First agroforestry credits and smallholder farmers
Bangladesh has achieved a significant milestone in climate finance and sustainable agriculture. The country issued its first-ever agroforestry carbon credits. These were issued under Verra’s VCS, and the credits were issued through Project 4456. This project was developed by Varaha ClimateAg Private Limited and the Sustainable Agriculture Foundation of Bangladesh (SAF Bangladesh).
The project has generated over 60,000 credits from 160 demonstration farms across the country. Through this initiative, smallholder farmers are restoring degraded land, improving water efficiency, and adopting climate-resilient agricultural practices based on high-density mango agroforestry systems. This project is a significant development for Bangladesh because it establishes a direct link between smallholder farmers and the global carbon market, opening a new source of climate finance for rural communities.
The initiative was originally designed to show that high-density mango plantations, which use less water and could be more profitable in the long term, could work for farmers in Bangladesh who need the money to support their families. Previously, this model had not been successfully implemented on a large scale in Bangladesh. SAF Bangladesh, with decades of experience working with rural farming communities, played a key role in adapting the model to local conditions and preparing it for wider expansion.
The project supports several of Bangladesh’s national priorities, especially the modernization of agriculture, improved land use efficiency, strengthened climate resilience, and the development of a more internationally competitive agricultural sector. The initiative demonstrates how climate projects can support both environmental and economic goals by linking sustainable farming practices with carbon finance.
Md. Farhad Zamil, the executive director of SAF Bangladesh, described the issuance as a meaningful achievement for Bangladesh and the participating farmers. He noted that this success reflects years of collaboration and technical work, and also creates new opportunities for the smallholder communities whose participation is central to the initiative. This achievement also marks a milestone in their partnership with the 2030 Water Resources Group (2030 WRG).
The 2030 Water Resources Group (2030WRG), part of the World Bank Group, provided technical support for the demonstration farm network. The organization facilitated the project's early stages and supported the development of a scalable model for climate-smart agriculture in Bangladesh.
Sustainable farming and international carbon markets
One of the most important benefits of the project is how carbon finance addresses a significant challenge for smallholder farmers: the long wait before generating income from perennial crops. Mango-based agroforestry systems can provide stronger and more stable returns over time, but the trees typically require around four years to produce significant harvests. For farmers who rely on farming to make a living, this delay often makes the change financially impossible because they cannot afford several years with limited income. Consequently, many farmers continue using lower-value agricultural systems, even though they are less sustainable and profitable in the long term.
Carbon finance improves this situation by providing farmers with an additional income stream during the transition period. According to the project developers, hundreds of thousands of dollars in shared carbon revenue are expected to be generated for participating farmers in 2026 alone by the first issuance of carbon credits. Additional payments are expected in future years as more carbon credits are sold.
This financial support could help farmers reduce risk, maintain household income, and invest in more resilient land-use practices while waiting for the mango plantations to mature. This project shows how carbon markets can do more than just help the environment; they can also help rural communities directly by providing economic benefits. With the support of carbon finance, the initiative has now expanded beyond its original proof-of-concept stage. The developers are targeting a total project scale of 30,000 hectares, which could significantly increase the number of participating farmers and the amount of carbon revenue generated in the future.
The project's potential implications are attracting attention from policymakers and climate finance stakeholders. If the model is successfully expanded, it could contribute to land restoration, improved rural incomes, greater climate resilience, and stronger agricultural exports. At the same time, it could help establish Bangladesh as an emerging participant in global carbon markets and demonstrate how nature-based climate solutions can support sustainable development goals.
Overall, the issuance of these credits represents more than a technical achievement under an international carbon standard. It indicates a new approach to agricultural development, connecting climate finance, sustainable farming, and rural economic growth. The project can provide smallholder farmers with both short-term financial support and long-term economic opportunities while also helping Bangladesh advance its broader climate and agricultural transformation objectives.
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