Farmers Begin Earning from Soil Carbon as Sustainable Farming Gains Ground
India has taken a significant step towards connecting sustainable farming with additional farm income, with more than 2,500 farmers in Punjab and Haryana set to receive over ₹2.9 crore through soil-carbon payments.
The payments mark an important development in India’s emerging agricultural carbon market, where farmers can benefit financially from adopting farming methods that reduce greenhouse-gas emissions, conserve natural resources and improve soil health.
The first payments were initiated through Direct Benefit Transfer (DBT) to 2,550 farmers at a programme held at Punjab Agricultural University in Ludhiana. The initiative has been supported by the Indian Council of Agricultural Research (ICAR) and Grow Indigo through its ‘Aadi’ farmer carbon programme.
Under the programme, participating farmers adopted practices including Direct Seeded Rice (DSR), reduced tillage and improved crop-residue management between 2019 and 2022. The environmental benefits generated through these practices were measured and independently verified before carbon credits were issued.
The programme currently covers more than two million acres and over one lakh farmers across seven states. Agricultural carbon credits have been issued under the Verra VM0042 methodology.
The initiative is designed to create an additional source of income for farmers while encouraging agricultural practices that can reduce pressure on water resources and improve environmental conditions.
DSR, for instance, can lower irrigation requirements compared with conventional rice transplanting. Better management of crop residues can also reduce the need for stubble burning, which has been a major source of seasonal air pollution in northern India.
For participating fields during the 2019–2022 period, the programme estimates that around 45 billion litres of water were saved and more than two lakh tonnes of crop residue were kept away from burning. These practices are estimated to have helped avoid around 1,000 tonnes of PM2.5 emissions.
The payments are linked to the carbon credits generated from individual farms. Farmers were given payment options, including an assured upfront amount or a share of the net revenue generated from carbon-credit sales.
The first issuance covered approximately 30,000 acres and generated more than 50,000 carbon credits. Participating farmers received payments ranging from about ₹3,000 to ₹15,000, depending on their contribution to the credits generated.
Grow Indigo released the payments digitally from its own funds, allowing farmers to receive the money without having to wait until the carbon credits were completely sold.
Farmers who joined the programme after 2022 are currently part of subsequent monitoring cycles and are expected to receive payments as their carbon credits are issued and verified.
The scientific foundation of the programme has involved several ICAR institutions, including ICAR-Indian Agricultural Research Institute (IARI), which has contributed to greenhouse-gas accounting, soil sampling, crop modelling, technology validation and field-level assessment.
ICAR institutions, agricultural universities, Krishi Vigyan Kendras and state agencies are also supporting the wider adoption of regenerative farming practices such as residue retention, minimum tillage, diversified cropping, improved soil biology and efficient water management.
The initiative comes at a time when Punjab is also reporting a substantial decline in farm-fire incidents. Government data shows that the state recorded 5,114 farm-fire incidents during the 2025 paddy harvesting season, the lowest level recorded under the current monitoring framework. This represented a 93 per cent reduction compared with 2021.
The development also fits into India’s broader efforts to strengthen international cooperation on sustainable agriculture. The BRICS Agriculture Ministers’ Meeting held in Indore in June 2026 agreed to establish a BRICS Network of Centres of Excellence on Agroecology and Regenerative Agriculture for Climate Resilience and Productivity, with initial coordination by ICAR-IIFSR, Modipuram.
The soil-carbon payment programme therefore brings together farm-level technology, scientific measurement and new income opportunities, creating a model in which environmental improvements can potentially translate into direct economic benefits for farmers.