The Carbon Credit Conundrum: Transforming India's Agriculture

Exploring the promise and complexities of agricultural carbon credits, this analysis sheds light on how carbon markets can potentially transform India's agriculture into a low-carbon asset. While offering financial incentives to farmers through carbon sequestration, it highlights the challenges and implications of such a shift.

Agricultural carbon credits, at first glance, offer a compelling solution for climate change, turning farmers into climate solution providers. By adopting practices like reducing tillage and improving water management, farms can increase carbon storage, which companies buy as credits to offset emissions.

In practice, however, the landscape is complicated. In regions like India's drylands and Kenya's maize belts, carbon markets face challenges such as information asymmetries and unequal bargaining power. Farmers often see modest benefits, while intermediaries and corporate buyers capture more value.

India's agricultural sector stands at the crossroads of climate risk and opportunity. Contributing significantly to national emissions, it's a ripe candidate for mitigation through climate-smart practices. However, for carbon farming to benefit farmers and the environment, it requires transparent systems and policy support.

(With inputs from agencies.)