Growth relationship between capital investments and paddy-wheat productivity in Punjab

Capital investment is a vital aspect of economic development. The behaviour of farm operators towards the investment in fixed farm assets is dependent on farm location, farm size and the product-mix. Timeliness and accuracy in farm operations through farm machinery is the dire need for obtaining optimal yield levels. Thus, an investigation on the extent of capital investment implicit for these farm assets is of paramount importance. An attempt has been made to establish relationship between capital accumulation and paddy-wheat productivity on Punjab agro-farms. The secondary data were procured from various sources and regression analysis was attempted to find out the correlations. The increase in investment on farm machinery and equipment showed a rise in productivity of main crops of paddy and wheat. Because of the indivisible nature of these assets in relation to the area under command there was a simultaneous increase in related fixed cost. An overview of the study indicated that investments in fixed farm assets, fixed cost of cultivation and yield levels of paddy and wheat continuously grew almost on all farm situations in the state over the period from 1970–71 to 2018–19. Investment on draught animals decreased considerably on all farms of the state during the study period because the bullock labour got substituted by tractors and other machines. Further, it was found that capital investment in fixed assets being the important component could enhance the productivity of paddy and wheat within increase in these investments.