Agriculture accounts for approximately 34% of Pakistan's yearly exports (GOP 2024). The expansion of the agriculture sector is a milestone in the country's overall economic growth (GOP 2021). Since agriculture contributes significantly to the country's GDP, farm inputs are absolutely vital for guaranteeing food security, raising agricultural output, and thereby sustaining the economy (Bilal and Jaghdani 2024; Hussain and Maharjan 2025; Khan et al. 2022; Razzaq et al. 2023). Fertilizers and pesticides assist in satisfying the rising food demand and maintaining competitiveness in global markets by replenishing soil nutrients and protecting crops from pest and disease losses (Hussain and Maharjan 2025). For many smallholder farmers, however, the growing costs of pesticides, seeds, and fertilizers—along with restricted financial availability—make these inputs an expensive option (Ashraf et al. 2024; Bilal and Barkmann 2019; Bilal and Jaghdani 2024).
To address this constraint, the Government of Pakistan, in collaboration with international donors and non-governmental organizations (NGOs), launched a subsidy initiative known as the Kissan Card Subsidy Program (KCSP). The program aims to reduce upfront costs and make essential farming inputs more affordable and accessible for resource-constrained farmers. Through a digital payment mechanism, farmers can access subsidies on agricultural inputs—mainly chemical fertilizers, pesticides, and improved seeds—via registered vendors. While this initiative represents an important step toward improving input access and digital financial inclusion in agriculture, its structure raises critical questions about its long-term environmental implications and its alignment with sustainability goals.
With rising global concern over the harmful effects of synthetic agrochemicals, several scholars have argued that input subsidy programs (ISPs) should evolve to support sustainability-oriented agricultural practices (Bateman et al. 2021; Grovermann et al. 2017; Tambo et al. 2021). These arguments emphasize that subsidizing synthetic agricultural chemicals using public funds may discourage farmers from adopting more sustainable practices. For instance, Pingali and Rosegrant (2001), argue that governments should refrain from subsidizing synthetic chemicals, as such policies tend to promote unsustainable agricultural systems. This perspective is echoed in the International Code of Conduct on Pesticide Management codeveloped by the Food and Agriculture Organization (FAO) and the World Health Organization (WHO). Article 8.1.3 of the Code urges that “governments should ensure that any subsidies or donations do not lead to excessive or unjustified use, which could divert attention from more sustainable alternative measures” (FAO and WHO 2014).
Despite these global recommendations, empirical evidence remains limited on whether input subsidies, in practice, encourage or inhibit farmers from adopting environmentally sustainable alternatives to conventional intensive agriculture. A number of studies have examined the impacts of ISPs on a wide range of outcomes—including the use of modern inputs (primarily fertilizers and improved seeds), crop acreage, production, diversification, deforestation, food prices, farm incomes, rural nutrition, and poverty (e.g., Abman and Carney 2020; Bezu et al. 2014; Chibwana et al. 2012; Khonje et al. 2015; Kuntashula and Mwelwa-Zgambo 2022; Takeshima and Liverpool-Tasie 2015)—but few have directly explored how ISPs influence the adoption of environmentally sustainable farming practices.
This study contributes to this emerging body of literature by empirically assessing whether Pakistan's KCSP promotes or undermines the adoption of sustainable intensification techniques. Much of the existing research has focused narrowly on soil fertility management, with mixed findings. For instance, participation in ISPs was positively linked to organic fertilizer adoption and conservation practices in Malawi (Khonje et al. 2022), while Mason et al. (2018) found negative effects on the adoption of intercropping and fallowing in Zambia.
Given its design—which primarily subsidizes synthetic fertilizers, pesticides, and high-yielding seed varieties—the KCSP may have unintended consequences for sustainability. Specifically, by lowering the relative cost of chemical inputs, it may disincentivize farmers from adopting environmentally friendly practices such as integrated pest management (IPM) and organic fertilization. To test these possibilities, we formulate the following hypotheses.
H2
Participation in the KCSP negatively affects the adoption of environmentally sustainable practices such as integrated pest management (IPM) and organic manure (OM) use .
This question has become increasingly pertinent in the context of rising chemical input use in developing countries and the resulting environmental and health concerns. These issues are further intensified by climate change, which is expected to increase pest and disease pressures through warming temperatures and invasive species (Bebber et al. 2013; Deutsch et al. 2018; Diffenbaugh et al. 2008). Sustainable farming practices such as organic manure application, integrated pest management, and cultivation of resilient crops provide safer and more sustainable alternatives but remain underrepresented within most subsidy schemes.
To address these knowledge gaps, the current research critically evaluates whether Pakistan's input subsidy structure—specifically the KCSP—enhances or undermines the adoption of sustainable agricultural practices, and how it can be restructured to provide both economic and environmental benefits. To estimate the causal effect of input subsidy provision on the adoption of sustainable practices, we employ a recursive bivariate probit model, which jointly estimates subsidy receipt and practice adoption while controlling for unobservable factors influencing both decisions. This approach strengthens the credibility of our estimates and is particularly suitable for analyzing policy mechanisms under potential endogeneity.
By doing so, this article contributes to the broader debate on Pakistan's agricultural reform, rural development, and environmental sustainability. It also provides policymakers with critical insights on how to design more inclusive, effective, and sustainability-oriented subsidy regimes that align with the country's development ambitions. As global attention increasingly turns toward climate-smart agriculture and nature-based solutions, understanding how subsidy programs facilitate or constrain this transition is not only a national concern but a global imperative.
