Circular Economy in Agriculture
Circular Economy in Agriculture
Context
In February 2026, the Government of India released a landmark report titled “Circular Economy in Agriculture: Waste to Wealth.” The report highlighted the growing success of the GOBARdhan (Galvanizing Organic Bio-Agro Resources Dhan) scheme, which now covers over 51.4% of India’s districts, marking a significant transition from waste-intensive farming to regenerative and resource-efficient agriculture. This reflects India’s commitment to sustainable development, climate mitigation, and income diversification for farmers.
About Circular Economy in Agriculture
Definition
A circular economy in agriculture is a regenerative production system that replaces the conventional linear model of “take–make–dispose” with a closed-loop system, where agricultural waste is reintegrated into the production cycle. It is based on the 6 Rs principle — Reduce, Reuse, Recycle, Refurbish, Recover, and Repair, ensuring optimal utilization of biological resources. This approach transforms organic waste such as crop residue, cattle dung, and food waste into valuable outputs like bio-CNG, biogas, compost, organic fertilizers, and biochar, thereby reducing environmental damage and enhancing resource efficiency.
Key Data and Facts
- Agricultural Waste Generation: India produces approximately 350 million tonnes of agricultural waste annually, including crop residues and livestock waste.
- Energy Generation Potential: Crop residues alone have the capacity to generate over 18,000 MW of renewable energy annually, contributing significantly to India’s clean energy transition.
- Economic Potential: India’s circular economy is projected to reach $2 trillion in economic value and create nearly 10 million jobs by 2050, highlighting its role in sustainable economic growth.
- Food Waste: Globally, about 1.3 billion tonnes of food is wasted annually, while in India, nearly 60% of food waste occurs at the household level, indicating the need for improved waste management practices.
- GOBARdhan Progress: As of January 2026, 979 biogas and bio-CNG plants are operational, converting organic waste into clean energy and organic manure.
Importance of Circular Economy in Agriculture
The excessive use of chemical fertilizers has depleted soil organic carbon and reduced soil fertility. The application of biogas slurry, compost, and organic manure derived from agricultural waste helps restore soil structure, improves microbial activity, and enhances long-term agricultural productivity.
Agricultural waste decomposition releases methane, a potent greenhouse gas. Circular economy practices capture methane through biogas plants and convert it into energy, thereby reducing emissions. This directly supports India’s commitments under the Paris Agreement and Net Zero target by 2070. The Unified GOBARdhan Portal helps monitor Compressed Biogas production and emission reductions.
Circular agriculture converts waste into economic assets. Farmers can earn additional income by selling crop residues, supplying dung to biogas plants, or producing organic fertilizers. This supports the goal of doubling farmers’ income and strengthens rural livelihoods.
The reuse of treated wastewater and greywater for irrigation under initiatives such as the Jal Shakti Mission reduces dependence on groundwater, conserves freshwater resources, and improves water sustainability in rural areas.
Circular agriculture reduces dependence on synthetic inputs and promotes efficient use of natural resources. It aligns with Sustainable Development Goal (SDG) 2 (Zero Hunger) and SDG 12 (Responsible Consumption and Production). Innovations such as biochar enhance soil moisture retention and improve drought resilience.
Major Government Initiatives
The GOBARdhan scheme promotes the conversion of cattle dung and organic waste into biogas, compressed biogas (CBG), and organic fertilizers, supporting clean energy generation and rural sanitation.
The government has allocated ₹3,926 crore (2018–2026) to promote crop residue management. Over 42,000 Custom Hiring Centres (CHCs) have been established, enabling farmers to access residue management machinery and reduce stubble burning.
The AIF has sanctioned ₹80,224 crore for over 1.5 lakh projects, including infrastructure for organic fertilizer production, waste management systems, and bioenergy generation.
With a corpus of ₹15,000 crore, this fund supports the scientific processing of animal waste and by-products, promoting value addition and circular livestock management.
This initiative focuses on solid and liquid waste management, helping villages achieve ODF Plus status while promoting resource recovery and sustainable sanitation.
Challenges in Implementation
The establishment of bio-CNG plants, compost units, and waste processing infrastructure requires substantial capital investment. Small and marginal farmers often lack access to finance and credit.
The collection, transportation, and processing of bulky agricultural waste from fragmented landholdings is costly and time-sensitive, particularly during the short interval between harvesting and sowing.
Limited access to advanced technologies, such as modular biogas reactors and efficient biomass processing systems, restricts large-scale adoption.
Traditional practices such as stubble burning continue due to convenience, lack of awareness, and immediate economic considerations, particularly in the Indo-Gangetic plains.
Organic fertilizers face stiff competition from highly subsidized chemical fertilizers like urea, affecting their commercial viability and market adoption.
Way Forward
Promoting Carbon Credit Mechanisms
Farmers adopting sustainable waste management practices should be integrated into carbon markets, enabling them to earn additional income through carbon credits.
FPOs can play a key role in establishing and managing decentralized bio-CNG plants, improving economies of scale and ensuring efficient waste management.
Greater investment in research is needed to develop advanced microbial solutions, efficient biomass processing technologies, and affordable decentralized waste-to-energy systems.
Providing equal policy support, subsidies, and distribution networks for organic fertilizers will enhance their competitiveness and encourage adoption.
Behavioral change through awareness campaigns and community participation is essential to promote waste segregation and sustainable practices at the grassroots level.
Conclusion
The transition to a circular economy in agriculture represents a transformative shift toward sustainable, climate-resilient, and economically viable farming in India. By converting agricultural waste into valuable resources, initiatives such as GOBARdhan, Crop Residue Management, and the Agriculture Infrastructure Fund are reducing environmental degradation while enhancing farmers’ income and energy security. Strengthening institutional support, technological innovation, and farmer participation will be crucial to scaling this model. The circular agricultural economy has the potential to transform agricultural waste from an environmental burden into a major economic opportunity, contributing significantly to India’s vision of achieving sustainable development and a Viksit Bharat by 2047.