Can Carbon Farming truly Regenerate Soil and Boost Farmer Income in 2025?

As climate change accelerates, agriculture is caught in a double bind — our soils are growing weaker, and farmer incomes are steadily falling. But there’s a hopeful path forward: Carbon Farming. This approach focuses on capturing carbon in the soil using nature-based solutions like no-till farming, cover crops, and agroforestry. The result? Healthier soil, richer biodiversity, lower emissions — and, most importantly, a chance for farmers to earn extra income through carbon credits.

In this article, we explore how carbon farming can restore India’s degraded soils and open new income avenues for farmers. Backed by real-world case studies, current data, and practical insights, we look at how this powerful practice can transform Indian agriculture — sustainably and inclusively.

Introduction: What is Carbon Farming?

Can farming be part of the solution to climate change, not just a contributor to the problem?

It turns out — yes, it can. That’s where carbon farming comes in.

At its core, carbon farming is about using smart, nature-based farming practices that pull carbon dioxide from the air and store it in the soil and plants. Think of techniques like no-till farming, cover crops, agroforestry, or adding biochar to the soil. These methods do more than just reduce emissions — they help restore soil health, increase biodiversity, and make farms more resilient in the face of extreme weather. On a global scale, carbon farming could help lock away anywhere between 0.4 to 1.2 gigatons of carbon every year — enough to reduce global emissions by up to 15% (IPCC, 2019).

In a country like India, where farming contributes around 16% of all greenhouse gas emissions, carbon farming isn’t just a good idea — it’s becoming a necessity for a more sustainable and climate-friendly future (MoEFCC, 2023).

Soil Regeneration through Carbon Farming

Carbon Farming can undo the effects of soil degradation which affects 147 million hectares of land in India thus lowering productivity (ISRO, 2021). Cover cropping and crop rotation increase soil organic carbon (SOC), enhancing water holding capacity and fertility. In Punjab, research indicated that cover cropping raised Soil Organic Carbon levels by 15% within a span of three years (ICAR, 2022). Agroforestry, being appropriate for India’s varied agro-climatic conditions, can minimize erosion and sequester carbon. Agroforestry schemes involving neem trees improved soil health on 50,000 hectares of land in Andhra Pradesh (WRI India, 2023)

Economic Benefits: Carbon Credits and Farmer Income

What if farmers could get paid not just for growing crops, but for protecting the environment? That’s the idea behind carbon credits — a growing market that rewards farmers for practices that pull carbon dioxide out of the air and store it in the soil. Globally, this market could be worth $375 billion by 2050, assuming carbon prices reach $160 per ton (Nature Food, 2024).

In countries like the United States, this concept is already in motion. For example, Indigo Ag’s carbon program issued 1 million credits by 2022, sharing 75% of the revenue directly with farmers (Indigo, 2022). It’s a clear sign that farmers can earn money while improving the health of their land. But in India, the story is different. Despite many farmers adopting sustainable practices like no-till farming or agroforestry, 99% of them don’t receive any payment for the carbon they sequester (Taylor & Francis, 2024). The system is either too complex, too new, or simply out of reach for smallholders.

Still, change is coming. A few pioneering projects are showing what’s possible. In Tamil Nadu, for example, a pilot initiative by Grow Indigo helped farmers earn ₹500 per hectare by participating in a carbon sequestration program (The Hindu, 2024). It’s a small step, but a meaningful one.

So, what needs to happen to unlock this opportunity for more farmers?

• Join credible carbon programs that monitor and reward climate-friendly farming

• Come together as cooperatives to negotiate better deals and reduce costs

• Invest in training and verification, so farmers can access high-quality carbon markets

Carbon farming doesn’t just help fight climate change — it can put extra income in the hands of farmers. With the right support and systems in place, Indian agriculture can be both sustainable and profitable.

Challenges for Smallholder Farmers in India

For the vast majority of smallholder farmers in India, adopting carbon farming practices is not easy. Around 86% of them work with marginal landholdings, which means they have limited resources to invest in new methods. Shifting to carbon farming requires training, new seeds, and tools — all of which come at a cost. With average debts of ₹74,121 (NSSO, 2021), many farmers simply can’t afford these upfront expenses.

Water scarcity is another challenge. In regions like Rajasthan, which are already facing severe water stress, practices like cover cropping — an essential part of carbon farming — become nearly impossible to implement (IAS Gyan, 2024).

Even when farmers do try carbon farming, the results are not always as promised. A recent report shows that 28% of farmers drop out of carbon farming programs, suggesting that the benefits aren’t always clear or immediate (Taylor & Francis, 2024). Gender inequality is also a significant issue. Women make up just 4% of participants in these programs, despite their vital role in rural farming communities (Taylor & Francis, 2024). If carbon farming is to truly uplift farmers, women must be included in the conversation and provided with equal opportunities.

On top of this, there’s a technical issue — there are no established, affordable methods for measuring soil carbon content. This uncertainty makes it difficult for farmers to trust the carbon credit system and understand if their efforts are truly paying off (NPR, 2024).

So, what can we do to help?

• Subsidies for seeds, tools, and training can give farmers the financial breathing room they need to adopt carbon farming practices.

• Training programs, especially for women, can help farmers get the knowledge they need to succeed.

• The government and organizations can invest in better carbon measurement tools to build trust in carbon credit systems and ensure farmers get fairly compensated.

Making carbon farming work for smallholder farmers requires not just better policies, but a deeper understanding of their challenges. With the right support, this could be a path to both economic stability and environmental sustainability.

