India’s First Soil Carbon Credit Payments Put Farmers at the Centre of Regenerative Agriculture

India’s agricultural carbon market has moved from policy to the producers, with more than 2,500 smallholder farmers in Punjab and Haryana receiving digital payments for adopting regenerative farming practices. The first payments were released in a program organised at Punjab Agricultural University (PAU), Ludhiana, marking a new link between sustainable farming and additional farmer income. Dr M. L. Jat, Secretary, DARE & Director General, ICAR, clicked the direct benefit transfer (DBT) to 2550 farmers of Punjab and Haryana. Over Rs 2.9 crore were disbursed to these farmers.

The payments are part of ‘Aadi’, a Grow Indigo farmer carbon programme launched in 2019 with technical guidance from ICAR. Farmers adopted practices including 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. Aadi is the first flagship farmer carbon programme in India to issue agricultural carbon credits under the Verra VM0042 methodology, covering more than two million acres and over 100,000 farmers across seven states.

The programme builds on a broader transition underway in Punjab and Haryana. It comprises managing crop residue, conserving water and adopting regenerative farming systems that can improve soil health and climate resilience. ICAR institutions have supported the strong scientific and field framework, including greenhouse-gas accounting, crop-simulation modelling, soil-sampling protocols, device validation, field-team training and satellite and remote-sensing approaches. ICAR-Indian Agricultural Research Institute (IARI), New Delhi, contributed to these processes, while Grow Indigo is also working with ICAR-Agricultural Technology Application Research Institute (ATARI), Zone 1, to promote regenerative agriculture.

Shivraj Singh Chouhan, Hon’ble Union Minister of Agriculture and Farmers Welfare, has been emphasizing farmer-centric agricultural research and policy. During his June 2025 visit to Kheri and KVK Patiala under the Viksit Krishi Sankalp Abhiyan and several other visits during last one year at Ludhiana, Sangrur, Fatehgarh Sahib, Moga, Jalandhar, Amritsar where he observed field demonstrations on Regenerative Agriculture practices, interacted with farmers, and lauded scientists to actively advance regenerative agriculture. He described Regenerative Agriculture as a “Sanjeevani” for Punjab’s depleting groundwater and stressed the need for technologies such as Happy Seeder-sown wheat and residue-management practices in potato and mustard, highlighting their contribution to soil organic carbon, fertility, nutrient-use efficiency, and long-term sustainability. 

The carbon payments add an economic incentive to practices that also deliver environmental benefits. Compared with conventional transplanting, DSR can reduce irrigation requirements, while improved residue management can 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 about 1,000 tonnes of PM2.5 emissions.

Farmers were paid according to their share of the 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 money without waiting for sale proceeds. Farmers could choose an assured upfront payment or 75% of the net carbon revenue after the credits were sold. The first issuance covered around 30,000 acres and more than 50,000 carbon credits, with participating farmers receiving approximately Rs 3,000-15,000.

The payments followed a multi-year process of measurement and independent verification. Farmers who joined after 2022 are part of the next monitoring cycle and will be paid as their credits are issued.

Dr M. L. Jat said, “This is a landmark for Indian agriculture. It shows that climate-smart practices, backed by sound science and rigorous verification, can put real, additional income into the hands of our smallholder farmers, while saving water and improving air quality. ICAR is proud to have supported the science behind this milestone, and I congratulate the farmers whose efforts have made it possible.”

Dr. Usha Barwale Zehr, Executive Director, Grow Indigo, described the payment as the first instance in India of farmers being paid for carbon stored in their soil, and credited farmers for their trust and patience during the scientific assessment and verification process. Farmer Harinderjeet Gill of Nurpur Bet, Ludhiana, said the payment strengthened his confidence in continuing the practices. Amandeep Kaur of Sangrur said avoiding crop-residue burning improves soil health and benefits people and the environment, and that being rewarded through carbon credits was encouraging.

The initiative sits within a wider agricultural transformation supported by ICAR, agricultural universities, KVKs and state institutions. These field experiences provide a foundation for wider adoption of practices such as residue retention, minimum soil disturbance, DSR, diversified cropping, improved soil biology and efficient water use, leading to farming systems in which sustainability and productivity reinforce each other rather than being treated as separate goals.

Punjab’s farm-fire incidents declined from more than 83,000 in 2020 to fewer than 5,000 in 2025. The Ransinh Kalan model in Moga where the village maintained 100% residue-burning-free status across 1,310 acres for six consecutive years, demonstrates how sustained residue-management efforts can support soil-health and conservation goals. The progression from residue management and DSR towards regenerative agriculture and carbon farming reflects an effort to connect environmental stewardship with farm-level economic value.

The significance of these developments are clearly aligned with India’s vision. Under the leadership of Hon’ble Prime Minister Narendra Modi, the BRICS New Delhi Declaration, adopted on 12 September 2026, welcomed the strengthening of the BRICS agricultural cooperation framework through the Network of Centres of Excellence on Agroecology and Regenerative Agriculture for Climate Resilience and Productivity, with initial coordination by ICAR-Indian Institute of Farming System Research (IIFSR), Modipuram. The initiative complements the BRICS Network on Digital Agriculture and underscores the importance of sustainable agricultural practices, food security, climate resilience, and the central role of smallholder and family farmers.

The Ludhiana milestone brings together three interconnected dimensions of India’s agricultural transformation: the vision of farmer-centric, field-based policy and “Lab-to-Land” science; ICAR’s sustained work through ATARIs, KVKs and research institutions to convert that vision into field-level technologies and behavioural change; and the BRICS platform to take successful approaches in agroecology and regenerative agriculture to a wider international level.