Kissan Card Subsidy Program (KCSP ) of Pakistan Government
Agricultural input subsidies and rural credit programs have long been a central feature of Pakistan's farm support policies. Since the 1960s, federal and provincial governments have periodically introduced initiatives to improve farmers' access to fertilizers, seeds, and credit through both direct subsidies and concessional loans. Earlier schemes included the Zarai Taraqiati Bank Limited (ZTBL) credit lines, the Kissan Package (2015–2018) launched by the federal government to provide fertilizer and electricity subsidies, and the Punjab Kissan Package (2016), which offered cash support and concessional loans to smallholders. While these programs increased input access, they often suffered from leakages, elite capture, and weak targeting, as most disbursements occurred through manual channels with limited transparency. Moreover, the subsidy delivery systems lacked integration with land and identity records, leading to duplication and exclusion errors.
Building on these lessons, the Chief Minister's Kissan Card Subsidy Program (KCSP) was launched by the Government of Punjab in 2021 as a digitally integrated subsidy and credit facilitation initiative designed to modernize agricultural support delivery. The program aimed to overcome the chronic weaknesses of earlier schemes—particularly the lack of transparency, poor beneficiary targeting, and limited financial inclusion of smallholders. Its overarching goals are to digitize farm subsidy distribution, expand access to agricultural finance, and improve input delivery efficiency while ensuring accountability through digital traceability.
The scheme is implemented by the Punjab Agriculture Department in collaboration with the Punjab Information Technology Board (PITB), the Bank of Punjab (BOP), and the Punjab Land Records Authority (PLRA) (Government of Pakistan 2021; Government of Punjab 2024; Punjab Information Technology Board 2021). PITB provides the digital infrastructure—designing and managing the registration portal, farmer database, and land-verification system—by integrating data from the National Database and Registration Authority (NADRA), Punjab Land Records Authority (PLRA), and the Agriculture Department. This linkage ensures that only verified farmers can register and receive a Kissan Card digitally connected to their Computerized National Identity Card (CNIC) and mobile number (Government of Pakistan 2021; Government of Punjab 2024; Punjab Information Technology Board 2021).
Through this platform, farmers register by sending an SMS (“PKC [space] CNIC” to 8070) and can redeem electronic vouchers at authorized dealers for subsidized purchases of fertilizers, certified seeds, pesticides, and other approved inputs. The digital system also disseminates weather alerts, extension advisories, and scheme updates exclusively to registered farmers, thereby improving targeting and traceability. Table 1 summarizes the scheme's features and evolution between its 2021 launch phase and the 2024 expansion phase.
TABLE 1 Features and evolution of Kissan Card scheme.
Features
2021 launch phase
2024 expansion phase
Initiation year
2021
2024
Implementing bodies
Punjab Agriculture Department & designated bank with Punjab information technology board (PITB) support
Punjab Agriculture Department & designated bank with Punjab information technology board (PITB) support— wider institutional integration
Main objective
Provide subsidized agricultural inputs and easy credit to smallholders to improve productivity
Broaden financial inclusion and strengthen farm-level modernization (inputs, machinery, solar irrigation)
Eligibility criteria
Landholding up to 12.5 acres; valid identity card; registered SIM
Same core eligibility
Registration mechanism
Short Message Service (SMS) based (“PKC [space] identity number” to 8070)
Short Message Service (SMS) based (“PKC [space] identity number” to 8070)
Card issuance
Kissan Card issued via designated bank, linked to identity card
Expanded digital card issuance through PITB's integrated platform; e-voucher system for authorized dealers
Credit limit
Up to 150,000 Pakistani Rupee (Approximately 526 United States Dollars) per farmer
Up to 300,000 Pakistani Rupee (Approximately 1052 United States Dollars) per farmer
Loan tenure
6 months per cropping season +1-month grace period
Extended tenure with flexible repayment and seasonal rollover options
Disbursement mechanism
Credit accessed through bank and authorized input dealers
Wider digital disbursement
Subsidy coverage
Chemical fertilizers, certified seeds, pesticides
Chemical fertilizers, certified seeds, pesticides
Target beneficiaries
Around 500,000 smallholders targeted in initial rollout
> 600,000 farmers targeted
Monitoring and traceability
Managed digitally through Agriculture Department
Fully digitized tracking via PITB and Agriculture Department
Key digital partner
Agriculture Department developed registration and SMS verification modules
PITB – expanded role in database management and transparency monitoring
Environmental implications
Promote chemical-input use and intensification although Potential for green transition if paired with advisory/digital extension
Promote chemical-input use and intensification although Potential for green transition if paired with advisory/digital extension
In its initial phase, the KCSP targeted approximately 500,000 smallholders, offering seasonal input loans of up to PKR 30,000 per acre (maximum PKR 150,000 per farmer). The 2024 expansion introduced new modules for digital payments, biometric verification, and dealer management, and extended eligibility to women and tenant farmers. By mid-2025, more than 628,000 farmers had received Kissan Cards, and over Pakistani Rupee (PKR) 84 billion had been disbursed.
Although the program has successfully reduced credit constraints and improved access to modern inputs, its subsidy portfolio remains heavily weighted toward synthetic fertilizers and pesticides. Consequently, while the KCSP enhances productivity and financial inclusion, it may unintentionally discourage the adoption of organic manure use and integrated pest management (IPM)—two key pillars of sustainable agriculture. The absence of direct incentives for eco-friendly inputs highlights the need to reassess how subsidy programs can balance productivity growth with environmental stewardship.
