Viability of Punjab’s Small Peasantry: Reflections from Field Data

In the current scenario of agricultural economy of Punjab, the viability issue of farming, particularly of small land holders is being highlighted by the academicians and policy makers. A farm is considered viable when its income surpasses its expenses, proving its potential to not only cover operational costs but also provide a surplus. On the basis of this criterion, in Punjab 93 per cent of small farms were viable as they were able to cover the crop production costs. However, farm household viability is dependent on generating a positive economic surplus, which is calculated by combining off-farm revenue with farm business income and deducting the domestic expenditures of the farm household. In this way 68 per cent of farm household were viable as these were able to generate sufficient income to cater their farm as well as household needs. It is observed that some farm holdings were nonviable due to insufficient farm income from agricultural pursuits, while the viability of the farm household was attained through non-farm income of the household. So far as the income and expenditure level of small and marginal farmers is concerned, an average annual income of these farm household (Rs.102830) was much lower than their annual expenditure (Rs142568). The logit model infers that family size, food expenditure and non-food expenditure reduced the viability, whereas crop income, dairy income and off-farm income have positively affected the viability of these farms. To enhance the viability of these farms, it is crucial to focus on generating off-farm employment and income in rural areas.