Pratidin
Environment and geography18 September 2026PIB, Environment

India's first payments to farmers for soil carbon

Farmers in Punjab and Haryana paid for carbon stored in their soil.

Published 18 September 2026. Written by Pratidin from the reports linked at the end; every fact checked by a separate review before publishing. How we work

More than 2,550 small farmers in Punjab and Haryana received over ₹2.9 crore through direct benefit transfer, India's first farm-level payments for verified soil carbon. The payments, averaging ₹3,000 to ₹15,000 per farmer, came through the 'Aadi' programme of Grow Indigo, a joint venture of Mahyco and US-based Indigo Ag.

Stubble burning in a field.
Stubble burning in a field. John Rostron, CC BY-SA 2.0, via Wikimedia Commons

Farmers earned credits by adopting direct seeding of rice, minimum tillage, cover crops and keeping crop residue in the field instead of burning it. Changes in soil carbon and emissions were tracked through satellites, crop models and soil sampling, and credits were issued under Verra's VM0042 standard, the first agricultural credits in India under it. Farmers receive upfront payments or 75% of net proceeds from selling the credits in the voluntary carbon market.

The first payments cover 2019 to 2022 on about 30,000 acres, generating over 50,000 credits. The programme estimates it saved about 45 billion litres of groundwater, kept over 2 lakh tonnes of paddy straw from being burnt and avoided about 1,000 tonnes of PM2.5 emissions.

Practise this in the app: flashcards, quiz and a timed answer
Prelims

Prelims facts

  • Soil carbon credits reward farmers for storing carbon in soil and reducing emissions through changed farm practices.
  • Direct Seeded Rice (DSR) saves water and labour compared with transplanted paddy.
  • India's Carbon Credit Trading Scheme, 2023 provides a framework for a domestic carbon market.

Quick recall

How many farmers received India's first soil carbon payments?
More than 2,550 in Punjab and Haryana, receiving over ₹2.9 crore.
Which programme made the payments?
Grow Indigo's 'Aadi' programme; Grow Indigo is a joint venture of Mahyco and Indigo Ag.
Under which standard were the credits issued?
Verra's VM0042.
Name the practices that earned the credits.
Direct seeding of rice, minimum tillage, cover crops and keeping residue instead of burning it.
What period do the first payments cover?
2019 to 2022, on about 30,000 acres.
What share of net proceeds can farmers receive?
75% of net carbon-sale proceeds, or upfront payments.
How much groundwater did the programme estimate it saved?
About 45 billion litres.
Which Indian scheme sets up a domestic carbon market?
The Carbon Credit Trading Scheme, 2023.

Prelims practice question

Direct Seeded Rice (DSR) is promoted mainly because it:

  1. Increases methane emissions
  2. Saves water and labour compared with transplanting
  3. Requires more fertiliser
  4. Needs continuous flooding
Show answer

Answer: (b) Saves water and labour compared with transplanting. DSR avoids nursery raising and puddling, saving water and labour and cutting methane from flooded fields.

Use this in UPSC Mains: previous-year questions

Recurring theme: Carbon markets, sustainable agriculture and climate mitigation in farming

  1. 2020 · GS3 · 15 marksCovers one partUse it in the conclusion

    What are the major factors responsible for making rice-wheat system a success? In spite of this success how has this system become bane in India?

    How to use this

    Offers a market-based remedy for the rice-wheat system's harms: paying farmers for water-saving, no-burn practices.

    • Over 2,550 small farmers in Punjab and Haryana received over ₹2.9 crore for adopting direct seeding of rice, minimum tillage, cover crops and residue retention instead of burning.
    • The programme estimates it saved about 45 billion litres of groundwater, kept over 2 lakh tonnes of paddy straw from being burnt and avoided about 1,000 tonnes of PM2.5.
    • Direct seeded rice saves water and labour compared with transplanted paddy.
  2. 2014 · GS3 · 12.5 marksCovers one partUse it in the body

    Should the pursuit of carbon credits and clean development mechanisms set up under UNFCCC be maintained even though there has been a massive slide in the value of a carbon credit? Discuss with respect to India's energy needs for economic growth.

    How to use this

    Lets you weigh whether carbon credit markets deliver value to Indian farmers, with a current case and its limits.

    • India's first farm-level soil carbon payments, under Grow Indigo's 'Aadi' programme and Verra's VM0042 standard, averaged ₹3,000 to ₹15,000 per farmer; farmers get upfront payments or 75% of net credit proceeds.
    • The first payments cover 2019 to 2022 on about 30,000 acres, generating over 50,000 credits.
    • Flag volatile voluntary market prices, contested credibility, costly verification and small payouts; India's Carbon Credit Trading Scheme, 2023 offers a domestic framework.
Also asked on this theme
  1. 2018 · GS3 · 10 marks

    Sikkim is the first 'Organic State' in India. What are the ecological and economical benefits of Organic State?

    Regenerative practices rewarded by soil carbon payments share the ecological and economic logic of organic farming.

Prelims
  1. 2023 · Prelims

    Consider the following activities: 1. Spreading finely ground basalt rock on farmlands extensively 2. Increasing the alkalinity of oceans by adding lime 3. Capturing carbon dioxide released by various industries and pumping it into abandoned subterranean mines in the form of carbonated waters How many of the above activities are often considered and discussed for carbon capture and sequestration?

    Tests carbon removal methods, including farmland-based sequestration, the idea behind paying for soil carbon.

Mains practice question

Can carbon markets make sustainable agriculture profitable for small farmers in India? Examine. (150 words)

Model answer

Soil carbon markets pay farmers for practices that store carbon in soil or cut emissions. India's first payments went to over 2,550 small farmers in Punjab and Haryana.

