The present study has been taken to estimate marketed surplus and retention of wheat and rice for self consumption, seed, feed, wages and other payments in kind. Further it examines the role of various factors such as institutional, infrastructural, socio-economic, etc. in influencing household marketed surplus of these crops. The study is based on the survey of 300 paddy-wheat growing farm households, comprising 36 marginal, 60 small, 96 medium and 108 large farmers conducted in three major wheat and paddy growing districts of Punjab which together accounts for 26 per cent of the area as well as production of study crops in state. The comprehensive survey was conducted in the sample villages at end of crop year 2011-12. In addition to the primary data collected from the farmers, relevant secondary data were collected from various published sources. Tabular analysis and simple statistical tools such as averages and percentages were used for the interpretation of the results. The results of primary data revealed that overall average operational farm size on sample farms in state was 4.22 ha comprising 3.23 ha of owned land and 0.99 ha of leased in land. The incidence of leasing in land to increase the farm size was found to be directly and positively related to the farm size. Paddy and wheat were major crops on all the farm size categories and on average accounted for 40.38 and 45.66 per cent of the gross cropped area on the sample farms in state with average per farm production of 233.33 and 203.00 quintals. With some variations the crop productivity of paddy and wheat was relatively more on the larger size farms. Overall losses of paddy and wheat at different stages of handling accounted for 2.47 and 2.16 per cent of the total production of the respective crops. In both of study crops, harvesting stage accounted for the major proportion of the losses, followed by transportation, and marginal losses were observed during farm level storage. Total retention of paddy on sample farms on an average accounted for 0.64 per cent of farm production. Purpose-wise the home consumption, payment in kind, feed and seed accounted for 0.24, 0.22, 0.09 and 0.08 per cent of paddy production, respectively. Total retention of wheat on sample farms on an average accounted for 9.95 per cent of farm production. Purpose-wise the home consumption, seed, feed and payments in kind accounted for 6.26, 1.52, 1.61 and 0.14 per cent of wheat production, respectively. In both crops the percentage share of total as well as purpose-wise retention in total farm production declined with the increase in farm size. The marketed surplus accounted for 99.37 and 90.06 per cent of the paddy and wheat output, respectively. The entire marketed surplus of both of the crops was disposed of in months immediately after harvesting and about 99 per cent of this was sold to the government procurement agencies at the MSP. The average distance covered to sell the marketed surplus was less than 5 km. Among factors affecting the marketed surplus, size of the operational area, crop farming as main occupation and education had a positive relationship with the marketed surplus. On the other hand under social grouping the belonging of farm household to schedule casts or other backward class had shown the negative relationship with the marketed surplus of wheat and paddy crop.  Print media mainly the news papers was the major source of price information of the respondents. Effective price policy through significant increase in Minimum Support Prices (MSP), assured procurement and development of market infrastructure particularly for wheat and paddy coupled with relatively better production technology available has driven the state agriculture at remarkable rate and resulted into the emergence of paddy and wheat crops as the most secure and profitable ones in the state. Tremendous increase in production of paddy and wheat was coupled with simultaneous increase of marketed surplus/ arrivals of these crops.