Determinants of cost inefficiency in poultry production: evidence from small-scale broiler farms in the Ashanti Region of Ghana


This paper examines the extent of cost inefficiency at 120 small-scale broiler farms in the Ashanti Region of Ghana by the use of stochastic frontier cost function, which incorporates cost inefficiency effects. Furthermore, farm-specific determinants that help explain why cost inefficiencies are different across broiler farms are identified. The findings confirm the presence of cost inefficiencies in small-scale broiler production in the area studied. Specifically, the results suggest that the broiler farms in question have the potential to reduce their production costs by 13.6% by being more efficient in cost management. The findings further indicate that experience in broiler production, an increase in farm size, veterinary contacts, use of self-prepared quality broiler feed, and membership in the Poultry Farmers’ Association (PFA) all help minimize cost inefficiency. On the other hand, the findings show that cost inefficiency appears to worsen with an increase in the market age of a farm’s broiler birds.

This is a preview of subscription content, access via your institution.


  1. 1.

    GH¢1 = US$0.67 at 2011 rate (Bank of Ghana)

  2. 2.

    All the sampled broiler farms use commercial starter feed during the brooding stage. However, after brooding, some farms rely on self-prepared feed. The mean value for the type of feed used is, therefore, measured after the brooding stage.


  1. Aigner, D. J., Lovell, C. A. K, and Schmidt, P. (1977). Formulation and Estimation of Stochastic Frontier Production Function Models. Journal of Econometrics, 6, 21–37

    Article  Google Scholar 

  2. Alrwis, K. N, and Francis, E. (2003). Technical, allocative and economic efficiencies of broiler farms in the central region of Saudi Arabia: Data envelopment analysis approach. Journal of the Saudi Society of Agricultural Science, 1, 73–99.

    Google Scholar 

  3. Aning K. G, Turkson P. K., & Asuming-Brepong S .(2008). A Pro-poor HPAI Risk Reductions Strategies in Ghana, Background Paper, University of London, International Food Policy Research Institute and International Livestock Research Institute. Africa/Indonesia Team Working Paper No. 2.

  4. Agritrade. (2013). Poultry sector: Background and key issues. Executive brief.

  5. Ashagidigbi, W.M, Sulaiman S.A., & Adesiyan, A. (2011). Technical and Allocative Efficiency of Poultry Egg Producers in Nigeria. Agricultural Journal, 6, 124–130

  6. Balcombe, K., Fraser, I., Latruffe, L., Rahman, M. and Smith, L. (2008). An application of the DEA double bootstrap to examine sources of efficiency in Bangladesh rice farming. Applied Economics, 40, 1919–1925.

    Article  Google Scholar 

  7. Battese, G.E. and Coelli, T. (1995). A model of technical inefficiency effects in a stochastic frontier production function for panel data. Empirical Economics, 20, 325–332.

  8. Begum, I. A., J. Buysse M., Alam, J., & Van Huylenbroeck, G. (2010): Technical, Allocative and Economic Efficiency of Poultry Farms in Bangladesh. World’s Poultry Science Journal, 66, 465–475

    Article  Google Scholar 

  9. Coelli, T., Prasada Rao, D.S., O’Donnell C. J., and Battese G.E. (2005): An Introduction to Efficiency and Productivity Analysis. Springer Science + Business INC. United States of America. SPIN 11053217

    Google Scholar 

  10. Dziwornu, K. R. (2014). Econometric Analysis of Factors Affecting Competitive Advantage of Broiler Agribusinesses in Ghana. Journal of Development and Agricultural Economics, 6, 87–93.

    Article  Google Scholar 

  11. Dziwornu R. K. and Sarpong D. B (2014). Application of the Stochastic Profit Frontier Model to Estimate Economic Efficiency in Small-Scale Broiler Production in the Greater Accra Region of Ghana. Review of Agricultural and Applied Economics, 17, 10–16

    Article  Google Scholar 

  12. Ekunwe P. A., Soniregun O. O. and Oyedeji J. O. 2006. Economics of Small Scale Deep Litter System of Egg Production in Oredo Local Government Area of Edo State, Nigeria. International Journal of Poultry Science, 5, 81–83.

