Agricultural production and crop yields in Punjab have nearly stagnated. Land and water, the two most critical resources on which Punjab's rural economy is built, have sharply deteriorated over time. Profit margins of the farmers have come down drastically. The paper argues that there is an urgent need to diversify the state's agrarian economy not only in the narrow sense of diversification within the crop husbandry sector, but also in its wider sense, i e, to promote allied agricultural and non-farm activities and agro-processing in rural area.
