New Delhi: India’s agricultural carbon market has moved from policy to the farm level, with over Rs 2.9 crore to be distributed among 2,550 small farmers in Punjab and Haryana through digital payments for adopting regenerative farming practices, according to a statement issued by the Ministry of Agriculture on Wednesday.
The first payments were released at a programme organised at Punjab Agricultural University (PAU) in Ludhiana, marking a new link between sustainable agricultural practices and additional income for farmers.
Dr ML Jat, Secretary, Department of Agricultural Research and Education (DARE) and Director General, ICAR, initiated the Direct Benefit Transfer (DBT) to the farmers.
The first issuance covered around 30,000 acres and more than 50,000 carbon credits, with participating farmers receiving approximately Rs 3,000 to Rs 15,000 each. The payments are part of ‘Aadi’, a Grow Indigo farmer carbon programme launched in 2019 with technical guidance from ICAR.
Under the programme, farmers adopted practices such as 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.
The programme 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.
It builds on a broader transition towards regenerative agriculture in Punjab and Haryana, including crop residue management, water conservation and farming systems aimed at improving soil health and climate resilience.
ICAR institutions have contributed scientific and field expertise in areas including greenhouse gas accounting, crop-simulation modelling, soil-sampling protocols, device validation, field-team training, and satellite and remote-sensing approaches.
Dr Jat said the initiative demonstrates how climate-smart farming practices, backed by scientific assessment and rigorous verification, can create additional income opportunities for small farmers while contributing to water conservation and improved air quality.
The carbon payments provide an economic incentive for practices that can also generate environmental benefits. Direct Seeded Rice can reduce irrigation requirements compared with conventional transplanting, while improved crop-residue management can help reduce stubble burning and associated air pollution.
For enrolled 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 the carbon credits generated from their fields. Grow Indigo released the payments digitally from its own funds before the credits were fully sold, enabling farmers to receive the payments without waiting for sale proceeds.
Farmers could choose between an assured upfront payment and 75 per cent of the net carbon revenue after the credits were sold.
The payments followed a multi-year process of measurement and independent verification. Farmers who joined the programme after 2022 are part of the next monitoring cycle and will receive payments as their carbon credits are issued.