Peri-urban agriculture has brought out two clear impacts on farmers and the rural economy. The fi rst is the long-term impact of rise in land prices associated with reduced size of holding for agriculture, and the second, the short-term impact of rise in agricultural wages. In peri-urban and rural agriculture, the contribution from wage income exceeds 50%. Nevertheless, the per capita incomes of farmers in these scenarios are 50% lower than the per capita income of an average Indian. Steps are suggested to improve the economic situation of peri-urban farmers.