensured that fertilisers could be purchased only by legitimate stakeholders such as the landowner, cultivator, or an authorised person. This helped prevent diversion and misuse of subsidised fertilisers.

The results of the pilot were notable. Within less than four months, authorities reported savings of around 102,000 tonnes of urea and more than 72,000 tonnes of DAP compared to the previous year. These savings primarily resulted from preventing pilferage and unauthorised purchases. The pilot demonstrated that linking fertiliser sales with verified farmer databases can significantly reduce leakages in subsidy distribution.

The Haryana experience also highlights broader policy lessons. First, accurate digital databases such as geo-referenced land records and farmer IDs are essential for effective targeting. Second, pilot-based implementation allows governments to test technological solutions before nationwide rollout. Finally, digital monitoring must be combined with farmer education on balanced fertiliser use to ensure sustainable agricultural practices. The Haryana model therefore provides a roadmap for scaling similar reforms across other states in India.