First Carbon Credit Payments Issued to Farmers in Punjab and Haryana for Climate-Smart Agriculture

For the first time in India, around 2,500 farmers in Punjab and Haryana have received a total of ₹2.5 crore as carbon credit payments for adopting climate-smart agricultural practices. This initiative, implemented by Grow Indigo with technical guidance from ICAR, rewards farmers for reducing stubble burning and optimizing fertilizer use.

Overview of the Carbon Credit Payment Program

In a significant development for sustainable agriculture in India, approximately 2,500 farmers from Punjab and Haryana have received carbon credit payments totaling ₹2.5 crore. The initiative incentivizes climate-smart agricultural practices, such as reducing stubble burning and efficient fertilizer management, by providing direct financial rewards based on verified emission reductions.

Key Features of the Program

• Beneficiaries: Over 1,400 farmers from Punjab and the remainder from Haryana participated in the program.
• Payment Structure: Each farmer received between ₹3,000 and ₹15,000, depending on the amount of carbon credits generated.
• Carbon Credits: More than 50,000 carbon credits were generated through practices such as direct seeded rice, zero tillage, and improved residue management.
• Verification: Satellite remote sensing, geo-fencing, and soil sampling were used to monitor and verify the adoption of sustainable practices.

Implementing Agencies and Partnerships

The program is implemented by Grow Indigo, a private agro-tech firm, in partnership with the Indian Council of Agricultural Research's Agricultural Technology Application Research Institute (ICAR-ATARI), Ludhiana. ICAR provided technical guidance, ensuring scientific rigor in the verification process.

Impact on Stubble Burning and Emissions

Punjab, which previously recorded over 83,000 farm fires in 2020, has seen a significant decline in stubble burning incidents, with numbers dropping to less than 5,000 in 2025. The shift from penalizing stubble burning to rewarding emission reductions marks a new approach in agricultural policy.

Future Prospects and Challenges

The carbon credit payment program, initiated in 2019, is designed as an ongoing initiative to encourage sustained adoption of climate-smart practices. Scaling up the program to more states and crops could further reduce agricultural emissions. Key challenges include ensuring equitable access for small and marginal farmers, maintaining verification standards, and integrating with broader carbon markets.

Key Concepts

• Carbon Credit: A tradable certificate representing the reduction of one tonne of carbon dioxide or equivalent greenhouse gases.
• Direct Seeded Rice (DSR): A water-saving rice cultivation method that reduces methane emissions.
• Geo-Fencing: Technology used to monitor field boundaries and detect activities such as stubble burning.

Note:

This program is distinct from the agroforestry-based carbon credit scheme launched in August 2024, which focuses on payments for tree planting and maintenance.

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