Capitalisation of small farms in Punjab: Magnitude and policy issues

Punjab agriculture is highly mechanized and this trend encompasses even the marginal and small farms. Higher costs with limited scope of improvement due to paucity of resources is shrinking the avenues of profitable farming. The present study, based on primary data reveals that the per unit fixed costs on marginal and small farms are high, primarily due to small size of land holding. In order to make farming profitable for this stratum, it is important that such costs need to be reduced. Easy availability of inputs and machinery at special subsidized rates is of paramount importance to generate a potential for sustainable agriculture for these farmers. In this direction, invigorating the numbers and capacity of custom hiring farm machinery service centres need to be looked into, and facilitation of farm inputs at nominal prices is required to reduce the cost of production and to raise the farm income.