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