The agricultural sector has to be developed either by giving price incentive or by providing non-price stimulations like irrigation facilities, supply of HYV seeds and short duration varieties, adequate and timely supply of fertilizers, agricultural extension and training programmes etc. generally farmers decision in allocating the land to different crops depends on the returns they get by cultivation of particular crops which in term depends upon the remunerative prices. Thus the growth of particular crop depends on the farmer’s motive for allocating different resources to that particular crop. Than motive in general depends on the returns by cultivating the crop. Price plays an important role in the selection of crops and production of marketed surplus. Generally higher prices stimulate the increase in the area under a particular crop. Prices have become the most important determinants of the area allocated to different crops. Several measures of public policy can directly or indirectly influence the farmer’s decisions. In a free market economy price policy could be considered as one of the potent instrument affecting the farmer’s decisions regarding resource allocation.