This concept note examines the key challenges facing Punjab’s agricultural sector, including rising cultivation costs, stagnating or declining yields in major crops like cotton and paddy, and limited market access due to the dominance of government procurement at minimum support prices. Despite historically contributing to India’s food security, Punjab’s agricultural income growth has plateaued, and the sector remains heavily dependent on a few commodities such as wheat, paddy, milk, and meat, with minimal diversification into allied activities or high-value crops. The absence of private players in agricultural markets, low cropping intensity in several districts, and a pressing need to diversify 2.4 million hectares of land away from paddy underscore the structural vulnerabilities in the state’s farming economy.

The report highlights urgent areas for intervention, including scaling up milk and meat processing industries, promoting agroforestry and organic farming, improving fertilizer quality control, and addressing entrenched issues like water pollution. It also points to the underutilization of technology and price forecasting tools, which hampers farmers’ ability to respond to market signals. By fostering diversification, private investment, sustainable practices, and technology adoption, Punjab can revitalize its agricultural sector and improve farmer incomes while reducing environmental stress.