    Google Scholar 

  13. Ezeh, C. I. , Anyiro, C.O., and Chukwu, J. A. (2012). Technical Efficiency in Poultry Broiler Production in Umuahia Capital Territory of Abia State, Nigeria. Greener Journal of Agricultural Sciences, 2, 001–007.

    Article  Google Scholar 

  14. Farrell, M.J.(1957):The Measurement of Productive Efficiency. Journal of the Royal Statistical Society, 120, 253–290.

    Article  Google Scholar 

  15. FAO, Food and Agriculture Organization, (2014): Poultry Sector Ghana, FAO Animal Production and Health Livestock Country Reviews, No.6, Rome.

  16. Giroh, D. Y., Waizah, Y, and Umar, H. Y. (2010). Technical efficiency and cost of production among gum Arabic farmers in Jigawa State, Nigeria. Report and Opinion, 2, 52–57

  17. Goodison, P. (2015). The Impact of EU Poultry Sector Policies on Sub-Saharan African Countries. Initiativet for Handel Og Udvikling (IHU) Report>

  18. Killebrew, K., Plotnick, R. and Gugerty, K. G. (2010). Poultry market in West Africa: Ghana, EPAR Brief No. 83: Seattle: Evans school policy analysis and research, University of Washington.

  19. Kodde, D., and Palm, F. (1986). Wald Criteria for Jointly Testing Inequality Restrictions, Econometrica, 54, 1243–1248.

    Article  Google Scholar 

  20. Kumbhakar S.C. and Lovell C.A. (2000). Stochastic Frontier Analysis. Cambridge University Press, Cambridge

    Google Scholar 

  21. Lansink, A. O. and Reinhard, S. (2004). Investigating technical efficiency and potential technological change in Dutch pig farming. Agricultural Systems, 79, 353–367.

  22. Lawal, M. A. (2007). Efficiency of sweet orange production among small scale farmers in Osun State, Nigeria. African Journal of General Agriculture Studies on Population and Health, 3, 127–132.

  23. Lovell, C.A. (1993) Production Frontiers and Productive Efficiency, In: Fried, H.O., Lovell, C.A. and Schmidt, S.S. (Eds). The Measurement of Productive Efficiency, 3–67 Oxford University Press, New York, USA

    Google Scholar 

  24. Lovell C. A. (2008). Frontier Analysis in Health Care. University of Georgia, Athens.GA 30602, USA

    Google Scholar 

  25. Maina, F., Mburu, J., Gitau, G., Van Leeuwen, J. and Negusse, Y. (2018). Economic efficiency of milk production among smallscale dairy farmers in Mukurweini, Nyeri County, Kenya. Journal of Development and Agricultural Economics, 10, 152–158.

    Article  Google Scholar 

  26. Meeusen, W., and Van Den Broeck, J. (1977). Efficiency Estimation from Cobb–Douglas Production Functions With Composed Error. International Economic Review, 18, 435–43.

    Article  Google Scholar 

  27. Murillo-Zamorano, L. R. (2004). Economic Efficiency and Frontier Techniques. Journal of Economic Surveys. 18, 33–77.

    Article  Google Scholar 

  28. Netherlands Enterprise Agency (NEA) (2015). Analysis poultry sector Ghana: An inquiry of opportunities and challenges. The Embassy of the Kingdom of the Netherlands, Accra

    Google Scholar 

  29. Ng’eno, V., Lagat, B. K., Korir, M. K., Ngeno, E. K. and Kipsat, M. J. (2010). Resource use efficiency in poultry production in Bureti District, Kenya. 2010 AAAE Third Conference/AEASA 48th Conference, September 19-23, 2010, Cape Town, South Africa 97094, African Association of Agricultural Economists (AAAE).