Potential

  • Extra income for adopting DSR, less tillage and residue retention.
  • Co-benefits: groundwater saved, less stubble burning, better soil health.
  • Aligns with India's climate goals and the Carbon Credit Trading Scheme, 2023.

Challenges

  • Measurement: verifying soil carbon on small plots is costly and uncertain.
  • Permanence: carbon can be lost if practices stop.
  • Small payouts: a few thousand rupees per farmer may not offset yield risks.
  • Intermediaries may capture much of the value.
  • Voluntary market prices are volatile and credibility is contested.

Way forward

Farmer producer organisations to aggregate, low-cost satellite-based verification, public standards and a fair share of revenue for farmers.

Carbon payments can support, not replace, public policy for sustainable farming.

The basics

Why this matters

More than 2,550 farmers in Punjab and Haryana were paid over ₹2.9 crore for carbon stored in their soil, India's first farm-level soil carbon payments. It links climate finance, groundwater and stubble burning in one example.

₹2.9 crore+
Paid to over 2,550 farmers for verified soil carbon
Under Grow Indigo's Aadi programme, via direct benefit transfer.

How a soil carbon credit is made

Credits require measurement and verification.

From field to payment
  1. 1Change practicesDSR, less tilling, cover crops, no burning.
  2. 2MeasureSatellites, models and soil samples.
  3. 3VerifyUnder Verra's VM0042 standard.
  4. 4SellIn the voluntary carbon market.
  5. 5PayFarmers get upfront payments or 75% of net proceeds.

The practices

Each practice stores carbon or cuts emissions.

Regenerative practices
  1. 1Direct seeded riceSaves water, cuts methane
  2. 2Minimum tillageLess soil disturbance
  3. 3Cover cropsAdds organic matter
  4. 4Residue retentionNo burning; carbon back in soil

Benefits and doubts

It is promising but not simple.

Soil carbon credits
Benefits
  • Extra farmer income
  • Less groundwater use
  • Less stubble burning
vs
Doubts
  • Hard to measure on small plots
  • Carbon can be lost again
  • Small payments per farmer

The wider market

India's Carbon Credit Trading Scheme creates a domestic market, while this programme sold into the Voluntary carbon market. Practices like Direct seeded rice are part of Regenerative agriculture.

You now know

  • Over 2,550 farmers in Punjab and Haryana received over ₹2.9 crore.
  • Credits were issued under Verra's VM0042 standard.
  • First payments cover 2019 to 2022 on about 30,000 acres.
  • India's domestic carbon market is the Carbon Credit Trading Scheme, 2023.

Go deeper

In one line: Farmers in Punjab and Haryana have been paid, for the first time in India, for carbon stored in their soil through climate-friendly farming.

Why it matters for UPSC

GS3 (environment, agriculture, climate finance). It links carbon markets, groundwater and stubble burning in one example.

The core idea

A carbon credit represents a tonne of carbon dioxide kept out of the air or stored. Farmers who switch to practices like direct seeded rice, less tilling and keeping crop residue can store carbon in soil and cut emissions. If this is measured and verified, credits can be sold, and part of the money returns to farmers. The challenges are that measuring carbon on small plots is costly, carbon can be released again if practices stop, and payments per farmer are small.

Numbers and dates to remember

  • 2,550+ farmers, over ₹2.9 crore paid.
  • 2019 to 2022: first payment period; about 30,000 acres.
  • About 45 billion litres of groundwater saved (programme estimate).

Where to go next

In one line: Soil carbon payments can reward good farming, but only if measurement is credible and payments reach farmers fairly.

Measurement challenge

Soil carbon varies across a field and over time; models and sampling must be robust to avoid overstating credits.

Permanence

If farmers return to tilling or burning, stored carbon can be released, so contracts need long-term commitments.

Fairness

Farmers must understand contracts and receive a fair share of revenue.

Policy links

The Carbon Credit Trading Scheme could include agriculture in future; the Voluntary carbon market faces scrutiny over quality; Direct seeded rice and Regenerative agriculture offer co-benefits for water and air.

Where to go next

Carbon Credit Trading Scheme

India's carbon market

In one line: The Carbon Credit Trading Scheme, 2023 sets up India's domestic carbon market under the Energy Conservation Act.

Two parts

A compliance mechanism with emission intensity targets for heavy industries, and an offset mechanism for voluntary projects.

Administrator

The Bureau of Energy Efficiency, with the Grid Controller of India as registry.

Aim

Lower emissions at the lowest cost.

Where to go next

Direct seeded rice

Saving water in paddy

In one line: Direct seeded rice means sowing rice seeds directly in the field instead of transplanting seedlings.

Benefits

Saves water and labour, and reduces methane emissions from flooded fields.

Challenges

Weed control and farmer familiarity.

Support

Punjab and Haryana offer incentives per acre.

Where to go next

Voluntary carbon market

How credits are traded

In one line: In the voluntary carbon market, companies buy carbon credits to offset emissions by choice, not by law.

Standards

Verra, Gold Standard and others certify credits.

Criticism

Some credits have been found to overstate reductions, leading to calls for stricter standards.

Relevance

India's first soil carbon credits were sold in this market.

Where to go next

Regenerative agriculture

Farming that rebuilds soil

In one line: Regenerative agriculture uses farming practices that rebuild soil health.

Practices

Minimum tillage, cover crops, crop rotation, residue retention and reduced chemical use.

Benefits

More soil organic carbon, better water retention and biodiversity.

In India

Natural farming missions and carbon programmes promote these practices.

Where to go next

Take the 18 September 2026 quiz: 30 Prelims-style questions with answers

Syllabus

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