The objective of the present paper is to analyse the income pattern of the marginal and small farmers in rural Punjab. For this analysis, the state of Punjab has been divided into three regions on the basis of levels of agricultural productivity, i.e. low, medium and high productivity regions. On the basis of this criterion, it is deemed fit to select, Ludhiana district from the high productivity region, Faridkot district from the medium productivity region and Hoshiarpur district from the low productivity region. The study has concluded that average household income and per capita income is directly related with the agricultural productivity and farm-size. Since there is positive relationship between farm-size and farm business income, this makes a strong case for land reforms in favour of the marginal and small farmers apart from other measures helpful in increasing their income.