  30. Ogundari, K., Ojo S.O. and Ajibefun, I.A. (2006): Economies of Scale and Cost Efficiency in Small Scale Maize Production: Empirical Evidence from Nigeria. Journal of Social Science, 13, 131–136

    Google Scholar 

  31. Oji, U. O. and Chukwuma A. A.(2007): Technical Efficiency Of Small Scale Poultry-Egg Production In Nigeria: Empirical Study Of Poultry Farmers In Imo State, Nigeria. Research Journal of Poultry Sciecies 1, 4, 16–21

    Google Scholar 

  32. Oluwatayo, I. B., Machethe, T. A. and Senyolo, M. P. (2016). Profitability and Efficiency Analysis of Smallholder Broiler Production in Mopani District of Limpopo Province, South Africa. Journal of Agribusiness and Rural Development, 1, 145–154

    Google Scholar 

  33. Pica-Ciamarra, U. and Otte, J. (2010). Poultry, Food Security and Poverty in India: Looking beyond the Farm-gate. World’s Poultry Science Journal, 66, 309–320

  34. Sahel Capital (2015). An Assessment of the Nigerian Poultry Sector. Sahel Capital (Mauritius) Limited. Poultry Report Volume 11.

  35. Schmidt, G. S. (2008). The effect of Broiler Market Age on the Performance Parameters and Economics Revista Brasileria de Ciencia Avicola, 4, :223–225.

    Google Scholar 

  36. Sharma, K.R., Leung, P. and Zaleski, H.M. (1999) Technical, Allocative and Economic Efficiencies in Swine Production in Hawaii: A Comparison of Parametric and Nonparametric Approaches. Agricultural Economics 20: 23–35.

    Article  Google Scholar 

  37. Theriault, V, Serra, R (2014): Institutional Environment and Technical Efficiency: A Stochastic Frontier Analysis of Cotton Producers in West Africa. Journal of Agricultural Economics, 65, 383–405

    Article  Google Scholar 

  38. Tuffour M. and Atta Oppong B (2013). Profit Efficiency in Broiler Production: Evidence from Greater Accra Region of Ghana. International Journal of Food and Agricultural Economics, 2, 23–32

    Google Scholar 

  39. Udoh E. J. and Etim A. N., (2009) Measurement of Farm level Efficiency of Broiler Production in Uyo, Akwa Ibom State, Nigeria. World Journal of Agricultural Sciences, 5, 832–835

    Google Scholar 

  40. USDA, United States Department of Agriculture, (2008): Ghana Poultry Report Annual, Global Agricultural Information Network Reports. No. 8006

  41. USDA, United States Department of Agriculture, (2011): Ghana Poultry Report Annual, Global Agricultural Information Network Reports. No. 8007

  42. USDA, United States Department of Agriculture, (2012): Brazil Poultry and Products Annual.  Global Agricultural Information Network Reports. No.0816

  43. USDA, United States Department of Agriculture, (2013): Ghana Poultry Report Annual, Global Agricultural Information Network Reports, No. 1304.

  44. USDA, United States Department of Agriculture. (2017). Ghana poultry report annual, global agricultural information network reports.

Download references


This study received financial support from the National Natural Science Foundation of China (71603126, 71403125) and National Natural Science Foundation of China: International Cooperation (71911530164).

Author information



Corresponding author

Correspondence to Jing Lan.

Ethics declarations

Conflict of interest

The authors declare that they have no conflict of interest.

Additional information

Publisher’s note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Rights and permissions

Reprints and Permissions

About this article

Verify currency and authenticity via CrossMark

Cite this article

Etuah, S., Ohene-Yankyera, K., Liu, Z. et al. Determinants of cost inefficiency in poultry production: evidence from small-scale broiler farms in the Ashanti Region of Ghana. Trop Anim Health Prod 52, 1149–1159 (2020).

Download citation


  • Cost inefficiency
  • Small-scale broiler production
  • Poultry
  • Cost management
  • Stochastic frontier