ECONOMICS OF SMALLSCALE BROILER PRODUCTION IN ABUJA, NIGERIA: APPLICATIONS OF STOCHASTIC FRONTIER MODEL AND PRINCIPAL COMPONENT ANALYSIS

Abstract

This study examined economics of smallscale broiler production in Abuja, Nigeria: applications of stochastic frontier model and principal component analysis The specific objectives were: identify the socio-economic characteristics of smallscale broiler farmers, analyze the costs and returns of smallscale broiler production, evaluate factors influencing output of smallscale broiler production, determine the technical efficiency index of smallscale broiler farmers, evaluate factors influencing technical efficiency of smallscale broiler farmers, and identifying the constraints facing small-scale broiler production. A simple random sampling technique using ballot-box raffle draw method was used. Primary data were collected from smallscale broiler producers through the use of well-structured and well-designed questionnaire. Data obtained were coded and analyzed using descriptive statistics, gross margin analysis, financial analysis, stochastic frontier model, and principal component analysis. The results show that 76.7% of small-scale broiler farmers were between 31-50 years of age. The mean age observed was 41.3 years. About 66.7% of the smallscale broiler farmers were male, and 43.3% of them were married. The gross margin of smallscale broiler farmers was N 165, 465. The gross margin ratio was 0.507.This means that for every one (1) naira invested in smallscale broiler production, 51 kobo covered profits, taxes, expenses, and depreciation. The rate of returns of the investment was estimated at 1.02 and the operating ratio was 0.9719. Feed input (P< 0.01), chemical input (P < 0.10), stocking capacity (P <0.01), drugs and antibiotics (P < 0.01) were factors influencing output of smallscale broilers sales. The inefficiency component shows that contact with extension agent (P <0.05), level of education (P< 0.05), and farm experience (P < 0.10) were statistically significant. The mean value for technical efficiency of the smallscale broiler farmers was 0.56, leaving a gap of 0.44 for improvement. The constraints facing smallsscale broiler farmers were: high cost of feed, difficulty in obtaining loan, problem of diseases outbreak, high cost of transportation, and non-remuneration prices of broilers. The retained components of the constraints facing smallscale broiler farmers explained 81.19% of the variations of the components included in the model. The study recommends that policies which will encourage smallscale broiler production be formulated and implemented. Also, measures should be put in place to address the challenges of high cost of feeds through proper agricultural subsidies.

Keywords

• broiler production
• stochastic frontier model
• principal component analysis
• nigeria