Drip irrigation, a method by which a farmer uses a lot less water, has been around for a long time, but still farmers flood their fields with water. Why? Because, there has never been a reason for them to give up the traditional, easier and cheaper, flood irrigation and opt for drip irrigation.  

Drip irrigation is but one example of climate-friendly agriculture; others include practices that result in less use of various inputs and measures that can increase soil carbon. These practices include conservation tillage, growing ‘cover crops’ to reduce soil erosion and water run-off and other cropping practices that sustain soil nutrients. But climate-friendly agriculture, or sustainable agriculture, had no reason to figure in a farmer’s playbook.  Enter carbon markets. Things are changing now, as farmers have an opportunity to secure carbon credits and make money by selling them.  

Santosh Singh, Managing Director, Climate and Agri Solutions, Intellecap, a company of the Aavishkaar group, which helps onboard farmers into sustainable practices, says that carbon markets are giving farmers that critical additionality of revenue to spur them to adopt climate-friendly agriculture and agroforestry.  

Intellecap is now working with a million farmers. The projects include planting trees, including on berms and ridges, bamboo plantations etc. Singh says that earlier such projects held no charm for farmers; even if they grew some trees, the survival rates were low because of lack of attention.  

Gaining momentum

Today, a carbon credit earned from an agroforestry project sells for anywhere between $8 and $20 – the big range is because the buyers pay a price depending upon the social impact a project has. This additional income matters. Further, earlier the small farmers had neither awareness about carbon markets nor even if they did, they had no means to participate in it. But now, a number of companies like Intellecap have come up and are working with farmers. 

VNV Advisory is another company that works in this area and is advising on many projects. One of the more interesting of them is one that aims to restore an entire broad-leaved oak forest in Uttarakhand, replacing the pine trees. The idea is to plant a native species of oak, called Banj Oak, on parcels of community forest lands. Alongside, the project includes fire prevention activities and cultivation of fodder grasses for livestock. 

Spread over 30 villages and three districts in the Kumaon region of Uttarakhand, the first phase of the project seeks to plant oaks on 500 hectares of land; the second phase will embrace 2,000 hectares. VNV says pine affects groundwater, while oak helps conserve it.  

VNV is advising on several other projects too, such as developing mangrove-based aquaculture in coastal Andhra Pradesh, Odisha, Karnataka, Maharashtra and Kerala. Another one is agroforestry in Punjab, over half a million hectares of land, in the districts of Kandi area — the major species that would be planted are poplar, eucalyptus and dek. Again, these projects would be difficult to implement without the support of carbon markets. 

Experts, such as Thomas McMahon, Co-Founder of AirCarbon, a carbon credits exchange, note that carbon credits from ‘Nature projects’ command a better price than, say, wind or solar projects. Furthermore, the 15th Finance Commission, which determines how the tax pool should be divvied up between the Union and state governments between 2021-22 and 2015-26, has given out a devolution formula that gives an edge to forest and ecology – a 10 per cent weightage. The Nature Conservancy (TNC), an international body, has calculated that this translates to a projected tax devolution of ₹4.22-lakh crore over five years. Of course, forests cannot be built in five years, but if this precedent of allocating more from the tax pool to States that have more forests continues, States will want to build more forests. By the looks of it, carbon markets will give that extra push to make that happen. 

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