Farmers Are Getting Paid for Building Soil Carbon, How Does It Work?

More than 2,500 farmers in Punjab and Haryana are receiving over ₹2.9 crore through a farm carbon programme linked to regenerative agricultural practices. The payments are based on verified carbon credits generated from changes in farming practices, making this one of India’s first direct links between soil carbon and farmer payments.

The programme, called Aadi, was launched in 2019 with technical guidance from ICAR. Farmers adopted practices including direct-seeded rice, reduced tillage and crop-residue management between 2019 and 2022. Changes in greenhouse-gas emissions and soil carbon were measured and independently verified before credits were issued.

Soil carbon refers to carbon stored in soil organic matter. Agricultural practices can affect how much carbon remains in the soil and how much greenhouse gas is released from farming activities.

The carbon programme measures changes linked to specific farming practices. Farmers are not paid simply because their soil contains carbon. Payments depend on verified carbon credits generated from documented changes in farming and the resulting environmental outcomes.

The participating farmers used practices including direct-seeded rice, reduced or minimum tillage and better crop-residue management. These practices can change water use, soil disturbance and emissions compared with conventional methods.

The programme also covers practices such as residue retention and more efficient fertiliser use. The exact practices and their carbon benefits need to be measured rather than assumed. This makes documentation and verification an important part of the process.

How are farmers paid?

Farmers receive payments based on their share of the carbon credits generated from their fields. The first issuance covered around 30,000 acres and generated more than 50,000 carbon credits, with participating farmers receiving approximately ₹3,000 to ₹15,000.

Grow Indigo said farmers could choose an assured upfront payment or receive 75% of net carbon revenue after the credits were sold. The first payments were released before the credits were fully sold.

Carbon payments require more than a farmer saying that a particular practice was followed. The programme used several forms of measurement and verification to establish changes in emissions and soil carbon.

ICAR institutions contributed to greenhouse-gas accounting, soil-sampling protocols, crop modelling, field-team training and remote-sensing methods. The carbon credits were independently verified before they were issued.

Satellite and remote-sensing systems can help track changes across large agricultural areas. The programme has used satellite information and geo-fencing as part of its monitoring process.

Soil sampling also provides field-level information about soil properties, including soil organic carbon. Combining field measurements with digital monitoring can help establish whether reported farming practices and environmental changes match the carbon-credit methodology.

No. A farmer can adopt regenerative or carbon-focused practices without converting the farm to certified organic agriculture. Direct-seeded rice, reduced tillage and residue management can be part of a carbon-farming programme. Organic certification involves separate standards covering inputs, production methods and certification procedures.

Farmers should therefore not assume that receiving a soil-carbon payment means their produce is certified organic. The two systems have different requirements and purposes.

What happened to crop residue?

Crop-residue management is one of the major practices in the programme. Farmers can retain, incorporate or otherwise manage residues instead of burning them in the field.

The government says the enrolled fields during 2019-2022 saved an estimated 45 billion litres of water and kept more than two lakh tonnes of crop residue out of fires. It estimates that this avoided about 1,000 tonnes of PM2.5 emissions.

Direct-seeded rice can reduce the need for water compared with conventional transplanted rice because farmers do not establish seedlings in a nursery and then transplant them into flooded fields.

The carbon programme included DSR among the practices adopted by participating farmers. Its suitability still depends on soil, weed management, rainfall, equipment, farm conditions and local recommendations.

Farmers should not adopt DSR only because it can generate carbon credits. The production and cost effects also need to be considered.

The current payments involve farmers enrolled in the Aadi programme. The first payment cycle covered 2,550 farmers from Punjab and Haryana.

The wider programme covers more than 100,000 farmers across seven states and more than two million acres, according to the Agriculture Ministry. Farmers who joined after 2022 are part of a later monitoring cycle and will receive payments as their credits are issued.

No. Payments are linked to the carbon credits attributed to participating farmers rather than simply being a fixed payment per acre. The first set of participating farmers received different amounts. The government reported payments of roughly ₹3,000 to ₹15,000, while individual cases reported by The Indian Express included farmers receiving amounts such as ₹5,700 and ₹9,075.

This means farmers should be careful with claims that carbon farming guarantees a particular income per acre. Actual payments depend on the verified credits generated and the programme’s payment arrangement.

What does verification mean for farmers?

Farmers participating in such programmes need to follow specified practices and provide information that allows those practices to be documented and assessed.

The Aadi programme used several years of monitoring before the first credits were issued. Farmers who adopted practices between 2019 and 2022 received payments after measurement and independent verification were completed.

This also means carbon payments may not arrive immediately after a farmer changes a farming practice. Measurement, verification and credit issuance can take time.

The first payments show that verified environmental outcomes can generate a financial return for participating farmers. But carbon income should not be treated as a guaranteed replacement for crop income.

Farmers need to understand the contract, eligible practices, measurement process, payment formula and timing before joining a carbon programme.

They should also compare any required changes in cultivation costs with the expected carbon payment. A practice should make sense for the farm even when the carbon payment is delayed or lower than expected.