Punjab and Haryana farmers are not just earning from their crops. 2,550 farmers get Rs 2.9 crore through this facility

For generations, a farmer’s income has largely depended on what can be grown and harvested from the land. Now, the soil itself is beginning to have an economic value. In a first for India, 2,550 farmers from Punjab and Haryana are receiving more than Rs 2.9 crore through payments linked to verified soil-carbon credits, after adopting farming practices that reduce emissions and improve soil health. The development is part of a growing effort to connect climate-friendly agriculture with an additional source of income for farmers.

Farmers Paid For Changing How They Farm

The payments are being made under Aadi, a farmer-carbon programme launched by Grow Indigo in 2019 with technical guidance from the Indian Council of Agricultural Research (ICAR). Participating farmers adopted practices including direct-seeded rice (DSR), reduced tillage and better crop-residue management between 2019 and 2022. These changes can reduce greenhouse-gas emissions while helping retain more carbon in agricultural soil.

Before credits were issued, the resulting changes in greenhouse-gas emissions and soil carbon were measured and independently verified. The first issuance covered around 30,000 acres and generated more than 50,000 carbon credits, with individual farmers receiving roughly Rs 3,000 to Rs 15,000.

‘My Way Of Farming Has Finally Acquired An Economic Value’

For some farmers, the payments represent more than an additional cheque. Speaking to The Indian Express, Punjab farmer Sahib Singh, who received Rs 5,700, said: “My way of farming has finally acquired an economic value.” He has reportedly avoided burning paddy residue for several years and uses direct-seeded rice along with other farming practices designed to reduce water use and manage crop residue.

The programme also includes farmers who have continued such practices for years. The Tribune reported that participating fields under the programme were estimated to have saved 45 billion litres of water and kept more than 200,000 tonnes of crop residue from being burned, avoiding an estimated 1,000 tonnes of PM2.5 emissions.

How Does Soil Turn Into Carbon Credits?

The basic idea is to measure how farming practices affect greenhouse-gas emissions and the amount of carbon stored in soil. Practices such as reduced tillage, residue management and direct-seeded rice can help lower emissions or increase carbon retention. Once the climate benefits are scientifically measured and independently verified, they can be converted into carbon credits that can have a monetary value in carbon markets. Technology is increasingly important in this process. ICAR has highlighted the use of soil sampling, satellite imagery, remote sensing, field monitoring and greenhouse-gas accounting to assess and verify changes on farms.

India Is Building A Larger Agricultural Carbon Market

The recent payments are part of a wider push to bring farmers into India's emerging carbon market. In 2024, the Agriculture Ministry said its framework for a voluntary carbon market in agriculture was intended to encourage small and marginal farmers to adopt sustainable practices while creating opportunities for additional income. ICAR is also actively educating farmers about the model. In August 2026, its Indian Institute of Soil Science held a “Carbon Pathshala” for farmers in Madhya Pradesh, explaining soil carbon, regenerative agriculture and carbon markets.

The model, however, is not as simple as planting a crop and immediately receiving money. Carbon storage must be measured over time, verified and linked to credible credits. Researchers have also noted that carbon-market contracts can involve long-term commitments, making careful assessment important for farmers before participation.

From Harvesting Crops To Harvesting Climate Benefits

The idea of earning from soil adds a new dimension to farming. A field can continue producing wheat, rice or vegetables while its management practices potentially create another source of value through measurable environmental benefits. India's first large-scale soil-carbon payments suggest that the economic value of farming may increasingly extend beyond the food produced at harvest to the health of the soil, the water conserved, and the emissions avoided along the way.