Methodology
Study Area and Data Collection
The current study employed a multistage systematic random sampling technique to survey four districts in the southern part of the Punjab province—Khanewal, Muzaffargarh, Multan, and Lodhran (Figure 1) during the rabi season of 2025. These districts were selected due to their vulnerable climatic conditions and relatively low levels of agricultural development, making them ideal for assessing how subsidies influence farmer participation in sustainable agricultural practices, particularly in resource-constrained environments where such support is most needed. Historically, South Punjab has remained one of Pakistan's most agrarian yet economically marginalized regions, characterized by water scarcity, soil degradation, and limited access to modern inputs and financial services. Consequently, the region has been the focus of several government farm input subsidy initiatives aimed at enhancing productivity and alleviating rural poverty. However, persistent implementation challenges and unequal access to resources have often constrained their effectiveness, making South Punjab a pertinent context for examining the role of schemes such as the Kissan Card in promoting inclusive and sustainable agricultural development. Since the total number of farmers in the sampled districts was unknown, we used the well-established formula suggested by Teddlie and Yu (2007) to compute the sample size.1 n 0 = Z 2 PQ e 2 = 1.96 2 0.5 0.5 0.046 2 = 440 $$ {n}_0=\frac{Z^2\ \mathrm{PQ}}{e^2}=\frac{(1.96)^2\ (0.5)(0.5)}{(0.046)^2}=440 $$
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The sample size for this study was determined using Cochran's formula for sample estimation, which is appropriate when the total population is large or unknown. Assuming a 95% confidence level (Z = 1.96), a 5% margin of error (e = 0.046), and a population proportion of 0.5 to ensure maximum variability, the minimum required sample size was calculated as 440 farmers (Cochran 1977, 1940).
Cochran's formula was selected because it provides a statistically robust approach to determining an appropriate sample size under conditions of population uncertainty. Unlike simpler methods such as Yamane or Slovin, Cochran's model incorporates the confidence level, variability, and precision parameters explicitly, thus ensuring higher accuracy and representativeness of the survey results.
To ensure analytical validity, the survey sample was restricted to farmers who met the official eligibility criteria for the Kissan Card Subsidy Program (KCSP)—including registration with the provincial agriculture department and a smallholder of cultivable land—so that both participants and nonparticipants had an actual opportunity to participate in the program. This restriction allows for a valid comparison between voluntary participants and nonparticipants within the eligible population.
For data collection, we used a step-wise procedure to approach respondents (Figure 2). In the first phase, we selected 8 districts in Punjab province. Second, in each district, one tehsil (sub-district) was randomly chosen. Third, we randomly selected 2 union councils from each tehsil. Next, 4 villages from each union council were selected to conduct face-to-face interviews with 5 farmers from each village. In the last stage, we selected a specific number of union councils from each of the tehsils. This involved the selection of multiple villages from each of the union councils. Finally, we prepared a data set comprised of 440 respondents for further empirical analysis. The following expression represents the sample selection process used in this study.
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Conceptual Framework
Agricultural subsidies are financial supports provided by governments to promote productivity, ensure food security, stabilize markets, and encourage environmentally sustainable practices (Hazrana and Mishra 2024). These subsidies may take the form of direct cash transfers, reduced input costs (such as seeds, fertilizers, and fuel), price support mechanisms, and crop insurance schemes (Mason et al. 2013; Wossen et al. 2017). The rationale for these subsidies is to protect farmers from market volatility and climate-related risks, and to ensure food affordability for consumers (Fan et al. 2023; Zhang et al. 2024).
The conceptual framework in Figure 3, illustrates how farmers' socioeconomic, institutional, and environmental characteristics influence their participation in the Kissan Card Subsidy Program (KCSP) and how such participation subsequently affects their decision to adopt sustainable agricultural practices. The KCSP, implemented by the Government of Punjab through the Punjab Information Technology Board (PITB), digitally registers and verifies eligible farmers based on land records maintained by the Punjab Land Records Authority (PLRA). This digital interface ensures transparency and facilitates the efficient delivery of subsidies and interest-free loans to smallholders (Government of Pakistan 2021; Government of Punjab 2024; Punjab Information Technology Board 2021).
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At the first stage, farmers' farmer attributes, farm-level characteristics, institutional characteristics, and environmental conditions jointly determine the likelihood of KCSP participation. Once registered and approved, participation in the program is expected to influence farm-level behavior through multiple channels: by alleviating financial constraints, improving access to subsidized inputs, and facilitating opportunity mobilization within the agricultural economy. The Punjab Information Technology Board (PITB) plays a pivotal role in this process by digitizing farmer records, managing SMS-based communication systems, and linking participants with verified input vendors through an integrated digital platform. Through these PITB-led mechanisms, the program indirectly enhances farmers' access to price and market information, reduces information asymmetry, and strengthens their connection to institutional and market networks (Punjab Information Technology Board 2021). In the second stage, program participation is hypothesized to affect the adoption of sustainable agricultural practices, including stress-tolerant varieties (STVs), integrated pest management (IPM), and the use of organic manure (OM). The direction of influence may be positive or negative depending on the nature of subsidies and farmers' production choices. For instance, participation in the KCSP may positively influence adoption by easing credit constraints, allowing farmers to invest in high-yielding or stress-tolerant varieties, purchase certified seed, and access quality inputs that enhance productivity and resource-use efficiency. Conversely, it may negatively influence the adoption of certain sustainable practices if the availability of subsidized chemical fertilizers and pesticides reduces the incentive to use organic manure or integrated pest management (IPM) techniques. Since the subsidy primarily targets chemical fertilizers, pesticides, and high-yielding seed varieties, it may inadvertently discourage environmentally sustainable behaviors. Thus, while the program promotes technological intensification and higher yields by improving farmers' access to credit and inputs, it may also compromise environmental sustainability. The overall direction of its impact therefore remains an empirical question, although information and advisory services delivered through PITB may affect farmers' decisions. The recursive bivariate probit model used in this study appropriately captures this interdependence by jointly estimating the determinants of participation and adoption decisions while accounting for potential correlation between their unobserved factors.
