Carbon Farming as an Emerging Agribusiness: Markets, Business Models, Risks and Farmer Value Capture

Soumyadeep Das *

Department of Agricultural Economics, Uttar Banga Krishi Viswavidyalaya, Pundibari, Cooch Behar, West Bengal-736165, India.

Shouvik Kar

Department of Agricultural Economics, Uttar Banga Krishi Viswavidyalaya, Pundibari, Cooch Behar, West Bengal-736165, India.

Poulami Chhetri

Department of Agricultural Economics, Uttar Banga Krishi Viswavidyalaya, Pundibari, Cooch Behar, West Bengal-736165, India.

Sambuddha Mukherjee

Department of Economics & Sociology, Punjab Agricultural University, Ludhiana, Punjab, India.

*Author to whom correspondence should be addressed.


Abstract

Carbon farming is increasingly presented as a means of rewarding land managers for storing carbon, reducing agricultural greenhouse gas emissions and supplying differentiated environmental attributes to buyers. Its agribusiness viability, however, cannot be inferred from biophysical mitigation potential or the existence of tradable credits. This critical narrative review integrates research on soil carbon science, environmental economics, contract design, voluntary carbon markets, farmer behaviour and agricultural value-chain governance. Peer-reviewed evidence and relevant institutional frameworks published through 9 August 2026 were examined with particular attention to methodological strength, conflicting findings and distributional outcomes. The synthesis distinguishes carbon removals from emission reductions, carbon-credit sales from value-chain payments, and gross revenue from the value ultimately retained by farmers. Empirical studies suggest that measurement uncertainty, counterfactual design, reversal exposure, fragmented holdings and costly verification constrain the conversion of agronomic improvements into reliable marketable units. Farmer surveys and choice experiments repeatedly identify delayed payment, repayment liability, unclear terms, data-sharing concerns and uncertainty about additionality as barriers, although stated preferences are not equivalent to observed adoption. Case evidence from Europe, Australia, India, Kenya and the United States shows that finance structure and control over credit rights can matter as much as headline prices for farmer benefit. Action-based, outcome-based and hybrid contracts allocate risks differently, while aggregation offers potential bargaining advantages without guaranteed cost savings or equitable distribution. The review develops a conditional value-capture framework centred on auditable environmental claims, transparent net-revenue accounting, farmer-controlled options, proportionate risk sharing and independent dispute resolution. It concludes that carbon farming can become a complementary agribusiness activity under credible measurement and inclusive governance, but cannot currently be assumed to deliver dependable stand-alone farm income or interchangeable offsets across practices and locations. Priority research needs concern longitudinal net farm returns, independent verification of environmental outcomes and comparative tests of contract and ownership arrangements.

Keywords: Agricultural carbon credits, soil organic carbon, payment for ecosystem services, additionality, smallholder inclusion, contract design, environmental integrity, farm profitability


How to Cite

Das, Soumyadeep, Shouvik Kar, Poulami Chhetri, and Sambuddha Mukherjee. 2026. “Carbon Farming As an Emerging Agribusiness: Markets, Business Models, Risks and Farmer Value Capture”. Journal of Advances in Biology & Biotechnology 29 (11):12-32. https://doi.org/10.9734/jabb/2026/v29i114553.

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