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Abstract

A Tobit model censored at zero was selected to examine factors explaining differences in production efficiency amongst resettled farmers. Efficiency scores obtained from Data Envelop Analysis (DEA) were used as the dependent variable. From the factors inputted in the model, age of household head, excellent production knowledge and level of specialisation affected technical efficiency. Allocative efficiency was only affected by good production knowledge, farm size, arable land owned and area under cultivation. Factors which affected economic efficiency of the resettled farmers were secondary education, household size, farm size, cultivated area and arable land owned. None of the included socio-economic variables had significant effects on the allocative and economic efficiency of the resettled farmers. Thus, the allocative and economic inefficiencies of the farmers might have been accounted for by other natural and environmental factors which were not captured in the model. Efficiency of the resettled farmers can be improved significantly if the government focuses on increasing the education level of farming communities. The promotion of large farms through the establishment of co-operatives could also improve efficiency of the resettled farmers.

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