“We Create A Natural Capital Asset Business, Achieving Carbon Removal, As Well As Soil Fertility, Biodiversity and Community Benefits,” Madhur Jain, CEO Varaha

"We Create A Natural Capital Asset Business, Bringing Soil Fertility, Biodiversity, All These Benefits Together," Madhur Jain, CEO Varaha - Carbon Herald
CEO Madhur Jain. Credit: Varaha

The acceleration of climate change mitigation is urgent and requires input from all potential solutions. The application of regenerative practices on agricultural lands is one of those solutions, increasing multiple benefits for the ecosystems along with reducing emissions.

Varaha is a leading startup specializing in nature-based solutions like regenerative agriculture, agroforestry, and biochar projects that facilitate climate adaptation, biodiversity, water conservation, soil fertility and generate income for smallholder farmers.

We interviewed Madhur Jain, CEO and co-founder of Varaha who shared more about the company’s journey since its foundation in 2022, how they support the regenerative agriculture projects cycle, and how they make sure carbon removals are actually generated.

What is Varaha and what is your business model?

We help decarbonize agriculture and increase soil fertility for smallholder farmers while adding value for them. We work with partners on the ground, such as NGOs, farming cooperatives and agri businesses, to help farmers shift towards more sustainable practices and grow food in a sustainable fashion.

We have built an entire tech platform, which is science led, that helps validate the presence of sustainable practices and quantify both emission reductions and carbon sequestration that happens in the soil as a result of these practices.

We then convert that into carbon credits and the majority of the revenue from their sale goes back to the smallholder farmers. We are unique from the rest of the players in the space because we make smallholders the focus of our business.

We look at farmers and their farmland as our focus. The land can be used for Regenerative cropping systems or can also be utilized for agroforestry based plantations. Farmers residue from the crops can be turned into biochar to create a sustainable input for the soil, while also locking carbon for thousands of years. Rather than looking at activities in a cycle, we look at them in a much more full stack solution for smallholder farms according to the geographies we operate in. This is our unique approach technically.

Where does Varaha operate?

We are headquartered in India at the moment. But we focus upon smallholder farmers across the globe. At present, we are operational in India, Nepal, Bangladesh, and Kenya.

Women smallholder farmers from Varaha’s Indo-Gangetic Plains focused on regenerative agriculture project. Credit: Varaha

What are your expansion plans?

With the infusion of recent capital, the idea is to increase the smallholder farmers income via the carbon markets while increasing soil fertility given we’re a science and tech platform. We want to maximize the impact on multiple geographies so we are expanding across Southeast Asia, in locations like Vietnam, Thailand, and Philippines. On the East Africa side, we’ll be exploring Zambia, Tanzania, and Ethiopia. These are the targets for the next few quarters in terms of geographical expansion.

Relevant: International Soil Carbon Industry Alliance Launches At COP28 To Advance Carbon Sequestration In Agriculture

The second kind of expansion is in terms of product lines. As of today, we are involved in regenerative agriculture, agroforestry and biochar. In a few months time, we are looking at adding enhanced rock weathering to our portfolio.

How many farmers do you work with right now?

We have worked with more than 80,000 farmers in these countries covering more than 700,000 acres in total.
What are the types of CDR projects that you manage?

Smallholder farmers form the core of our work. Regenerative agriculture, which is the prime point of entry for carbon, is both reduction and removal. Then agroforestry, which is pure removal, and biochar, which is long term removal. The fourth category that we are laying down the plan for and will launch later this year is enhanced rock weathering, which is locking carbon for even longer periods.

Women smallholder farmer who is part of Varaha’s ARR-focused South India-based project. Credit: Varaha

Could you please share in more detail, what are the sustainable agriculture practices that you help farmers implement? How are emissions removed or reduced through them?

Some of the practices are zero tillage, reduced tillage, crop diversification and crop residue incorporation. Indian agriculture has a problem with 116 million metric tons of residues being burned on the farm. We also help farmers get access to machinery that convert residue to biochar that they can put back into the ground.

In certain cropping systems like rice, we help farmers reduce the water use, which then reduces methane emissions drastically. There are two ways to reduce methane emissions – one is an alternate wetting and drying and the other one is direct seeding of rice.

We are mainly focused on direct seeding of rice as opposed to wetting and drying so far, but the science works in the same fashion in terms of how methane emissions get reduced.

Rice is being grown traditionally by flooding the land and keeping it flooded throughout the season. You also end up irrigating multiple times. In the case of direct seeding of rice, what happens is you plant directly the seed in the ground without flooding the fields. You just maintain a minimum moisture level in the soil rather than flooding it and can save upto 30-35% water.

Women smallholder farmer who is part of Varaha’s ARR-focused Nepal-based project. Credit: Varaha

An anaerobic situation is created in the soil when the rice field is under a flooding condition and due to this anoxic situation, methanogenic microbes become activated. But in the DSR field, due to an aerobic condition, methane producing chains become weak and the total amount of methane emission is very less compared to a transplanted rice field.

Would you please walk us through the end-to-end process of how carbon credits are generated?

For example, as the farmers need to be transitioned from transplanting, which is flooding, to direct seeding of rice, which is a regenerative agriculture practice, we find partners on the ground who are interested in helping them do that. Those partners are organizations and NGOs that work with millions of farmers and have already established trust with them.

