Enabling smallholders to improve their livelihoods and benefit from carbon finance

International Research Center for Agroforestry

General Information

Please provide some information on the geographic context for this project (i.e., type of agriculture involved; significance in the local, regional, and national economy, investment in agriculture, etc.)

The project, “Enabling small holders to improve their livelihoods and benefit from the carbon finance” is a small holder diversified agriculture systems in four ecological conditions, namely the, humid, semi-arid, arid, and sub-temperate ecologies. It has the significance at local and regional economy and by implications at the national level economy and investment policies.

Where is this project located? What is the scale (e.g., local, regional, national)?

This project is located in contiguous land holding grids (grid community, a group of villages) operating 1,984 ha in Orissa (humid), 2,070 ha in Andhra Pradesh (semi-arid), 5,000 ha in Rajasthan (arid) and 2,624 ha in Uttarakhand (sub-temperate). These lands are operated by 1,761 households in Orissa, 689 in Andhra Pradesh, 2,065 in Rajasthan and 1,062 in Uttarakhand, and also involve the landless.

What is the timeline for the project?

Three and a half years, June, 2009 to March, 2013, and has been requested for an extension till March, 2014.

Who is involved in the project? Is it a partnership? What organizations are involved?

The project is in collaboration with the following five lead national institutions: The institutions are:

  • Orissa University of Agriculture and Technology (OUAT), Orissa;
  • Central Research Institute for Dryland Agriculture (CRIDA), Andhra Pradesh;
  • Maharana Pratap University of Agriculture and Technology (MPUAT), Rajasthan;
  • Vivekananda Parvatiya Krishi Anusandhan Sansthan (VPKAS), Uttrakhand.
  • OUTREACH, a national level NGO based in Bangalore, Karnataka.

Project Objectives

What is the primary objective of the project (e.g., increased production; climate change adaptation and/or mitigation; food security)?

The primary objective of the project is the “improved livelihoods and income and food security of the small holder communities, especially in the context of climate change adaptation and mitigation”.

What are secondary objectives, if any?

The secondary objectives are the following:

  • Validate a SMART- CDM framework in different ecologies,
  • Build capacity to deploy framework and tool box for formalizing carbon trading,
  • Apply a range of 40 GHG mitigation options at different levels,
  • Pilot test small holder carbon trading options, and
  • Develop a manual for applying carbon trading options and scaling up approaches.

What, if any, are the anticipated co-benefits (e.g., food security; additional investment in agriculture; capacity building)

  • Sensitized communities on climate change mitigation benefits, including the carbon finance.
  • Enhanced national capacity for mainstreaming small holder farming in CDM carbon platforms.
  • Better environment through reduced emissions and increased carbon sequestration.
  • Improved farming systems efficiency and farmers livelihoods.
  • New avenues for additional farm income, including the revenue from carbon credits.
  • Policy briefs to support up-scaling of GHG reducing farming interventions in the national climate change agenda.

Project Funding

How is this project funded in the short- and long-term?

The project is funded by the National Agricultural Innovative Project (NAIP) of the Indian Council of Agricultural Research (ICAR), Government of India through a loan from the World Bank. Additional support is also generated from the National Initiative on Climate Resilient Agriculture of the Government of India.

Capacity Building and Community Involvement

What types of capacity building has the project involved and how did you manage those activities?

One of the major efforts in this project is the orientation and training of small holder farmers on carbon sequestration and emission reduction approaches and practices and their application at different levels--- house hold, farm, land scape, and community levels. Additionally, developing “business processing units" (a kind of incubators) at the community level by engaging and training the groups of entrepreneurial individuals, who are identified and managed by the community, is another major capacity building activity in this project. Similarly, training of the Indian scientists on various aspects of carbon finance markets and carbon trading options form another major activity.

The management of these activities involves several steps. First and foremost is organizing villages in the grid in a legal entity, called “Gram Samaj” as a registered body under society’s act of the government. This is followed by mapping of the livelihood / farming systems by households in the grid, doing an ex-ante analysis of potentially smart agricultural practices, and having them vetted by the community and letting the house holds chose the preferred ones for their application. Next is the training of the small holders, including the women and the land less, and of the incubators on various aspects of the project at the site, and arranging their cross site visits. Using farmers as the resource persons is a key component in these trainings.

