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Abstract
There is widespread agreement on the need for land reform in Zimbabwe as a means of
reducing poverty. This paper assesses the potential consequences of a land-reform
scheme that draws on proposals from Zimbabwe’s government in 1998 and 1999. We
analyze the impact of the reform on resettled farm households and as a development
project for which we conduct cost-benefit analysis. The analysis, which considers costs
and benefits during a 15-year period, relies on a set of models of family farms that are
typical of those that would benefit from land redistribution. The cost-benefit analysis is
more comprehensive, also considering the different costs and benefits that affect the
government. The results of our analysis indicate that a government-supported land
reform could be economically viable under what we consider as realistic assumptions
regarding the performance of the beneficiaries and the costs that will be faced by the
government and other stakeholders. Land reform can generate sustainable livelihoods for
the beneficiaries. If viewed as a project, the NPV of the reform is positive for a discount
rate that is as high as 20%. The project can also increase employment in the agricultural
sector. The analysis takes a long-run perspective, covering a 15-year period. During the
first resettlement years, some disruption of agricultural production should be expected.
These results are preliminary and based on a partial equilibrium perspective. They are
driven by the assumption that the land reform is carried out in a manner that allows
farmers on the resettled lands to achieve their productive potential. Such an outcome
depends critically on the assumption that the farmers are able to operate in an enabling
environment, including critical government support, especially during years 1-5.