Carbon farming projects not always inclusive and equitable, says new study

Almost a year ago, the Union Agriculture Ministry released framework guidelines on how the agriculture sector could leverage the carbon market by practicing carbon mitigation techniques. Arjun Munda, the then agriculture minister, said, at the time, that introducing farmers to the carbon market would not only benefit them, but also accelerate the adoption of environmentally friendly agricultural practices.

A new study on the status of carbon farming in India, however, says otherwise.

Researchers from the International Maize and Wheat Improvement Center (CIMMYT) conducted a survey among hundreds of farmers and found that carbon farming, in which cultivation is aimed at lowering emissions or improving carbon sequestration, inadvertently excluded small landholding farmers, and monetary benefits had reached almost none of the participating farmers at the time of the survey.

“While these projects are still in the early stages, we wanted to highlight that they’re not socially inclusive of marginalised caste groups or small and marginal farmers, or even women for that matter,” said A. G. Adeeth Cariappa, an Environmental and Resource Economist with CIMMYT and lead author of the study.

Carbon farming has the potential to mitigate climate change while offering farmers additional income avenues through carbon credits, notes the study.

Purchasing carbon offsets remains a popular option for companies looking to reduce their own carbon footprints. The agriculture sector, responsible for 13% of India’s annual greenhouse gas emissions, is emerging as a viable destination for carbon credit generation in India. According to the study, India has more than 50 agricultural carbon credit projects targeting 16.5 million hectares.

However, bottlenecks in implementation are resulting in few direct benefits to farmers, the study, published in the journal Climate Policy in 2024, says. Lack of monetary benefits, scarcity of information and awareness, and drops in yield are some of the reasons why farmers choose not to continue with carbon farming practices.

Social exclusion in carbon farming

Carbon farming includes methods of cultivation that either result in lower emissions or improved carbon sequestration. Examples include direct seeded rice, where seeds are directly drilled into the soil at a depth of 2-3 centimetres to reduce water and energy use, as well as alternate wetting and drying, where paddy fields are intermittently flooded and drained. Other practices such as zero-tillage farming, reduced chemical fertilizer use, and crop residue management are also methods of carbon farming.

The researchers selected seven carbon farming projects in Madhya Pradesh and Haryana that were in the process of being validated, registered, or developed with Verra, an organisation that sets standards for carbon credits. A total of 814 farmers were surveyed to understand the outcomes of carbon farming compared with non-carbon practitioners.

“We found that the type of developer implementing the project had an impact on the disadoption rate of farmers engaged in carbon farming,” said Cariappa.

Project developers were bracketed into three categories – carbon core companies (businesses solely focussed on the generation and sale of credits), carbon branch companies (subsidiaries or Corporate Social Responsibility wings of larger corporations in an unrelated business), and carbon blend companies (agricultural companies that treated carbon credit generation as an additional venture).

Carbon core companies, whose businesses depended on carbon credit generation performed best when it came to ensuring continuity into the second year of carbon farming, “likely due to better communication and engagement strategies” with farmers, says the study. These companies tended to be “more actively involved on the ground, had more staff, were more approachable, and had partnerships with NGOs or other partners like machinery service providers,” compared to the other two developer types,

But projects by carbon core companies also saw the highest rates of social exclusion among marginalised groups with smaller land holdings. Farmers engaged with carbon core companies cultivated 51% and 32% more land than non-carbon farmers in Haryana and Madhya Pradesh, indicating larger land holdings. These farmers were also overwhelmingly from non-marginalised castes. As per the report, 83% of farmers engaged with carbon core companies were from general, non-marginalised caste groups. This remained high for carbon branch projects too, where 69% of farmers were from non-marginalised caste groups.

Marginalised farmers from Scheduled Castes and Scheduled Tribe households had only a 5% share in cultivated land in carbon core projects compared to 17% among non-carbon farmers. This indicates “a potential bias” in favour of large landholders, “who might be more capable or willing to participate due to resource access or higher risk-bearing ability,” says the study.

Manan Bhan, a Fellow in Residence at the Ashoka Trust for Research in Ecology and the Environment, who was not a part of the study, said that generating credits from agriculture required scale. “The price of the credits may not always reflect the transaction costs involved, especially in countries like India,” he said, adding, “To developers, it might make sense to engage with medium and large landholders, because that would give them the scale they need while reducing the transaction costs involved in generating the credits.”

The inadvertent exclusion of marginalised farmers “raise concerns about the role of carbon markets in achieving inclusive developmental goals,” the study says.

The study also finds that some practices were not “additional” – meaning they did not result in additional decreases in emissions – because they were already being implemented for some years before the project began. For example, farmers in Haryana had already been practicing cover cropping (planting plants to cover soil) and laser land levelling techniques before the carbon projects required them to.

Bhan said the study was “incredibly useful,” in shining a light on how agriculture-based carbon projects actually work on the ground. “If farmers aren’t continuing year on year, it calls into question the climate action potential of these projects over the long-term,” he said.

Lack of monetary benefits and lower yields

Nearly every farmer surveyed said they had not yet received any monetary benefits from the carbon projects. This was cited as the biggest reason why farmers chose not to engage with “additional” carbon farming practices beyond the first year. The second most frequently cited reason was a loss in income from yield penalties.

The lag in receiving monetary benefits from projects illustrates the challenge in motivating farmers to continue with carbon saving practices, said Cariappa. “Since these projects were still in various stages of development, credits were not yet being sold. But for farmers, it’s like a double whammy if they’re adopting carbon farming, not receiving monetary benefits, and also facing yield penalties. It’s an implementation challenge which, if not fixed, will affect the supply of carbon credits.”

The results are useful to consider in light of India’s own upcoming carbon compliance market, says A. Amarender Reddy, joint director of the school of crop health and policy support research at the Indian Council of Agricultural Research. “When developing its own policies, the government should do 30 to 40 pilot studies so that there is a clear methodology to how credits are calculated, and how programmes are implemented so that farmers are not faced with losses in income and yields,” he told Mongabay India.

According to Reddy, including smallholding farmers is important to scale credits from agriculture, since most land holdings average less than two hectares. “A consortium of people needs to be brought forward to participate, either through Farmer Producer Organisations and other such cooperatives,” he said, adding, “This will ensure the farmers feel more confident and it may also lead to more inclusion.”

Banner image: A farmer walking through his fields. Image by Ingo Mehling via Wikimedia Commons (CC BY-SA 4.0).