Empirical Framework
The decision to participate in the Kissan Card Subsidy Program (KCSP) and to adopt Sustainable Agricultural Practices (SAPs) are modeled as binary outcomes. Specifically, participation in the KCSP is expressed as y 1 $$ {y}_1 $$ = 1 $$ =1 $$ y 1 = 0 $$ {y}_1=0 $$ y 2 = 1 $$ {y}_2=1 $$ y 2 = 0 $$ {y}_2=0 $$
This approach is preferred over a standard probit or a multivariate probit framework because it explicitly accounts for causal ordering and correlated unobservables. A univariate probit would treat participation and adoption as independent binary decisions, ignore simultaneity, and lead to biased estimates if unobserved farmer characteristics affect both outcomes. Conversely, a multivariate probit can jointly estimate multiple adoption decisions but treats all outcomes as symmetric and contemporaneous, without modeling directional causality. In contrast, the RBP structure allows participation in KCSP (the first equation) to directly influence SAP adoption (the second equation), while simultaneously correcting for potential endogeneity and correlated error terms across the two decisions, thus yielding consistent estimates of program impact (Greene 2008).
Identification of the RBP model requires an instrumental variable that affects the likelihood of KCSP participation but is uncorrelated with the adoption decision. Consistent with this requirement, digital assistance through friends or relatives during Kissan Card registration is used as the identifying instrument. This factor plausibly affects participation—since digital literacy and online access are often barriers to enrollment—but is unlikely to have a direct influence on the farmer's decision to adopt specific sustainable practices once other socio-economic and farm characteristics are accounted for. The RBP model has been widely used in ex-post evaluations of agricultural programs where participation and adoption decisions are jointly determined (Addai et al. 2022; Amadu et al. 2020; Li et al. 2019; Ma et al. 2018; Olawuyi and Mushunje 2020).2 y 1 * = γ Z ′ + ε , where y 1 = 1 if y 1 * > 0 , otherwise y 1 = 0 $$ {y}_1^{\ast }=\gamma {Z}^{\prime }+\varepsilon, \kern0.5em \mathrm{where}\kern0.5em {y}_1=1\ \mathrm{if}\ {y}_1^{\ast }>0,\kern0.75em \mathrm{otherwise}\ {y}_1=0 $$ 3 y 2 * = φ y 1 * + λ X ′ + μ , where y 2 = 1 if y 2 * > 0 , otherwise y 2 = 0 $$ {y}_2^{\ast }=\varphi\ {y}_1^{\ast }+\kern0.5em \lambda {X}^{\prime }+\mu, \kern0.5em \mathrm{where}\kern0.75em {y}_2=1\ \mathrm{if}\ {y}_2^{\ast }>0,\kern0.5em \mathrm{otherwise}\ {y}_2=0 $$
Let y 1 * $$ {y}_1^{\ast } $$ y 2 * $$ {y}_2^{\ast } $$ y 1 * $$ {y}_1^{\ast } $$ y 2 * $$ {y}_2^{\ast } $$ y 1 $$ {y}_1 $$ y 2 $$ {y}_2 $$ Ζ $$ Z $$ Χ $$ X $$ γ $$ \gamma $$ λ $$ \lambda $$ ε $$ \varepsilon $$ μ $$ \mu $$ ρ $$ \rho $$ ρ $$ \rho $$
Estimation is conducted through the Full Information Maximum Likelihood (FIML) approach, which allows the two equations to be estimated jointly, thereby accounting for correlated disturbances and ensuring consistent and efficient parameter estimates (Amare et al. 2012). This method is generally preferred over limited-information or two-stage estimators when addressing endogeneity arising from jointly determined binary outcomes (Wooldridge 2010).
According to Chang and Mishra (2008), four possibilities exist in terms of the outcomes of the RBP models.
An eligible farmer decides to participate in Kissan Card scheme and adopts a sustainable agricultural practice (y 1 = 1, y 2 = 1).
An eligible farmer decides to participate in Kissan Card scheme and does not adopt a sustainable agricultural practice (y 1 = 1, y 2 = 0).
An eligible farmer does not participate in Kissan Card scheme but adopts a sustainable agricultural practice (y 1 = 0, y 2 = 1).
An eligible farmer does not participate in Kissan Card scheme nor adopts a sustainable agricultural practice (y 1 = 0, y 2 = 0).
Variable Specification
The study utilized data from 440 farmers to explore the effects of subsidy participation on sustainable agriculture practices and productivity. Participation in the subsidy programs was subject to numerous socioeconomic and institutional factors. Based on the following empirical literature (Hazrana and Mishra 2024; Malimi 2023; Mason et al. 2013; Ricker-Gilbert et al. 2013; Wossen et al. 2017), the current study categorizes the determinants of CF participation as farmer, farmland, and institutional characteristics.
