Agricultural Productivity in Zimbabwe, 1970-90

Abstract

About three quarters of the population of Zimbabwe is mainly dependent on agriculture, including wage remittances; the sector accounts for over I 2 % of GDP, about 24% of formal employment and is the main source of foreign currency, bringing in about 40% of the total. The sector is dualistic, with commerical farms producing nearly 70?% of output and contributing about 8o % of sales (95 % for tobacco, the main export); the rest is accounted for by semi-subsistence agriculture in the communal lands. Since independence, resources have been concentrated on improving the performance of agriculture in the communal areas, where output and sales have increased rapidly, largely due to the widespread adoption of hybrid maize. The commercial area has shrunk, by about I 5 %, as a result of land purchases for resettlement, which are intended to make the distribution of land more equitable. The process is likely to accelerate, since the Land Acquisition Bill, passed in February I 992, makes compulsory government purchases for resettlement easier. The government's dilemma is that the efficiency of the commercial farms is important to future development, since Zimbabwe can ill afford to lose scarce foreign exchange. This paper constructs indices of total factor productivity (TFP) for both the commercial and communal sectors, which show that TFP growth since independence has been impressive. The TFP results are supported by econometric estimation of a production function for the commercial farms and by estimation of the rate of return to agricultural research, which appears to explain most of the growth of productivity in the commercial sector.

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