This article examines the role of the Indian Punjab government in addressing agricultural diversification through contract farming. It also analyzes prospects of diversification for the Punjab state employing the 59th Round of NSSO unit-level data. The findings suggest lack of policy effectiveness for diversification in terms of market institutions and prices which has failed to fetch better crop incomes for the diversified farm households. The analysis of the latest Punjab Contract Farming Act 2013 raises questions about the interventionist approach of the government. The insights from this article suggest that the government needs to strengthen infrastructure, marketing and pricing structure, and identify region-specific crops for diversification.
