Farmers Get Paid for Soil Carbon: How Does the New Income Model Work?

Farmers in Punjab and Haryana are receiving payments for adopting farming practices that increase soil carbon and reduce greenhouse gas emissions. The first payments were released on September 17, with more than 2,500 farmers set to receive over ₹2.9 crore under a farmer carbon programme.

The payments mark a new way for farmers to earn from environmental outcomes linked to farming. The participating farmers used practices such as Direct Seeded Rice, reduced tillage and crop-residue management. Their carbon gains and emissions reductions were measured and independently verified before credits were issued.

The programme, called Aadi, began in 2019 with technical guidance from ICAR. Farmers adopted specified farming practices between 2019 and 2022, while scientists and technical teams measured changes in soil carbon and greenhouse gas emissions from participating fields.

Once the results were measured and independently verified, carbon credits were issued. Farmers then received a share of the revenue generated from credits linked to their fields. This connects specific changes in farm practices with a financial payment tied to verified carbon outcomes.

Participating farmers used Direct Seeded Rice, reduced tillage and crop-residue management. These practices can change how farmers use water, disturb soil and manage residue after harvesting.

Direct Seeded Rice places rice seed directly into the field instead of raising seedlings and transplanting them. Reduced tillage limits soil disturbance, while residue management keeps crop material from being burned or removes it through other planned methods.

How much are farmers receiving?

The first carbon-credit issuance covered around 30,000 acres and generated more than 50,000 carbon credits. Participating farmers received approximately ₹3,000 to ₹15,000, depending on their share of the credits generated from their fields.

The programme says farmers could choose between an assured upfront payment or 75% of net carbon revenue after the credits were sold. Grow Indigo released payments from its own funds before the credits were fully sold.

Carbon payments cannot be calculated simply by recording that a farmer changed a cultivation method. The programme first had to measure the resulting changes in soil carbon and greenhouse gas emissions.

The results then underwent independent verification before carbon credits were issued. Farmers who joined after 2022 are part of a later monitoring cycle and will receive payments when their credits are issued.

Soil carbon is assessed through field sampling and other scientific methods that estimate changes in carbon stored in agricultural soils. ICAR institutions contributed expertise in soil-sampling protocols, greenhouse-gas accounting, crop modelling and satellite and remote-sensing approaches.

The programme used these measurements to establish the environmental outcomes associated with participating fields. Independent verification was required before the results could support issuance of carbon credits.

How many farmers are involved?

The first payment covers 2,550 farmers from Punjab and Haryana. The wider Aadi programme covers more than 100,000 farmers across seven states and more than two million acres.

The programme has issued agricultural carbon credits under the Verra VM0042 methodology. Farmers participating in later cycles will receive payments when their carbon credits complete the required monitoring and issuance process.

Carbon programmes do not necessarily require farmers to switch to a completely different crop. In this programme, the focus was on changing specific cultivation practices, including Direct Seeded Rice, reduced tillage and crop-residue management.

The financial return depends on the amount of verified carbon benefit associated with participating fields. Farmers therefore need to understand both the required practices and the payment mechanism before joining a carbon programme.

The programme estimates that participating fields between 2019 and 2022 saved about 45 billion litres of water. It also reports that more than two lakh tonnes of crop residue were kept out of fires, avoiding an estimated 1,000 tonnes of PM2.5 emissions.

These figures are programme estimates for the enrolled fields and period. They connect the carbon programme with other environmental outcomes, including water use and crop-residue management.

Does Direct Seeded Rice save water?

Direct Seeded Rice can reduce irrigation requirements compared with conventional transplanted rice because it avoids the water-intensive process of maintaining standing water during transplanting and establishment.

Actual water savings vary with soil, rainfall, irrigation practices, weed management and local conditions. Farmers considering DSR need to account for these factors rather than assuming that every field will achieve the same reduction.

Farmers who joined the programme after 2022 are currently part of a later monitoring cycle. Their fields must go through the measurement and verification process before the related carbon credits are issued.

This means participation does not necessarily result in an immediate payment. Farmers need to understand the monitoring period, verification process, payment terms and revenue-sharing arrangement before committing to a carbon programme.

The programme says the changes in soil carbon and greenhouse gas emissions were independently verified before carbon credits were issued. This step matters because carbon payments depend on claims that need measurement rather than simply reporting a change in farming practice.

ICAR contributed scientific expertise to the measurement framework, while the carbon credits were issued under the Verra VM0042 methodology.

Can every farmer start earning carbon payments?

No. Farmers generally need to participate in a specific carbon programme with defined practices, monitoring requirements and verification procedures.

Farmers should first find out who runs the programme, which practices are required, how the baseline is calculated, how long monitoring continues, who owns or receives the carbon credits and how revenue will be shared.

What should farmers check before joining?

Farmers should ask several questions before signing a carbon-farming agreement:

• Which farming practices are mandatory?
• How will soil carbon be measured?
• Who pays for measurement and verification?
• Who owns the carbon credits?
• How is the farmer’s payment calculated?
• When will payments be made?
• What happens if the farmer leaves the programme?
• Who carries the risk if credits are not issued?

These details can affect the actual income a farmer receives.

The Aadi programme already covers more than 100,000 farmers across seven states. The first payments in Punjab and Haryana provide an early example of how verified farm-level environmental outcomes can be linked with direct payments.

Expansion will depend on measurement costs, verification systems, carbon-credit demand, farmer participation and the ability of programmes to maintain reliable data across large numbers of farms.

What does this mean for farmers?

The first soil-carbon payments show that some farmers can receive money for adopting practices that produce measurable environmental outcomes. The payment is not simply a reward for following a sustainable farming method. It depends on measured and verified carbon results.

For farmers considering such programmes, the key issue is the agreement behind the payment. Understanding the farming requirements, monitoring process, credit ownership and revenue-sharing terms is as important as knowing the potential payment amount.

The first payments in Punjab and Haryana provide a working example of this model. More than 2,500 farmers are set to receive over ₹2.9 crore, while farmers who joined later remain in subsequent monitoring cycles.

For Indian farmers, carbon markets could create another income stream, but participation requires clear contracts and reliable measurement. The next question is not only how much carbon a field can store, but how much of the resulting carbon-credit value actually reaches the farmer.