An Analysis of Cost of Cultivation, Price and Profit of Wheat and Paddy in Punjab

Punjab is a small but major agricultural state of India, dominated by small and medium farmers. Due to its contribution of rice and wheat in the national pool it is called the food bowl of India. Agriculture performance has always remained a major factor in growth of this state. But it is observed in most of the studies that Punjab economy has recently experienced deceleration in growth in general and in agricultural growth in particular especially after liberalization. Cost of cultivation per hectare and per quintal has increased many times but productivity and MSP have not increased at that pace. Therefore, net profits of the farmers are declining and have become even negative over cost of cultivation especially in case of paddy, when calculated by taking yield data of SAP.