Carbon Farming in India: Potential, Policy Framework and Smallholder Adoption Challenges

Abstract

Carbon farming has emerged as an important climate-smart agricultural strategy for enhancing soil organic carbon, reducing greenhouse-gas emissions and improving the sustainability of agricultural systems in India. The present study examines the potential, policy framework and smallholder adoption challenges of carbon farming in the Indian context. It focuses on practices such as zero or minimum tillage, residue retention, agroforestry, compost and manure application, biochar use, cover cropping, crop diversification and improved rice cultivation. The analysis shows that India has significant carbon farming potential because of its large gross cropped area, diverse agro-climatic conditions and widespread need for soil restoration. Scenario-based estimation indicates that even 10% adoption of carbon farming across India’s gross cropped area may generate about 54.45 MtCO₂e annually under a moderate sequestration assumption of 2.5 tCO₂e/ha/year. However, the smallholder-level income estimate shows that direct carbon-credit income may remain modest after monitoring, reporting, verification and aggregation costs. Therefore, carbon farming should not be treated only as a carbon-credit business model, but as an integrated pathway for soil health improvement, climate resilience, water conservation and sustainable rural livelihoods. The study further finds that India’s emerging carbon-market framework, including the Carbon Credit Trading Scheme and the voluntary carbon market framework for agriculture, provides an institutional foundation for scaling carbon farming. Nevertheless, small and marginal farmers face barriers such as fragmented landholdings, high transaction costs, low awareness, uncertain carbon prices, technical complexity and unequal benefit-sharing risks. The paper argues that carbon farming in India can become inclusive and scalable only through farmer producer organisations, cooperatives, low-cost MRV systems, transparent contracts, digital monitoring, extension support and state-level pilot projects. A smallholder-centred carbon farming model can contribute to climate mitigation, soil restoration and sustainable agricultural development in India.