The study reviewed the agricultural policy initiates taken in relation to consequent changes in the various facets of Punjab agriculture over the last fifty years in order to identify the constraints and suggest policy measures for agricultural development. The Punjab agriculture had made spectacular growth during the period from year 1965 to 1985. The area, yield and production rates of the major crops, particularly paddy and wheat in the state increased many folds. This was made possible by implementing various agricultural development programmes. The irrigation facilities, use of chemical fertilizer, pesticide, area under high yielding varieties, mechanization etc. has increased along with implementation of effective price policy. This transformation of Punjab agriculture exhausted the production potential and new problems started emerging during the nineties. The productivity of major crops like wheat and rice stagnated leading to increase in cost of production and reduced profitability making many small and marginal farmers unviable. The predominance of paddy-wheat monoculture posed a serious threat to soil health, disturbing underground water, along with creating marketing problems and disturbing ecological balances in the state. To overcome these constraints, the study highlighted the need for evolution of high yielding variety of crops, contract farming scheme for diversification of agriculture and creation of more non-farm opportunities. Integrated use of balanced chemical fertilizers in conjunction with organic manures (compost and green manure) as well as promotion of Integrated Pest Management (IPM) technology needs to be encouraged. Further, study suggested to increase the allocation of public funds to strengthen the agriculture R & D, infrastructure for agro-processing industry, seed, biotechnology and product quality development.