India makes first soil carbon payments to farmers in Punjab, Haryana

India makes first soil carbon payments to farmers in Punjab, Haryana

India has moved its agricultural carbon market from policy to the farm level, with more than 2,500 smallholder farmers in Punjab and Haryana set to receive over ₹2.9 crore in digital payments for adopting regenerative farming practices.

The first payments were released at a programme held at Punjab Agricultural University (PAU), Ludhiana, where Dr M. L. Jat, Secretary, Department of Agricultural Research and Education (DARE) and Director General, Indian Council of Agricultural Research (ICAR), initiated Direct Benefit Transfer (DBT) payments to 2,550 farmers from the two states.

The payments are linked to the ‘Aadi’ farmer carbon programme, launched by Grow Indigo in 2019 with technical guidance from ICAR. Under the programme, farmers adopted practices including Direct Seeded Rice (DSR), reduced tillage and crop-residue management between 2019 and 2022.

The resulting greenhouse-gas reductions and increases in soil carbon were measured and independently verified before carbon credits were issued.

Carbon credits linked to regenerative farming

The Aadi programme currently covers more than two million acres and over 100,000 farmers across seven states and has issued agricultural carbon credits under the Verra VM0042 methodology.

The initiative is part of a wider transition towards regenerative agriculture in Punjab and Haryana, focusing on crop-residue management, water conservation and farming practices aimed at improving soil health and climate resilience.

ICAR institutions have provided scientific and field expertise for greenhouse-gas accounting, crop-simulation modelling, soil-sampling protocols, device validation, field-team training and satellite and remote-sensing approaches.

The ICAR-Indian Agricultural Research Institute (IARI), New Delhi, has contributed to these processes, while Grow Indigo is also working with ICAR-Agricultural Technology Application Research Institute (ATARI), Zone 1, to promote regenerative agriculture.

Farmers receive up to ₹15,000

The carbon payments provide an economic incentive for farming practices that can also generate environmental benefits.

According to the programme, DSR can reduce irrigation requirements compared with conventional transplanting, while improved crop-residue management can help reduce stubble burning and associated air pollution.

For participating fields during 2019–2022, the programme estimates savings of 45 billion litres of water and more than two lakh tonnes of crop residue kept out of fires, avoiding an estimated 1,000 tonnes of PM2.5 emissions.

Farmers were paid according to their share of carbon credits generated from their fields. Grow Indigo released the payments digitally from its own funds before the credits were fully sold, allowing farmers to receive payments without waiting for sale proceeds.

Participating farmers could choose between an assured upfront payment and 75 per cent of the net carbon revenue after the credits were sold.

The first issuance covered around 30,000 acres and more than 50,000 carbon credits, with individual farmers receiving approximately ₹3,000 to ₹15,000.

Farmers who joined the programme after 2022 are part of the next monitoring cycle and will receive payments once their carbon credits are issued.

ICAR highlights farmer-centric climate action

Dr M. L. Jat said the initiative demonstrated how climate-smart agricultural practices, supported by scientific assessment and rigorous verification, could create additional income opportunities for smallholder farmers while contributing to water conservation and improved air quality.

He congratulated the participating farmers and acknowledged the contribution of ICAR institutions to the scientific framework supporting the initiative.

The initiative also follows the emphasis on farmer-centric agricultural research and sustainable technologies during Union Agriculture and Farmers’ Welfare Minister Shivraj Singh Chouhan’s visits to Punjab under the Viksit Krishi Sankalp Abhiyan and subsequent engagements with farmers and agricultural institutions.

During his June 2025 visit to Punjab, Chouhan interacted with farmers and reviewed farming practices, including direct-seeded rice and crop-residue management.