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

Abstract

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.

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Notes

  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.

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Funding

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).

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Correspondence to Jing Lan.

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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). https://doi.org/10.1007/s11250-019-02115-6

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Keywords

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