chhoFor smallscale farmers, carbon markets offer an opportunity to improve farming practices, adapt to climate change, and contribute to global climate solutions. Many carbon projects aim to protect and restore forests, wetlands and other ecosystems. These ecosystems are important sources of biodiversity and can provide livelihood opportunities for small farmers and rural communities. Intensive farming practices have been adopted in Indian agriculture for the last six decades to ensure food security in the country. This has resulted in significant depletion of soil organic carbon, decline in soil fertility and chemical pollution in prime cultivated lands across the country. Furthermore, intensive farming with singlecrop cultivation of major cereals has led to loss of biodiversity and depletion of groundwater resources. These farming practices also increase greenhouse gas (GHG) emissions that contribute to global warming and climate change. India's agroforestry sector presents an important opportunity for integration with carbon finance projects, particularly through afforestation, reforestation and reforestation initiatives. Carbon Sequestration through Carbon Finance Projects Agroforestry's ability to sequester carbon makes it a central component of carbon finance initiatives. Carbon finance projects involve planting trees or increasing tree cover in agricultural landscapes, allowing farmers to earn carbon credits through carbon sequestration activities. Expanding agroforestry areas to 53 million hectares by 2050 presents an opportunity for largescale carbon sequestration and participation in global carbon markets.
The Carbon Finance Project initiative also offers the potential for income diversification, especially for small and marginal farmers. However, smallholder farmers have still not benefited from carbon markets on a large scaleprimarily because of the low prices offered and the high cost of creating tradable, unique and verifiable carbon credits. Furthermore, participating in carbon markets may require a significant investment of time and resources. Although carbon markets can provide financial benefits for carbon sequestration, financial incentives may be insufficient to cover the costs borne by farmers. Nevertheless, the market is changing rapidly, and new technologies are expanding the limits of what is possible.
Beyond carbon sequestration, agroforestry under carbon finance projects increases soil fertility, improves water retention and reduces erosion, thereby boosting agricultural productivity. Additionally, it promotes environmental sustainability by restoring degraded lands and providing a buffer against climaterelated risks. Government policies supporting agroforestry such as the National Agroforestry Policy, 2014 provide a framework for the expansion of agroforestry in India. For further integration with carbon finance, this policy should be revised to explicitly support carbon finance projects initiatives and facilitate access to carbon markets.
Subsidies and financial support for carbon sequestration Financial incentives, such as subsidies for planting trees or maintaining forest cover, can encourage small farmers to adopt agroforestry systematically. Capacity building and awareness campaigns, training programs are essential to educate farmers about the benefits of agroforestry and carbon finance. Extension services and NGOs can play an important role in disseminating information and providing technical assistance, enabling small and marginal farmers to participate in carbon finance initiatives.
Encouraging private sector participation and international collaboration such as through publicprivate partnerships (PPPs) and connecting with international carbon finance platforms will be important to scale up agroforestrybased carbon finance projects. Global platforms like Vera and Gold Standard need to recognize the need for Indiacentric standards that take into account the unique challenges of smallholder agriculture. Agroforestry in India has immense potential to contribute to carbon sequestration, environmental sustainability and rural economic development. A framework has been prepared to promote Voluntary Carbon Market (VCM) for the agriculture sector in India, so as to encourage small and marginal farmers to avail carbon credit benefits.
Introducing farmers to carbon markets can accelerate the acceptance of environmentally friendly farming practices while increasing their incomes. Farmers can adopt sustainable farming practices and get additional income from carbon credits, as well as other agroecological benefits in terms of improved natural capital like soil, water, biodiversity etc. The carbon credit market in agriculture is in its infancy and requires strict monitoring and regulatory systems. There are concerns that asymmetric information, lack of transparency and inadequate regulation could lead to unfair pricing practices for carbon credits, resulting in lower incomes for farmers.
Additionally, lack of knowledge and awareness among farmers and rural communities can lead to their exploitation. There is an urgent need for policy measures to ensure transparency, regulation and widespread awareness about this in the country. These systems are essential for efficient and transparent functioning in the country to ensure that the desired benefits reach the farmers. The framework for voluntary carbon markets in the agricultural sector will help promote carbon markets among the farming community, incentivizing and financing sustainable farming practices. The main objective of the VCM framework is to create awareness and capacity building of stakeholders and motivate farmers to adopt sustainable farming practices. This will further contribute to the Sustainable Development Goals, support rural livelihoods and increase agricultural resilience.
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Image Credit: KhasKhabar.