The treatment variable for this study is Kissan Card subsidy participation defined as a government-led agricultural subsidy initiative in which eligible farmers register to access targeted financial support (such as fertilizer subsidies, seed discounts, or cash transfers) through a digital platform. This program is typically administered by agricultural departments in collaboration with financial institutions. In this study, Kissan Card participation is operationalized as a binary variable indicating whether the farmer is enrolled in the program (yes = 1, no = 0). The outcome variable for this study is the adoption of sustainable intensification practices (SAPs). Sustainable agriculture aims to address three challenges: (i) constantly enhancing the adaptive capacity of current agricultural setups against the hazardous effects of climate change, (ii) decreasing greenhouse gas emissions from agricultural systems, and (iii) ensuring local and global food availability (Chen et al. 2023; Ma and Wang 2020; Mukta et al. 2023; Newell et al. 2019). To fulfill the ever-growing demands of industry and consumers, the focus must shift to a climate-resilient food system (Haverkort and Verhagen 2008). Based on a local context, the current study selected three sustainable agricultural practices (SAPs), namely integrated pest management (IPM), improved stress-tolerant (STV) high-yield crop varieties, and organic manuring (OM) (Jabbar et al. 2022; Siddiqua et al. 2021; Washington 2017).
Improved stress tolerant (STV) with various traits and characteristics tailored to the specific agroecological circumstances, such as increased yield potential and/or increased tolerance to crop diseases and droughts. IPM involves using a combination of biological, cultural, and chemical practices to control pests in a more sustainable way. Manures are the organic materials derived from animal, human, and plant residues which contain plant nutrients in complex organic forms. All of the SAPs were operationalized as dummy variables as if the farmer adopts (yes = 1, no = 0).
Based on the local context, the current study selected three sustainable agricultural practices (SAPs) as outcomes of the Kissan Card program: integrated pest management (IPM), improved stress-tolerant (STV) high-yield crop varieties, and organic manuring (OM) (Jabbar et al. 2022; Siddiqua et al. 2021; Washington 2017). These practices were chosen because they are likely to be directly influenced by the structure of the Kissan Card, which provides subsidized access to inputs. All three SAPs were operationalized as binary variables, coded as 1 if the farmer adopts the practice and 0 otherwise, enabling clear measurement of adoption outcomes and facilitating econometric analysis of the scheme's impact.
Results
Descriptive Statistics
Table 2 presents the descriptive statistics and variable definitions used in the analysis, distinguishing between Kissan Card Subsidy Program (KCSP) participants and nonparticipants. On average, 41.4% of the sampled farmers participated in the KCSP. Among the sustainable agricultural practices, 36.9% of farmers adopted stress-tolerant varieties (STVs), 68.7% practiced integrated pest management (IPM), and 69.9% used organic manure (OM). The mean comparison indicates that KCSP participants were substantially more likely to adopt stress-tolerant varieties (88.4%) compared to nonparticipants (10.3%), with a highly significant mean difference (t = −42.96, ***p < 0.01). Differences in IPM and organic manure adoption between the two groups were smaller but statistically significant at the 5% level.
TABLE 2 Descriptive statistics and definition of the variables.
Variable
Description
Mean
SD
Nonparticipants
Participants
T -test
Kissan card Subsidy participation (KCSP)
1 = if farmer participate in government subsidy program (Kissan Card), 0 = otherwise
0.414
0.493
Stress tolerant varieties (STVs) adoption
1 = Stress tolerant varieties adoption, 0 = otherwise
0.369
0.483
0.103
0.884
−42.955***
Integrated pest management (IPM) adoption
1 = IPM adoption, 0 = otherwise
0.687
0.463
0.657
0.730
−1.631**
Organic manure (OM) adoption
1 = Organic manure adoption, 0 = otherwise
0.699
0.459
0.673
0.736
−1.420**
Age
Number of years
44.756
13.436
44.614
44.956
−0.261
Gender
1 = Male, 0 = Female
0.820
0.384
0.836
0.796
1.070
Education
Number of years in school
5.790
3.444
5.626
6.021
−1.185*
Information and Communication Technology (ICT) usage
1 = Farmer is an ICT user, 0 = no access
0.571
0.495
0.552
0.598
−0.966
Digital assistance
During Kissan card registration, did you receive any digital or technical help—like sending an SMS, using an app, by friends, family members or any other expert 1 = yes 0 = no
0.548
0.498
0.490
0.631
−2.959
Off-farm participation
1 = Farmer is participating in off-farm activities, 0 = no
0.482
0.500
0.517
0.434
1.725*
Extension access
1 = Farmer have Extension access, 0 = no
0.753
0.431
0.754
0.752
0.050
Group membership
1 = Farmer belongs to a farming group, 0 = no
0.544
0.498
0.560
0.521
0.793
Credit access
1 = Farmer have credit access, 0 = no
0.435
0.496
0.447
0.417
0.621
Remittance recipient
1 = if farmer receive remittance, 0 = otherwise
0.405
0.491
0.408
0.401
0.156
Irrigation access
1 = Farmer have access to proper irrigation services, 0 = no
0.460
0.498
0.369
0.587
−4.618
Livestock ownership
Number of livestock ownership
5.501
11.177
5.642
5.302
0.313
Land to market distance
Land to market distance in kilo meters
3.003
2.183
3.063
2.920
0.676
Farm size
Acres under cultivation
2.002
0.635
2.035
1.951
1.283*
The average farmer in the sample was approximately 45 years old, had completed about 5.8 years of schooling, and 82% were male. Around 57% of respondents reported regular use of information and communication technologies (ICTs), while 54.8% received some form of digital or technical assistance—often informal—during KCSP registration. Nearly half (48.2%) of the farmers were engaged in off-farm income-generating activities. In terms of institutional and resource-related variables, about 75% of farmers reported access to agricultural extension services, 54% were members of a farming group, 43.5% had access to agricultural credit, and 40.5% were remmitence recipient. Access to irrigation was reported by 46% of farmers, with KCSP participants showing significantly higher access (58.7%) compared to nonparticipants (36.9%). On average, farmers owned 5.5 livestock units, cultivated around 2 acres of land, and were located approximately 3 km from the nearest market.
