Bayer has started rewarding farmers in Brazil and the United States for generating carbon credits by adopting climate-smart practices – such as no-till farming and the use of cover crops – designed to help reduce agricultural carbon footprint and greenhouse gas (GHG) emissions. Bayer’s industry-leading Carbon Initiative is the result of years of work validating a science-based approach and methodology to make this happen. It recognises the pivotal role growers and their land can play in helping to create lasting, positive environmental impacts. Bayer rewards growers to generate carbon credits by adopting climate-smart practices and creating a new revenue stream on-farm. The initiative makes Bayer the first company to develop a transparent, science-based and collaborative approach to a carbon market in agriculture. Suhas Joshi, Head, Sustainability & Business Stewardship, South Asia, Bayer Group interacts with AgroSpectrum about the status of the carbon farming trading sector in India. Edited experts;
How do farmers benefit from their carbon credits? What systems currently exist and what robust certification processes will be needed for farmers to play in carbon trading platforms in India?
While carbon credits generated from agriculture and subsequently sold can add to farmers’ income, the significant benefit to the farmer can accrue from the adoption of the more climate friendly cultivation practices as a part of the carbon programme. Under Bayer India’s Sustainable Rice Programme, farmers are encouraged to switch from the ‘transplanted’ rice cultivation to either ‘Direct Seeded Rice (DSR) or Alternate Wetting & Drying (AWD). In case of DSR, the farmer substantially reduces the cost of cultivation as the transplanting operation gets eliminated. Water saving is considerable in both DSR and AWD practices, also positively impacting the consumption of fuel and electricity as less water is pumped. The change in practice also improves soil health as the puddling operation responsible for the soil damage in rice farms gets abolished.
Bayer’s Sustainable Rice Programme prepares farmers for climate adaptation in addition to generating the carbon offsets.
Currently the carbon programmes have the possibility of registering with the International standards like the Gold Standard or Verra VCS. A strong process of verification and validation exists under these standards. As a strong proponent of sustainable agriculture practices, Bayer is committed to playing a key role in raising awareness and providing training to farmers and handholding them through the entire process and ultimately creating a unified framework of getting them registered with carbon standards to receive credits in due course.
How do you foresee the future of the carbon farming trading sector in India?
As a result of the Paris Agreement, companies are increasingly pledging to help stop climate change by reducing their own greenhouse-gas emissions with a clear roadmap of targeted reductions year-on-year. Yet, many businesses find that they cannot fully eliminate their emissions, or even lessen them as quickly as they might like, from their operations. For the companies committing to achieve carbon neutrality, use of carbon credits will be very important to offset emissions they can’t get rid of by other means. A recent report published by The McKinsey & Company, estimates that demand for carbon credits could increase by a factor of 15 or more by 2030 and by a factor of up to 100 by 2050. Overall, the market for carbon credits could be worth upward of $50 billion in 2030.
Carbon farming in Indian agriculture is still in its nascent stage but has the potential to generate a large number of carbon credits and supply to the global markets; however, this would require significant upfront investments and focused efforts on the ground.
What are the plans of Bayer for launching the Carbon farming programme for the farmers in India?
India grows paddy rice on around 44 million hectares with transplanting being the predominant cultivation practice. Methane emissions from rice paddies, where the land remains in a foot-high standing water throughout the season, are the highest from cropland and the second highest source in agriculture, surpassed only by emissions from enteric fermentation in livestock. The amount of methane emitted from the rice paddies are strongly linked to the practices (flooding and fertilising) applied by the rice farmers.
To this end, we established a pilot project in 2021 across 10 states in India to help rice farmers adopt sustainable practices and get paid for the greenhouse gas emissions they avoided through carbon credits. Importantly, this initiative supports the expansion of regenerative agriculture, improves natural resource management and supports farmer productivity and livelihoods.
The pilot has targeted around 3000 hectares across diverse states across the country. It is early days, but we are seeing encouraging signs that farmers in our pilot project were able to reduce water usage, lower methane emissions, protect their yields and soils, and improve their margins.
What are the challenges in the carbon farming trading sector in India?
Promoting climate mitigation activities in Indian agriculture is a very tedious effort that involves identifying and enrolling smallholder farmers in large numbers, training them, handholding them on climate-smart agricultural practices, managing the MRV (Monitoring, Review & Verification mechanism) on each small farm, generate carbon credits and timely incentivise each participating farmer. A strong public-private partnership model is the need of the hour to ensure a strong outreach and focus on such resource-intensive micro level-farming units and meticulously follow all necessary processes needed for earning carbon credits.
A conducive policy environment and enabling mechanism from the government’s side will go a long way in helping the Indian smallholder farmers by leveraging the opportunity in the global voluntary carbon markets.
What inputs are required for the growth of the carbon credit trade sector in India?
A conducive policy environment is a must for the growth of carbon farming in India that could enhance farming incomes and also make Indian agriculture more climate resilient. The policy framework should encourage private sector investments for making carbon farming economically viable and globally competitive for smallholder agriculture projects. The policy should assure the investors that the carbon credits generated from smallholder agriculture will not be nationalised or included in the NDC.
It is also important to remove policy impediments, if any, from international transactions of the voluntary carbon credits generated from Indian smallholder agriculture.
Dipti Barve
dipti.barve@mmactiv.com