The training of the teams of Indian scientists from each grid involved in this project on various aspects of carbon finance markets and carbon trading options, including the carbon stock assessment used approved methodologies, PDD, verification and validation, market intelligence and negotiations, etc. was done in a sequenced manner. Arrangements were also made for their in-country and overseas visits to expose them on these aspects from other similar projects.

How have communities or relevant stakeholders been engaged?

The Indian development machinery structure has villages at the lowest / smallest level, headed by a “Village Panchayat” and the District at the highest level of the administration. In between these two are the community development blocks. A block seems to be too big an entity for a village to access support from and for a block a single village seems to be too small to attend to. Therefore, a new facilitation category was created at each grid called “the Gramya Samaj” with its own office bearers from a couple of villages in the grid. It is a registered legal body under the Indian National / State Societies Act.

These Gram Samajs at each grid constructed their own buildings, called the Gramya Sampada Kedra” which double for as meeting place for the constituents and store house for inputs and supplies, etc. The Gram Samajs identified 4-5 entrepreneuring individuals and composed them in a team called “Business Processing Unit”, some kind of legal special purpose vehicle, or business incubators. These units are from within the community and are managed / supervised and paid by the Gramya Sampada Kendras.

The Business Processing Units were trained under this project on various aspect of agriculture improvement practices, and carbon finance aspects, including the PDD development, CDM protocols and carbon finance markets, etc. They act on behalf of the community in negotiations, provide them assistance on technical aspects of agriculture and in the bulk purchase of inputs & sale of the produce, and customized services on specific needs, e.g. irrigation, mechanical ploughing, etc.

The Gram Samaj or societies have also started a savings account fund from membership fee and income savings called as the “Sustainability Fund” wherefrom the grid members can take soft loan without any collateral.

Defining Success for the Project

How would you define success for this project?

By the end of 2011, over 5000 farming households were adopting a broad range of measures to reduce emissions and sequester carbon. Some of them included measures such as bund plantation of high value trees, horticultural crops and fertilizer trees in the field, populating common lands with fodder trees and shrubs, minimum and zero tillage, row planting, incorporating compost and manures, rotational irrigation, using capacitors in irrigation pumping sets, solar lights for street lighting, replacing Edison bulbs with the CFL bulbs, and using more efficient cooking stoves, etc. The energy saving interventions were on top of the list (more than 90% households applied), followed by the energy efficient cooking stoves (about 50% households) and the field crop agronomy and tree based interventions (about 10% cultivated area).

Initial assessment of these efforts indicates that farmer’s productivity and income as well as the employment opportunities, especially for the landless and women are increasing consistently and their input costs decreasing. For example, there is a 50% saving in the firewood use for cooking. They are also able to mechanize some of the crucial field operations through renting or by getting the custom services for those from the “Gramya Sampada Kendras”. These parameters along with the expansion of area under such interventions are being monitored.

A prior consideration was submitted and registered at the CDM. As of now the calculated CERs in the respective grids range between 11,544 and 12,988 CERs. It is worth mentioning that some programs and corporate houses have come forward to pay for carbon sequestration by putting upfront resources under their CSR Policy. At Andhra Pradesh grid farmers have been paid for tree planting and taking its care @ Rs. 250 ($5.00) / tree, through which farmers are getting more income than from their main field crop farming. They have also started to incorporate livestock and animal manure in their farming system as a result of increased fodder supply in the area.

Though the impact of this project is envisaged to be in the long run and its monitoring is in progress, a positive indication of its success is the request by the surrounding villages for enlarging the grid.

How are you measuring progress on objectives?

The following are the monitoring indicators for the project.

  • Quantitative baseline data / information on livelihoods / farming systems and practices by households
  • Identification and implementation level of adaptation and mitigation activities by farming households, and of the landless
  • Carbon stock assessment at zero time and after certain time intervals after applying the selected interventions
  • Seasonal productivity levels of the commodities and other enterprises, house hold income and level of expenditure, especially on farm and household inputs, e.g. cooking fuel, lights, etc.
  • Changes in the farming practices, if any, for example introduction of new crops, shifts in the use of input levels, etc.
  • Validation of SMART CDM Protocol and modifications if any needed within the approved methodologies in the CDM frame work
  • Pilot testing of carbon trading options in different available instruments, CDM, Voluntary markets, OTC and CSR,
  • Functioning and engagement of the business processing units
  • Preparation of generic manuals

Did you develop a methodology for this project? If so, briefly explain the development process and how the methodology is being implemented.