While these descriptive statistics provide useful preliminary insights into farmers' characteristics and program participation, they do not establish causal relationships. Apparent differences between participants and nonparticipants may arise from underlying heterogeneity—such as differences in resource endowment, access to information, or unobserved factors influencing both participation and adoption behavior. Therefore, relying solely on descriptive evidence can be misleading in understanding the true impact of the KCSP. To account for potential selection bias and endogeneity, an empirical analysis using a recursive bivariate probit model is conducted in the subsequent section to rigorously estimate the program's effects on sustainable practice adoption.
Results of Recursive Bivariate Probit (RBP ) Model
To assess the goodness-of-fit current study employed the Hosmer-Lemeshow test. The results reported in Table 3 show that the ρ $$ \rho $$
H0
There is no significant difference between the observed and model-predicted probabilities; the model provides an adequate fit to the data .
H1
There is a significant difference between the observed and model-predicted probabilities; the model does not provide an adequate fit to the data .
TABLE 3 Goodness of fit for the RBP model.
Hosmer-Lemeshow test
Participation in subsidy program and stress tolerant varieties adoption
chi2(8) = 11.65 with Prob > chi2 = 0.1563
Participation in subsidy program and integrated pest management adoption
chi2(9) = 8.86 with Prob > chi2 = 0.3022
Participation in subsidy program and organic manure adoption
chi2(9) = 12.29 with Prob > chi2 = 0.1288
The significant correlation coefficients (ρ εμ $$ {\rho}_{\varepsilon \mu} $$
The results from the Recursive Bivariate Probit (RBP) model in Table 4 reveal that subsidy participation significantly enhances farmers' knowledge and adoption of sustainable practices. After accounting for endogeneity, subsidy participation remains a strong positive predictor across all specifications, highlighting the effectiveness of subsidy programs in promoting sustainable behavior. Additionally, ICT use and access to digital assistance positively and significantly influence farmers' knowledge adoption, suggesting that digital technologies play a crucial role in enhancing agricultural practices. Other factors such as education, gender, farm size, and credit access showed no consistent significant effects. Overall, these findings underscore the importance of targeted subsidy programs and digital support in driving sustainable agricultural development.
TABLE 4 The RBP estimates the impact of subsidy participation on the adoption of SAPs.
Model 1
Model 2
Model 3
KCSP
STV
KCSP
OM
KCSP
IPM
Kissan card participation
4.801***
(0.331)
−1.230***
(0.200)
−1.276***
(0.185)
Age
0.001
(0.004)
0.000
(0.005)
0.001
(0.004)
−0.003
(0.004)
0.001
(0.004)
−0.004
(0.004)
Gender
−0.075
(0.175)
0.043
(0.246)
−0.066
(0.181)
−0.212
(0.168)
−0.056
(0.182)
−0.212
(0.170)
Education
0.021
(0.018)
0.011
(0.027)
0.026
(0.018)
0.040*
(0.017)
0.025
(0.018)
0.034*
(0.017)
ICT usage
0.743***
(0.140)
−0.411
(0.303)
0.778***
(0.144)
0.518***
(0.138)
0.779***
(0.143)
0.474***
(0.140)
Digital assistance
0.420***
(0.131)
0.402***
(0.122)
0.390***
(0.123)
Remittance recipient
−0.236
(0.199)
−0.002
(0.313)
−0.220
(0.202)
−0.050
(0.185)
−0.204
(0.204)
−0.012
(0.188)
Irrigation access
0.173
(0.149)
−0.341
(0.255)
0.141
(0.144)
0.267*
(0.138)
0.127
(0.141)
0.269*
(0.135)
Off-farm participation
−0.391**
(0.141)
0.176
(0.229)
−0.414**
(0.137)
−0.157
(0.126)
−0.423***
(0.137)
−0.193
(0.126)
Extension access
−0.022
(0.145)
0.294
(0.211)
−0.050
(0.147)
0.135
(0.139)
−0.064
(0.145)
0.146
(0.137)
Group membership
−0.179
(0.148)
0.528*
(0.260)
−0.154
(0.144)
−0.024
(0.137)
−0.156
(0.141)
−0.064
(0.133)
Credit access
−0.219
(0.195)
−0.261
(0.317)
−0.212
(0.195)
0.019
(0.179)
−0.195
(0.196)
−0.011
(0.180)
Land to market distance
−0.028
(0.030)
0.025
(0.039)
−0.036
(0.032)
−0.041
(0.028)
−0.041
(0.032)
−0.045
(0.028)
Livestock ownership
−0.005
(0.006)
0.001
(0.009)
−0.006
(0.006)
−0.003
(0.005)
−0.006
(0.006)
−0.002
(0.005)
Farm size
−0.179*
(0.098)
−0.036
(0.143)
−0.185*
(0.095)
−0.008
(0.090)
−0.187*
(0.095)
−0.024
(0.090)
Constant
−0.083
(0.430)
−3.288***
(0.623)
−0.034
(0.429)
0.723
(0.397)
0.013
(0.434)
0.934
(0.394)
ρ
εμ
$$ {\rho}_{\varepsilon \mu} $$
−2.481**
(1.157)
1.312***
(0.463)
1.397***
(0.487)
Log-pseudolikelihood
−339.120
−529.932
−526.704
Wald test of ρ εμ $$ {\rho}_{\varepsilon \mu} $$
4.595**
8.037***
8.227***
Discussion
In this section, we discuss the determinants of farmers' participation in the Kissan Card Program and how such participation influences the adoption of sustainable agricultural practices. The analysis highlights key insights that provide a foundation for designing interventions that balance productivity gains with long-term ecological resilience, as discussed below.
