The paper analyses the performance of agriculture in Tamil Nadu using the exponential growth rates, level of protection and comparative advantage by estimating net protection coefficient, efficient protection coefficient, effective rate of protection and domestic resource cost. Productivity trends in Tamil Nadu have been positive irrespective of food and non-food crops. The potential loss in area of some crops was more than compensated by productivity. Rice and coton have comparative advantage justifying further protection. The factors of production for rice and cotton can be paid more than the present level under free trade and still remain competitive with imports. The protection coefficients and domestic resource cost showed that sugarcane and groundnut are highly protected and have comparative disadvantage domestically as compared to world trade. Given the premise that sugarcane in the state has productivity advantage in the country as a whole, what disturbs one is unit cost of production. The question is now to convert the comparative advantage into competitive advantage globally? The answer lies in diversification of sugar industry. Groundnut is the second largest crop in the state next to rice, which is being grown mainly in rainfed and low fertility soils. Tamil Nadu has comparative advantage in terms of productivity at national level. The strategy lies in reducing the unit cost of production and makes the crop economically viable.