Understanding causes of interpersonal conflicts, related costs, and the effects on investment in agriculture are important concerns of social sciences. The present study was designed to explore these aspects in relation to climate change, since rising temperature and precipitation are considered crucial causal factors in fueling interpersonal conflicts. The study used cross-sectional data collected from rural farm households from a large district of Pakistani Punjab. Cost of conflicts was estimated using standard economic methods whereas factors affecting interpersonal conflicts were estimated through employing logit model. The study found that interpersonal conflicts cost US$135 per month for following the proceedings of the conflicts filed in the court. Households involved in conflicts spent significantly very few resources in purchasing farm inputs which in turn declined productivity of maize (28%) and sugarcane (19%). Warm temperature, precipitation, and windstorm were perceived by households as causal factors for interpersonal conflicts. Socioeconomic characteristics namely, farm size, livestock, family size, and high monthly income of household, were significantly associated with interpersonal conflicts. The study concludes important policy implications.