Determinants of Farmers Participation in Subsidy Program
Analysis provides evidence of the positive effect of ICT application on farmers' uptake of government subsidy schemes. Farmer access to ICT equipment, i.e., smartphones and farming apps, improves their awareness of subsidy options as well as procedures, making take-up easier. ICT closes information gaps as well as bureaucratic hurdles that generally deter take-up. This implies that rural digital connectivity expansion as well as provision of digital literacy can potentially boost take-up as well as reach of subsidy schemes for agriculture. Policy interventions must hence address enhancing mobile network coverage, providing easy-to-use digital platforms for subsidy registration, as well as bridging farmers through targeted digital support for more inclusive as well as equitable take-up.
The results indicate that farmers engaged in off-farm work are less likely to participate in the Kissan Card program. One possible explanation is that off-farm income provides alternative financial stability, lessening the farmer's reliance on agricultural credit, subsidies, or digital support services provided under the Kissan Card scheme. Farmers engaged in salaried or business-related off-farm activities may also have better access to commercial banking channels, making them less inclined to register for a specialized agricultural card.
Another reason could be time and attention constraints—off-farm workers spend less time in farming operations, so they may be less aware of, or less motivated to pursue, agricultural programs. This aligns with previous findings in rural livelihood literature (e.g., Barrett et al. 2001; Reardon 1997), where nonfarm employment was associated with lower participation in agricultural interventions. From a policy standpoint, this pattern indicates that farmers diversifying into off-farm activities may be systematically excluded from institutional agricultural benefits, either due to lack of awareness or administrative targeting bias. Thus, outreach and information campaigns under the Kissan Card initiative should be tailored to ensure that such households—who still maintain partial agricultural engagement—are not left out.
The findings highlighted that farmers who have been provided with digital or technical support throughout the process of Kissan Card registration are considerably more inclined to join the input subsidy program. The result highlights the value of availability as well as the ability to use technology to empower smallholder inclusion within government initiatives. Since numerous farmers across rural Pakistan suffer from constraints like poor levels of digital literacy, limited access to smartphones, or unfamiliarity with SMS/app-based platforms, the availability of support—either through kiosks, experienced facilitators, or local support providers—is vital to provide equitable access to subsidies. This is consistent with earlier observations that process complexity as well as exclusion from aspects of technology hold back the uptake of government-initiated programs by farmers (Gollakota et al. 2022; Ndimbo et al. 2023). Widespread extension of covered electronic support systems, particularly to older, less educated, or isolated farmers, has the potential to significantly increase the availability as well as efficiency of input subsidy programs (Malimi 2023).
Impact of Farmers Participation in Subsidy Program on Adopting Sustainable Agricultural Practices
The Kissan Card Program is a cornerstone of Pakistan's agricultural support strategy, designed to enhance farmers' access to subsidized inputs and promote productivity. By reducing financial barriers, the program directly alleviates liquidity constraints, enabling resource-limited farmers to purchase improved seeds, fertilizers, and other inputs that might otherwise be unaffordable. This mechanism is particularly salient in low-income rural contexts, where immediate cash availability strongly influences input adoption decisions. While the program aims primarily to increase yields and food security, its effects on the adoption of sustainable practices remain less well understood.
Our empirical analysis reveals that subsidy participation significantly shapes farmers' adoption behavior, albeit in a heterogeneous manner. Participation is positively associated with the adoption of improved, high-yield crop varieties (STV), increasing the probability of adoption by approximately 46 percentage points, as indicated in Table 5. These varieties, often characterized by enhanced pest resistance, shorter growing periods, and greater tolerance to environmental stresses, become more accessible to farmers through financial support, aligning closely with the program's productivity-oriented objectives (Koppmair et al. 2017).
TABLE 5 Marginal effects of RBP model estimation on the marginal probability of adopting SAPs.
