AN ECONOMIC ANALYSIS OF BROILER PRODUCTION IN THREE STATES OF NIGERIA
AN ECONOMIC ANALYSIS OF BROILER PRODUCTION IN THREE STATES OF NIGERIA
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Date
1998-05
Authors
LAWAL, ZAKARIYA'U
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Abstract
Nigeria is a country in dire need of a quick animal protein source to meet
up with the demand of its ever increasing population. Development of poultry
industry has been identified as one of the quickest means of bridging this
deficiency gap. The development of this industry has, however, been hindered by
many problems and the broiler enterprise has been found to be the worst affected.
The biggest problem associated with broiler enterprise is the high cost of inputs
used in the production process. This results in low profit to the producer and the
high cost price to the consumer resulting in very low demand for the product. As
such, determinants of costs and returns together with efficiency measures of
financial success for the broiler enterprise are analysed in this study.
A total of 40 poultry farms were visited out of which 19 farms that produced
broilers were considered for the study. The low size of 19 broiler farms indicate
that majority of poultry farms are concentrating on layer production, and this also
had an implication on the analytical framework used to achieve the objectives of
the study. Descriptive, quantitative statistics, and net farm income analysis were
used in the analyses and the following major conclusions were made: (a) the net
farm income which is the central measure of overall financial success of a farm
was found to be positive in most of the farms and increased with the scale of
production; (b) the returns to factors of production (labour and management) are
lower in small farms when compared to large farms. Return on capital for the
various farms was not found to differ significantly but was seen to be related to
efficiency of management. The average return on capital in the study area is about
45% which is higher than the current bank lending rate of 21%; (c) the gross ratio
which measures the ultimate solvency of farms was found to be about 0.60 for the
broiler farms and does not differ significantly between small and large farms at
lower level of production; (d) the operating ratio which shows the proportion of
gross income that goes to pay for the operating costs is about 0.72, i.e. 72
percent, which is quite high. There is also no significant difference between known
classes of farms which is due to the fact that all producers obtained inputs from
a common market; (e) the fixed ratio which measures the proportion of gross
income that goes to service fixed resources is under 5 percent in all the farms.
This indicates the rudimentary stage of poultry industry with little fixed costs
components.
Based on these results, it can be concluded that broiler production, despite
the current decline, is still a profitable venture. What is needed is to devise ways
and means of improving the efficiency of the production system to enable the
producer realise more income and profit from his investment to offset the current
high inflationary trend being experienced in the country.
Description
A thesis submitted to the Postgraduate School, Ahmadu Bello University in partial
fulfillment of the requirements for the award of the degree of Master of Science
(M.Sc.) in Agricultural Economics.
DEPARTMENT OF AGRICULTURAL ECONOMICS & RURAL SOCIOLOGY
Faculty of Agriculture
Ahmadu Bello University, Zaria
Nigeria
MAY, 1998
Keywords
ECONOMIC,, ANALYSIS,, BROILER PRODUCTION,, THREE STATES,, NIGERIA