The objective of the research was (1) to establish hypotheses about whether and to what extent non-farm income opportunities could contribute to the economic situation of marginal farm households; and (2) to ascertain the impact of non-farm activity on poverty, un- and under-employment and the low socioeconomic status of these households. The survey was carried out in the Faisalabad district of the Punjab, using two villages with differing access to non-farm income opportunities. It was found that, for 1972, at least one third of Pakistani farm households were marginal concerns. In at least one third of these the male members took on some kind of non-farm activity because of poverty. The main factor hindering taking on more non-farm activity is the household structure, as in most cases non-farm work can only be carried out if there are at least two men in the household to divide the farm and non-farm work between them. Incomes, employment and status of households engaging in non-farm activity rose considerably and it would seem to be a necessary condition for the alleviation of rural poverty.