Model 1
Model 2
Model 3
KCSP
STV
KCSP
IPM
KCSP
OM
Kissan card participation
0.450
−0.376
−0.400
Age
0.000
0.000
0.000
−0.000
0.000
−0.001
Education
0.009
0.003
0.010
0.013
0.010
0.011
Gender
−0.007
0.226
0.016
−0.068
0.010
−0.085
ICT user
0.261
−0.120
0.267
0.170
0.267
0.153
Digital assistance
0.131
0.140
0.137
Remittance recipient
−0.085
−0.076
−0.073
−0.016
−0.069
−0.003
Irrigation access
0.033
−0.040
0.044
0.006
0.019
0.003
Off-farm participation
−0.147
0.077
−0.150
−0.056
−0.153
−0.066
Extension access
−0.011
0.067
−0.022
0.035
−0.029
0.039
Group membership
−0.078
0.076
−0.060
−0.100
−0.056
−0.102
Credit access
−0.083
−0.050
−0.064
0.003
−0.059
−0.005
Land to market distance
−0.010
0.004
−0.010
−0.011
−0.012
−0.013
Livestock ownership
−0.001
0.000
−0.002
−0.001
−0.002
−0.000
Farm size
−0.001
−0.001
−0.004
−0.002
−0.003
−0.002
Conversely, subsidy participation is negatively associated with the use of organic fertilizers (OM) and integrated pest management (IPM) practices, reducing the likelihood of adoption by 40.1 and 39.6 percentage points, respectively. These findings indicate that while the program successfully alleviates financial constraints, it inadvertently encourages reliance on input-intensive conventional practices. Organic and knowledge-intensive approaches, which offer longer-term ecological benefits, become relatively less attractive when chemical inputs are more affordable and easily accessible (Holden and Lunduka 2012; Koppmair et al. 2017; Tambo and Liverpool-Tasie 2024).
This dual effect underscores the complex behavioral responses induced by subsidy-driven interventions. Financial support, while critical for enabling the adoption of modern inputs among liquidity-constrained farmers, may simultaneously discourage sustainable agricultural practices by privileging short-term yield gains over long-term ecological resilience. Improved seed varieties are often optimized for performance under synthetic fertilizer and pesticide regimes, further embedding input-intensive production patterns and reducing incentives to integrate agroecological methods.
From a policy perspective, these results highlight the need to balance productivity goals with sustainability objectives. While the Kissan Card Program effectively enhances access to modern inputs and improves food security, its design may unintentionally undermine long-term soil health, biodiversity, and resilience of farming systems. Policy adaptations could include targeted financial support for organic inputs, technical assistance for IPM, and incentive mechanisms that reward both yield improvements and environmentally sustainable practices. By aligning short-term economic support with long-term sustainability, subsidy programs can more effectively bridge farmers' immediate needs with broader ecological objectives.
In conclusion, this study demonstrates that participation in input subsidy programs has multifaceted impacts: it facilitates the adoption of improved crop varieties through the alleviation of liquidity constraints, but simultaneously discourages sustainable practices such as organic fertilization and IPM. These findings underscore the importance of critically evaluating both the intended and unintended consequences of subsidy interventions, and of designing policies that promote an integrated approach to productivity and sustainability in agriculture.
Conclusion
This study provides compelling evidence on both the enabling and constraining effects of agricultural input subsidy programs, specifically through the lens of the Kissan Card initiative in Punjab, Pakistan. The findings highlight a critical dichotomy: as the program improves access to high-yield crop varieties and enhances short-term agricultural productivity, it inadvertently undermines the adoption of sustainable practices such as integrated pest management (IPM) and organic fertilization. This contradiction raises urgent concerns about the long-term environmental and ecological consequences of subsidy-driven, input-intensive farming systems.
Our econometric results affirm that access to ICT infrastructure and digital facilitation plays a pivotal role in driving farmer participation in subsidy programs. However, structural inequalities, particularly those related to digital exclusion and limited access to resources, continue to marginalize smallholders and less technologically literate populations. These findings call for a substantial policy shift. Policymakers must move beyond one-size-fits-all subsidy models and adopt an inclusive framework that recognizes the heterogeneity of the farming population. This includes allowing independent registration for tenants, simplifying documentation for informal farmers, expanding mobile network coverage, and providing localized digital assistance to ensure equitable access.
More importantly, the study underscores an urgent need to redesign subsidy frameworks to incentivize sustainable intensification rather than short-term yield maximization alone. This entails broadening subsidy coverage to include eco-friendly inputs, bundling financial incentives with training and technical support, and developing hybrid subsidy models that reward both productivity and ecological responsibility. Aligning public support mechanisms with sustainable development goals will be critical to ensuring food security without compromising environmental resilience.
That said, this research is not without limitations. The analysis is based on a cross-sectional dataset, which restricts causal inference and may not fully capture seasonal or regional dynamics in farmer behavior. Furthermore, the study relies on self-reported measures of adoption, which may be prone to recall bias. Future research should utilize longitudinal data and experimental or quasi-experimental designs to validate and extend these findings. In addition, greater attention is needed to explore gendered access to subsidy programs and the role of local governance structures in influencing program effectiveness.
In sum, while subsidy programs like the Kissan Card have made important strides in addressing input access and productivity gaps, their current design risks deepening structural inequities and promoting unsustainable farming practices. A reimagined, sustainability-aligned subsidy policy—one that bridges digital divides, empowers marginalized farmers, and promotes agroecological resilience—is no longer optional, but essential for the future of equitable and sustainable agriculture in Pakistan and beyond.
Funding
This work was supported by Humanities and Social Sciences Talent Research, 2023RCSK002.
Ethics Statement
The authors have nothing to report.
Consent
The authors have nothing to report.
Conflicts of Interest
The authors declare no conflicts of interest.
Data Availability Statement
The data that support the findings of this study are available on request from the corresponding author. The data are not publicly available due to privacy or ethical restrictions.
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