How Farmers Can Earn From Carbon Credits
Posted on December 23, 2025
According to one of the reports, it has been stated that 55% of India’s population is employed in agriculture. With factors like rising input costs, dependence on natural resources like soil and water, and the climate crisis, the market of agriculture is significantly impacted, which affects the livelihoods of people.
With certain initiatives coming in the agriculture industry, the world is becoming more oriented to solving the issues related to the farming industry. With the change in time, the carbon credits in agriculture are motivating farmers to indulge in sustainable agricultural activities. Let us learn more about the same.
What are carbon credits in agriculture?
Carbon credits in agriculture refer to the market-based approach that is used to reduce the emission of greenhouse gases. Farmers use certain practices to earn these credits and to promote sustainable agricultural practices, which helps in reducing emissions.
The indulgence of new technologies and methods in agriculture is increasing, and with new practices, GHG emissions are reduced, and they are implemented and verified, where farmers can sell carbon credits and get a new revenue stream to maintain sustainable agriculture. The farmers can usually sell these credits to individuals or businesses.
How do carbon credit programs for farmers work?
Some of the major benefits of carbon credit programs for the farmers are as follows:
- Follow regenerative agriculture practices as a group: One of the first and foremost steps is for nonprofits to generate group regenerative agriculture practices that focus on soil carbon and organic matter. It is important to support farmers during the initial years, which is later on helpful to avail carbon credits.
- Identify project partner or agritech partner—Some major companies like Carbon Count Trade, Boomitra, and CarbonX are there, and collaborating with these companies will help the farmers’ project to be traded and listed.
- Onboarding and third-party verification of carbon credits— Once the projects are verified, identified, and listed, the credits are sold in the credit markets, and the incentives are distributed to the farmers and FPOs. Once the project is listed, the duration is between eight and twelve months.
How to get carbon credits for farms:
Landowners usually participate in the carbon credit market by implementing different practices, which are as follows:
- Enhancing structure and soil health: Engaging in soil-improving qualities such as planting cover crops during the off-season and supporting nutrient cycling.
- Promote Sustainable Land Use: Restore degraded soils, convert land into grasslands and forests, practice crop rotation to ensure abundant soil nutrients, and transform open areas into thriving ecosystems.
- Support Carbon Sequestration: Promoting forest regrowth and contributing to the climate change mitigation efforts.
- Nutrient Management: Implementing different kinds of nutrient management to maintain soil health with reduced reliance on different pesticides and fertilizers.
Challenges of farming-based carbon credits:
With any emerging field, there are major challenges, which are as follows:
- The average landholding size of an Indian farmer is just over one hectare, which means the amount of carbon credits received may not be enough for a particular set of farmers to adopt generative agricultural practices. There is very little awareness among the farmers about the same.
- Once the project is listed, it usually takes a period of eight to twelve months for the cash incentives to arrive at the farmers. In some cases, it may take a time period of 12 to 18 months, which could be quite arduous for the farmers.
- The verification and the accounting of the carbon increase in soil can be quite challenging, as the company must show that farmers should be engaged in new practices over and above the routine practices.
What could be done to address these challenges?
To address these challenges, a few pointers to keep in mind are as follows:
- Farmers need to be educated on the benefits of carbon credit programs so that all farmers can practice regenerative agricultural practices.
- Governments at the central and state levels should attempt to align natural farming and organic farming schemes to nudge farmers to participate in carbon credit programs. For example, certain guidelines could mandate the regular estimation of soil carbon levels, and the data obtained can be used to facilitate the measurement and different verification processes.
- Major carbon credit programs onboard groups of farmers rather than individual farmers, so here the cost and the associated risk for an individual farmer are reduced.
Conclusion
Different countries are now making climate commitments to improve the ecological cycle of the world. The market of carbon credits will increase over the upcoming years. However, there are changes with the advancement of technology. India can also act as a medium for achieving climate goals and promoting regenerative agriculture through carbon-led incentives.