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Abstract
It has been noticed in Punjab that living in nearly the same socio-economic environment, some of the
marginal and small farmers are financially viable, which means that they are able to earn enough income
to meet their farm as well as household expenditure, while others fail to do so. There are multiple factors
responsible for this viability. Broadly these factors are: farm size, off-farm income, income from dairy,
rational domestic expenditure, and productivity of crops. This paper has examined the contribution of
these factors towards the viability of marginal and small farmers by collecting data from three districts
(Ropar, Ludhiana and Bathinda) of the state. The rationalizations of household expenditure and farm
investment are also a source of enhancing the possibilities of financial viability of both the categories of
farming families. Therefore, on the policy front, all efforts should be made to create off-farm employment
opportunities for these farmers. The public investments should be made to remove the regional productivity
gaps, as it will enhance income of these farmers. Assuring remunerative prices and up-scaling of the
marketing and input supply facilities are the need of the hour to promote dairying and other allied activities
among these farmers. All these measures will go a long way in easing the financial stress on marginal and
small farmers of the area. In the prevailing economic scenario, it is difficult to pull out or push out these
farmers out of agriculture in a short-run and hence the solution lies in making them part-time farmers
having access to diversified sources of income as has happened in some of the South-East Asian countries.