Enabling Indian Farmers To Benefit From Carbon Credits

Climate crisis is taking a toll on environment-related sectors and agriculture is at the forefront of it to bear its brunt. Bearing its underlying effects such as land degradation, poor soil and dwindling profits, the sector is constantly struggling to solve the issues.

Approximately 54.6 percent of the population is involved in this sector. However, given its nature of work and involvement of resources like soil, water etc, agriculture has the highest impact on carbon emissions. It is one of the biggest contributors when it comes to greenhouse gases despite having a significant impact on the GDP and economy of the country. 

Soil is made of organic matter of which organic carbon takes up around 58 percent. While the organic matter is beneficial to the soil, the carbon content is responsible for influencing climatic change. Sequestering this carbon is one way to regulate climate change. 

This sector alone contributes to 14 percent of greenhouse gas emissions. Temperature changes, limited rainfall, usage of fertilisers and pesticides etc. are some of the elements that are responsible for this emission.

Thus, it becomes imperative to find alternatives that can decrease the impact these factors have overall on carbon emissions. Gradually realising the benefits of chemical-free farming, farmers are getting into regenerative practices.
  
To battle this issue on a policy level and support farmers who are helping the environment by going chemical-free, the Indian Government introduced a bill in the Lok Sabha called The Energy Consumption (Amendment) Bill, 2022. This bill is an amendment to the Energy Conservation Act, of 2001 and targets the regulation of carbon emissions. 

This bill focuses on a few key elements that are based on the eventual aim to limit carbon emissions as mentioned in the COP-26 summit in 2021. The key elements of this bill focus on carbon credit trading. This allows an entity or a farmer to produce a specified set of carbon and greenhouse gas emissions with the issuance of certificates. These certificates can be redeemed for allowance if the specified set has not been reached. 

This bill is a great way to adopt sustainable practices in the agricultural industry. But how is this beneficial to farmers?

Since agriculture is the main source of income for the majority of farmers, any changes in the climate and its influence on the crops can have an adverse impact on their lives. This bill not only ensures that soil remains healthy and reduces emissions of carbon and GHG to reduce the impact of climate change, but it also provides an alternative source for farmers. By registering in this scheme, and collecting carbon credit certificates farmers can trade them for an allowance.

Additionally, by meeting the regulatory requirements, they also implement planet-friendly farming techniques that are less likely to have an impact on the climate. Thus, having land with healthy soil will result in a better crop yield and a lesser chance of having a failed harvest.

According to this bill, farmers can receive benefits based on their credits earned. These credits can be redeemed at varying rates, with larger entities potentially offering higher rates. By adopting regenerative or organic practices, farmers have the opportunity to earn multiple credits per acre, providing them with an extra income source.

Since climate emergency is a big issue faced worldwide, many countries are implementing different strategies to combat this problem. For the Indian economy where agriculture plays a vital role, the introduction of such schemes is beneficial for farmers who for a few years have been struggling to get better crop yields and eventually get a steady income. The carbon credit trading initiates better practices, better harvest and a new source of income that not only is beneficial for the environment but for the livelihoods of farmers.

(Malkiat Singh is marketing head, JCBL Agri Solutions.)