We train the staff of our partners that we work with on the ground. We teach them how different pieces work, what are the various benefits regenerative practices provide to the soil, productivity and fertility in the long term. We explain what are the different machineries and aids required for these practices. We have an operations team that trains the teams of our different partners. We also work with MERSE on a day to day basis to provide access to machinery and we negotiate on their behalf for renting them out, deploying them, and doing demonstrations. This is how operationally the process of applying the practices is done.

Then Varaha also does the entire digital MRV part of validating the regenerative practices. We are doing the quantification of both reduction as well as soil organic carbon sequestration, for which we collect huge amounts of data. We deploy people on the ground to collect a massive number of soil samples and we test them. Once the quantification is done, it goes through an audit process of the Carbon Registry that we work with.

Smallholder farmer who is part of Varaha’s ARR-focused South India-based project. Credit: Varaha

Once the audit is performed, the documents are submitted back to the Registry. Then, the Registry traditionally issues the credits. The majority of the income from the sale of the credits goes back to the farmers. That’s how the entire cycle works.

For the biochar application, we work with partners that provide the machinery for the production of biochar. We also work with three standards right now – Verra, Puro Earth and Carbon Standards International AG. We select the Registry but not the auditor who comes on the ground to perform the audit process.

How do you sell the credits – directly or via carbon marketplaces?

It’s both – at some cases we sell directly but we also work a lot with marketplaces. Right now we are moving towards a more balanced mix of both direct and non-direct sales. For the first 18 months as we are a two year old company, we acknowledged the fact that rather than hiring a full fledged sales team, we can work with high quality marketplaces who understand the science and tech part of our systems, are able to evaluate the credits properly and get the right price for them.

That was better for us than assigning 10 sales people. Now that we are a bigger name, we are getting a lot of direct inbound as well from some large companies and funds who want to buy credits. Marketplaces, however, still add a tremendous amount of value as well so we don’t want to move away from them.

How important is the voluntary carbon market for your business?

We are mostly present completely in the voluntary carbon markets and we see them growing drastically. There is, however, an increasing openness from different governments and countries for corresponding adjustments.

We see compliance and voluntary markets converging on the nature-based carbon removal solutions and there may not be too much differentiation. Today, we operate completely on the voluntary carbon market.
With a focus on how to decarbonize agricultural value chains, which we are doing right now, and mostly happens through carbon offsets, we can also help food and agricultural companies to decarbonize their own value chains.

Credit: Miha Creative | Shutterstock

So other than voluntary carbon markets, we may also look at SBTi-based insetting methods
in our coming projects.

What does your MRV process entail?

There are three parts to the digital MRV process. The first one is data collection from the ground. The second part is validation of the farmers’ practices. For this we have built satellite based models. We collect thousands of data points from the ground and use the data to train the satellite imagery based models to be able to validate whether farmers are actually transitioning to sustainable practices or not.

Once we validate the practices, it comes the third part of the quantification process. We use cultural scientific biogeochemical models that take into consideration the cropping system, geography practices and the soil types. It takes into consideration the localized soil data that we collect.

We are also unique as we partner with research institutions to put glass chambers on the ground. The glass chambers capture gasses being emitted under different scenarios, to create a high quality data library of our own. The glass chambers are also able to measure the difference in practices across different cropping systems and this data set is used to calibrate the biogeochemical models for localized conditions.

Then we use the data to calibrate the models to quantify the emission reductions. The data change in soil organic carbon gets quantified into carbon dioxide equivalent. And that’s how the measurement process works.

You recently raised $8.7 million in a funding round, how do you plan to utilize the investment?

Varaha has raised a total of $8.7 million led by a global VC fund called RTP global. Other participants in the round are Norinchukin Capital, part of the VC arm of a Japanese bank called Norinchukin Bank. We also have the IMC Ventures from Singapore participating.

Co-founders of Varaha: (left to right) Vishal Kuchanur (CTO), Ankita Garg (COO), Madhur Jain (CEO). Credit: Varaha

As we are going into multiple geographies and multiple product lines on carbon sequestration, we are just doubling down our talent pool, and we have some senior hires there. Then we also have business development costs for entering into multiple geographies and doing our due diligence when launching in those countries. Another part of the money allocation is executing on new product lines.

Relevant: Varaha Raises $8.7M In Series A To Boost Sustainable Agriculture In Asia And Africa

What sets you apart from other players in the sector?

Climate change provides a great opportunity for founders because it is such a big problem to solve. I think what sets us apart is the traction that we have gained in a very small period of time. The founders’ background plays a key role. My entire academic background, as well as professional background has been involved around working with smallholder farmers in agriculture. I’m also an agricultural engineer by background.

Similarly, my co-founder Ankita has also spent 15 years working in agriculture. The third co-founder, Vishal is on the tech side and has also spent time building products from scratch. We are bringing a very strong domain expertise and experience of scaling businesses and delivering impact.

We also see this business as a natural capital asset business, wherein we are trying to quantify not just emission reductions, but also other important environmental aspects such as water use, soil fertility, biodiversity, community benefits. We are actually bringing all these benefits together to create a single asset in which we are only commercializing emission reductions. We do see it though as a much more well rounded product delivering much more value to the ecosystem and more importantly to the smallholder farmers.

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