India's agricultural carbon market has reached the farm level, with more than ₹2.9 crore to be disbursed digitally among 2,550 small and marginal farmers in Punjab and Haryana as payment for adopting regenerative farming practices, the Ministry of Agriculture said on 17 September 2026. The payments mark the country's first large-scale farmer-level carbon credit settlement, bridging sustainable agriculture with direct income support.

How the Payments Were Rolled Out

The first tranche was formally released at a programme held at Punjab Agricultural University (PAU) in Ludhiana, where Dr M.L. Jat, Secretary of the Department of Agricultural Research and Education (DARE) and Director General of the Indian Council of Agricultural Research (ICAR), initiated the Direct Benefit Transfer (DBT) to enrolled farmers. The initial issuance covered approximately 30,000 acres and generated more than 50,000 carbon credits, with individual farmers receiving between ₹3,000 and ₹15,000 each, depending on their contribution.

The 'Aadi' Programme and Farming Practices

The payments flow from 'Aadi', a farmer carbon programme run by Grow Indigo and launched in 2019 with technical guidance from ICAR. Between 2019 and 2022, participating farmers adopted practices including Direct Seeded Rice (DSR), reduced tillage, and crop residue management. The greenhouse gas reductions and soil carbon increases generated by these practices were independently measured and verified before credits were issued under the internationally recognised Verra VM0042 methodology.

Grow Indigo released the payments digitally from its own funds ahead of full credit sales, allowing farmers to receive income without waiting for sale proceeds. Enrolled farmers could choose between an assured upfront payment or 75 per cent of net carbon revenue after credits were sold. Farmers who joined after 2022 will receive payments in the next monitoring cycle as their credits are issued.

Scale and Environmental Impact

The programme now covers more than two million acres and over 1,00,000 farmers across seven states. For fields enrolled during 2019–2022, the programme estimates savings of 45 billion litres of water and more than 2 lakh tonnes of crop residue diverted from burning, avoiding an estimated 1,000 tonnes of PM2.5 emissions. The use of Direct Seeded Rice reportedly reduces irrigation requirements compared with conventional paddy transplanting, while improved residue management directly addresses stubble burning — a persistent source of air pollution across the Indo-Gangetic Plain each winter.

ICAR's Scientific Role

ICAR institutions contributed expertise spanning greenhouse gas accounting, crop-simulation modelling, soil-sampling protocols, device validation, field-team training, and satellite and remote-sensing approaches. Dr Jat said the initiative demonstrates how 'climate-smart farming practices, backed by scientific assessment and rigorous verification, can create additional income opportunities for small farmers while contributing to water conservation and improved air quality.'

What Comes Next

This payout is the opening phase of a longer rollout. With the programme operational across seven states and more farmers entering successive monitoring cycles, the volume of credits — and payments — is expected to grow. The scale of the Aadi programme positions it as a potential template for India's emerging national carbon market framework, whose policy architecture is still being finalised.