The analysis of the farm level investment is a complex problem, being very useful in the planning as well as in policy making process. This paper is the first to attempt a systematic comparison of investment between small and large farms in West Bengal. There has been a growing interest in recent years in the pattern of the capital formation, and sources of farm investment between different categories of farmer. The paper identifies the pattern of investment on different farm assets viz., purchase of land and land improvement, livestock, machinery, farm building, irrigation equipments and perennial crops.   Data for the study was generated through a sample survey of 90 farm households from two districts in West Bengal. The rate of capital formation increased as the farm size increased. Purchase of irrigation appliances and land were the major item of capital formation in the farms of both small and large categories. Large farms invested highest on irrigation implements (` 66,467) and least on perennial crops (` 10,700). However, magnitude of investment was different across the different categories of farm. The per hectare investment on different farm capital assets found higher in case of small farms (` 2,77,559 per ha) than large farms

(` 2,77,010 per ha). On aggregate, share of investment on different items was more than three times higher than investment made by small farmers in the last twelve month on their farms.

Highlights

• Per farm investment for large farms were found higher as compare to small farms but the per hectare investment were higher for small farms.
• Investment on farm machinery and farm buildings by large farms were 3 times and 2 times higher than small farms, respectively.