Case Studies: Lessons for Carbon farming in India

Looking at global examples, we can see how carbon farming can make a significant difference for farmers.

In the USA, farmers who adopted no-till farming and cover cropping practices saw impressive results. Their yields increased by 2–22%, and they earned an additional $42 per acre annually (CSU Chico, 2021). These methods not only improved their productivity but also contributed to healthier soil and lower greenhouse gas emissions.

Across the world in Kenya, the Agricultural Carbon Project allowed farmers to earn carbon credits by using mulching techniques. However, the benefits were mostly limited to large-scale farmers, leaving smallholders behind (IAS Gyan, 2024). This highlights a challenge for India — how to ensure that carbon farming opportunities reach smaller, resource-poor farmers.

In India, the System of Rice Intensification (SRI) method used in Bihar is a perfect example of carbon farming principles in action. By adopting SRI, farmers were able to reduce emissions by 20% while seeing a 15% increase in rice yields (IWMI, 2023). This shows that sustainable agricultural methods not only improve the environment but also increase productivity, which is critical for farmers’ livelihoods.

For Indian farmers, there are several ways forward. Practices like SRI and agroforestry offer excellent starting points. Additionally, support from government initiatives like the National Mission for Sustainable Agriculture can help scale up these practices, making them more accessible and effective for farmers across the country.

Policy Support: A Critical Need for Carbon Farming in India

For carbon farming to thrive in India, strong and effective policy support is essential. Although the National Mission on Sustainable Agriculture encourages regenerative farming practices, its reach and impact are still limited, with only about 10% of farmers benefiting from its initiatives (MoAFW, 2023). One of the key challenges is the lack of comprehensive guidelines for soil carbon monitoring, which creates uncertainty in the carbon credit market and undermines farmer confidence in these programs (NPR, 2024).

Taking inspiration from Europe, where the EU’s Common Agricultural Policy supported 10% of farmers with financial incentives for adopting regenerative practices by 2023 (European Commission, 2023), India can learn how strategic policy support can empower farmers to adopt more sustainable methods.

To unlock the full potential of carbon farming, India needs to introduce tailored incentives, such as tax exemptions, subsidies, and the creation of regional carbon credit platforms. These measures would provide farmers with the financial security and resources they need to make the shift toward carbon farming, ultimately enhancing soil health, boosting farmer incomes, and contributing to global climate goals. With the right policy framework, India can pave the way for a more sustainable and profitable agricultural future.

Innovations to Scale Impact in India

New technologies such as biochar and intensified rock weathering can maximize carbon sequestration. Biochar, applied in Brazil, sequesters carbon in soils for hundreds of years while increasing fertility (One Earth, 2024). Trials of Biochar in Maharashtra boosted yields by 12% (ICAR, 2023). In rural areas, low-cost options like village biochar kilns can be especially impactful. In US, new technologies such as soil sensors, enable farmers to track carbon levels, increasing credit earnings (BCG, 2024). Low-cost technologies can be developed at research centres and farmers can access pilot projects on small areas for experimenting with innovation such as biochar etc.

Integration with Other Practices in India

Carbon farming can easily be integrated with current practices in India, such as organic farming and livestock rearing. In Gujarat, agroforestry with livestock enriched soil fertility and generated supplemental income via dairy (ICAR, 2022).  Organic farming done by 2.3 million Indian farmers can be harmonized efficiently with carbon farming by minimizing chemical application (APEDA, 2023). Combining these methods can increase soil carbon and help in income diversification. Farmers can integrate cover cropping with livestock manure to naturally enrich the soil, collaborating with local veterinary services for enhanced animal health and productivity, guaranteeing an integrated approach. 

Climate Resilience and Food Security

Carbon farming increases climate resilience in India, where 60% of agriculture is rain-fed (MoAFW, 2023). Agroforestry practices enhance water holding capacity in soil, essential during dry periods. In Odisha, agroforestry cropping systems lowered crop failure rates by 25% during dry periods (WRI India, 2023). Through increased soil organic matter, carbon farming also improves food security—India must feed 1.4 billion people (World Bank, 2023).

Farmers can plant drought-resistant cover crops like millets, which sequester carbon while ensuring food production, working with agricultural extensions to select varieties suited to local climates.

Summary

Carbon farming offers the potential to rejuvenate soil and significantly enhance farmer incomes in India. Techniques such as agroforestry and cover cropping can rehabilitate 147 million hectares of damaged land, enhancing fertility and climate resilience. Financially, carbon credits would help the $375 billion international potential by 2050, though Indian smallholder farmers are hampered by costs and restricted access to markets. Case studies in Bihar and international experiences demonstrate yield and income increases, but policy assistance and low-cost innovations such as biochar are necessary. Subsidized, training-based, and practice-linked integrations like organic farming can turn carbon farming into a game-changer for India’s agriculture, with sustainable soils and improved livelihoods.

REFERENCES

• (2024). Unearthing Soil’s Carbon-Removal Potential in Agriculture. Retrieved from www.bcg.com
• CSU Chico. (2021). Farmer Case Studies Show the Economic Value of Soil Health Practices. Retrieved from csuchico.edu
• European Commission. (2023). Common Agricultural Policy 2023-2027. Retrieved from ec.europa.eu
• (2021). Status of the World’s Soil Resources. Food and Agriculture Organization.
• Grow Indigo. (2024). Carbon Farming Initiatives in India. Retrieved from growindigo.co.in