A Profit Function Approach to the Efficiency Aspects of Land Reform in Zimbabwe Report as inadecuate




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The purchase of commercial farm land in Zimbabwe for resettlement has been a factor ingovernment policy since independence in 1980, but from l 980 to 1989 only 52 000 families wererelocated. The Land Acquisition Bill of 1992 made compulsory purchase easier and at present thegovernment has announced its intention to considerably increase the rate of resettlement. But Zimbabwehas a serious food security problem and the output effects of land redistribution are a matter of dispute. TheWorld Bank estimate that 3 million hectares of commercial farmland are under-utilized is contested by theCommercial Farmer's Union. Fitting a normalized restricted profit function to the data for the commercialsector allows estimation of the shadow price of commercial farm land. We find that the model suggeststhat the World Bank is correct, in that the marginal value product of land is negative, meaning that there isunder-utilization. However, negative values of capital assets are common when real interest rates arenegative, so the result should be treated with some caution. Also, the problem of identifying the unutilizedland is not trivial and redistributing intra-marginal land would have output effects.

Subject(s): Agribusiness

Agricultural Finance

Land Economics/Use

Issue Date: 1997

Publication Type: Conference Paper/ Presentation

PURL Identifier: http://purl.umn.edu/198048 Page range: 77-87

Total Pages: 11

Record appears in: International Association of Agricultural Economists (IAAE) > 1997 Occasional Paper Series No. 7





Author: Khatri, Y. ; Jayne, T.S. ; Thirtle, C.

Source: http://ageconsearch.umn.edu/record/198048?ln=en



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