Investment pattern and income distribution among farm families in Punjab

Farm mechanization plays vital role in enhancing farmers ‘productivity and profitability in Punjab. This study is an attempt to analyse the distribution of farm inventory, investment and income pattern, capital output ratio and factors affecting capital output ratio. The results shows that medium and large farmers have more farm inventory (tractor, electric motor, diesel engine and livestock) as compared to small farmers. About 50percent investment of large farmers is on machinery while marginal invested only 14 per cent. Large farmers earn majority (81%) of their income from crops while, marginal farmers earn 45 per cent from crops, 28 per cent from off-farm and 22 per cent from dairy enterprise. The value of capital output ratio for large farmers is less than other farm categories which indicates that their capital requirement to produce one unit of output is less. The results also show that capital output ratio has negative relationship with adult cattle unit per cent leased-in land and operational holdings. There is a need to encourage the farmers ’ organizations, custom hiring centres and cooperatives to provides the machinery to marginal and small farmers at the affordable price.