This project has seven main components. They are the following:

  • Innovations
  • Identifying and scaling up smart practices for carbon sequestration and emission reduction without substantially altering the livelihood / farming systems
  • Carbon assessment.
  • Carbon finance.
  • Institutions.
  • Capacity building.
  • Impact.

Innovations: Some of the main innovations in this project are the following:

  • Developing / assembling a CDM compliant framework ( i.e. SMART-CDM), which simultaneously enables small holders to improve their livelihoods and obtain carbon credits
  • Harnessing small holders capacity in community organization and collective decision making in choosing and applying smart practices for carbon sequestration, emission reduction, and improvement in livelihoods
  • Achieving reduced emissions and enhanced C sequestration in farming systems, and unifying these two approaches (reduced emissions and enhanced carbon sequestration) in a single project
  • Aggregating small farms into grids and treating the grid as a single entity to meet minimum tradable carbon volume
  • Organizing grid members in a single legal entity for negotiations, accessing support, economizing costs and proportional benefit sharing while continuing their own livelihood enterprises
  • Building business development units, or incubators for representing and functioning on behalf of the community / grid in dealing with business related matters
  • Orienting researchers, business incubators, civic societies, and private sector on CDM protocol, C stock assessment and C finance and building their capacity for marketing C through different channels

Smart Practices: Apply a number of carbon sequestration and emission reduction interventions for generating/ enhancing multiple streams of livelihoods and better environmental impact for small holder farmers at the community level, through targeting, farmer testing, and up-scaling of the profitable portfolios.

Carbon Assessment: Test and apply strategies, tools and methods for measuring and monitoring baseline and carbon sequestration from above and below ground biomass and the emission reduction beginning from the initiation of the project activities on farm and on the landscape.

Carbon Finance: Develop carbon financing mechanisms by working with the existing conditional mechanisms for carbon incentives that facilitate, recognize and reward small holders for establishing and managing trees at farm and at the landscape level and for reducing emissions through other practices, based on acceptable standards and voluntary carbon markets.

Institutions: Establish a viable Special Purpose Vehicle (business development units, incubators /platform) for small holders to access emerging carbon finance markets through building support linkages with appropriate institutions for managing transactions, negotiations and harmonization of capacities. This body would also be able to provide forward and backward linkages between the community and the markets. The body is operated by professional, but controlled and managed by the community.

Capacity Building: Train teams of national scientists, development workers, NGO community, business venture/ corporate house representatives and other stake holders interested in the issue on a range of topics related to livelihood enhancement in conjunction with carbon finance in a variety of markets.

Impact: Analysis and dissemination of smart practices, carbon sequestration and emission reduction intervention research and development to support national action plans and policies that will trigger mainstream and up-scaling of the interventions on climate change agenda and livelihoods. This would also be facilitated by the preparation of policy briefs and policy dialogues with the concerned agencies in the country.

Early Outcomes and Lessons Learned

Has the project resulted in any outcomes or changes to date?

Initial assessment of these efforts indicates that farmer’s productivity and income as well as the employment opportunities, especially for the landless and women are increasing consistently and their input costs decreasing. For example, there is a 50% saving in the firewood use for cooking. They are also able to mechanize some of the crucial field operations through renting or by getting the custom services for those operations from the “Gramya Sampada Kendras”. These parameters along with the expansion of area under such interventions are being monitored.

A prior consideration was submitted and registered at the CDM. As of now the calculated CERs in the respective grids range between 11,544 and 12,988 CERs. It is worth mentioning that some programs and corporate houses have come forward to pay for carbon sequestration by putting upfront resources under their CSR Policy. At Andhra Pradesh grid farmers have been paid for tree planting and taking its care @ Rs. 250 ($5.00) / tree, through which farmers are getting more income than from their main field crop farming. They have also started to incorporate livestock as a result of increased fodder supply, and the use of animal manure in their farming system in the area.

Though the impact of this project is envisaged to be in the long run and its monitoring is in progress, a positive impact indication is the request by the surrounding villages for enlarging the grid and including them in it.

What lessons have you learned thus far that might be useful or applicable to other projects?

This project has turned out to be continuous learning ground for such an endeavor and there are a few important lessons that have emerged in the course of this exercise which are enumerated below:

  • Enabling small holders to apply smart agricultural practices for improving their livelihoods and benefiting from carbon finance is possible. However, innovative ways are required for achieving a significant impact, and this may include organizing the communities in legal entities and clearly setting their expectations, roles and responsibilities. This also involves enhancing community understanding on aspects of climate change, emission reduction and carbon sequestration interventions, carbon stock assessment, carbon finance, carbon markets, etc. and building its capacity on business component of carbon trading, including the PDD and negotiations in different market instruments.
  • Innovations are not a snap shot deal, especially where community involvement is warranted, and thus cannot be prescriptive. One may have to innovate at all steps.
  • Usually communities show interest in interventions that provide benefits quickly, both at farm and in the house hold. However, when sufficiently explained they opt for short, medium and long term interventions at the farm and household as well as land scape levels.
  • It’s extremely important to involve the profile of the community in such projects, including the women, landless, input and service providers.
  • It is often useful to assist the community in selecting their preferred interventions from a basket through ex-ante analysis using a set of bio-physical, socioeconomic and cultural criteria.
  • Making provisions for input supply locally, e.g. planting materials, etc. enhances the application rates of the chosen interventions.
  • The research designs may require adjustments in community participated programs as the communities continue to experiment and evolve their own new ways, however unscientific and non- systematic they may appear to be.
  • The impact pathways and scaling –up mechanisms for such projects should be considered as an essential part of the design itself. This becomes handy in monitoring the progress and in impact assessment.
  • The horizontal as well as vertical expansion, or the scaling up of certain practices / technologies/ concepts, etc. requires a thorough understanding of certain key considerations, e.g. knowledge systems, institutions, partners, setbacks and challenges, and putting these considerations in the scaling up process could accelerate it in a more systematic and assured way.
  • In addition to various other considerations in the scaling up efforts, robustness of the practice/ technology, etc., scientifically delineated application domains of it and a broad based buy in of the stakeholders are essential considerations that will “nail or fail” the effort.

What are some of the barriers or challenges the project has faced? How are you overcoming those?

  • Organizing the community and training them has taken and is taking longer time, much longer than expected. Using trained community members as resource persons in organizing the next community has been effective for this.
  • Communities, pampered by the government’s subsidy programs often look forward for free gifts even from research programs. Involving them from the very start of the project, clear explanation of the objectives and roles and responsibilities through group interaction and senior leadership of the communities on regular basis has been effective in overcoming some of this.
  • Keeping certain sections of the society totally out of loop of the project guarantees the destruction. Uprooting of plants and breaking of shoots, grazing of crops, poaching of the harvest, and stealing of fences are common ills in the rural settings. It is therefore, of utmost importance to engage them in certain aspects.

Are you currently sharing this information with internal and/or external partners? If so, how?

Quarterly and annual progress and achievement reports are submitted to the donors, which is also shared with the internal partners. Regular monitoring of the project is performed through presentations and stakeholders workshops involving NAIP, partners, other NARES partners, NGOs, donors, etc. We share this through television and radio broadcast, and also publish in peer reviewed journals, book chapters, manuals, policy briefs, etc.

Are there components of the project that could be scaled up (nationally; regionally; etc.)? What would be the challenges in doing so? How is this being done?

There are number of out puts and out comes in this project that we intend to scale up. The frame work and methodology of the scaling up process is currently being developed and refined through pilot field testing and a series of workshops, most recent of them was in August, 2012. What we are looking forward is to develop a generic process that takes into account the main drivers, constraints, opportunities, pre-requisites / pre conditions, institutions, partners, etc. so that the methodology can be applicable in varied situations.

Based on the results obtained so far, it seems that the protocol being developed and tested through this project would have a high degree of applicability and adoption throughout South Asia, particularly in India, especially in terms of improving the small holder livelihoods and employment opportunities for the landless.

As this activity is under a limited scope nationally funded project in India, the validation of scaling up protocol in other situations in the country and other countries of the region (representing ecological variability) is a challenge and restricts the validation process. We are on a constant look out for accessing some bilateral support for this activity.