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Go Back       IAR Journal of Agriculture Research and Life Sciences | IAR J Agri Res Life Sci, 2020; | Volume:1 Issue:5 ( Oct. 21, 2020 ) : 152-156
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DOI : 10.47310/iarjals.2020.v01i05.007       Download PDF       HTML       XML

Analysis of Costs and Returns in Broiler Production in Jalingo Local Government Area of Taraba State, Nigeria


Article History

Received: 11.09. 2020; Accepted: 05. 10 .2020; Revision: 08. 10. 2020; Published: 15. 10. 2020


Author Details

Aboki, E1, Garba, E.J2, Emmanuel, G1 & Shehu, A3


Authors Affiliations

1Department of Agricultural Economics & Extension, Taraba State University, Jalingo, Nigeria

2Department of Agricultural Economics & Extension, Federal University, Wukari, Taraba State, Nigeria

3Gassol Local Government Secretary, Mutum Biyu, Taraba State, Nigeria


Abstract: This study was conducted in order to determine profitability in broiler production in Jalingo Local Government Area of Taraba State. A multi stage and purposive sample techniques were employed for the selection of the study area and respondents. Data for this study were collected with the aids of structured questionnaire. About 80 broiler farmers were randomly selected to form the sample size for the study. The analytical techniques used for the study were frequency, percentage, budgeting techniques and Regression analysis. The result showed that the total revenue generated is N126,000.00, while the total cost incurred in broiler production is N 49,900. The net farm income and rate of return on investment is N 76,100 and 66k respectively. The result shows that broiler enterprise is a profitable venture because in every naira invested it attract sixty - six kobo as a gain. The regression analysis result shows that R2 value obtained is 0.74 implying that about, 74% of the variation in the output of broiler was explained by the independent variables while 26% could not be explained due to external factors. The coefficient of number of bird, farming experience and age of the respondents were positive and statistically significant at 5% implying that increase in the level of this variables lead to increase in broiler output. High cost of feeds and lack of improved technology were among constraints hampering broiler production. It is recommended that government and private sectors should provide feeds to broiler farmers at a subsidize rate.


Keywords: Analysis, broiler, cost and return and production.

INTRODUCTION

Agriculture provides primary means of employment and account for more than one third of the total Gross Domestic Product (GDP) and labor force in Nigeria (Memon et al., 2015). Similarly, IFAD (2007) reported that livestock sector is a major contributor to agricultural production accounting for 40% of the global output, employing approximately 1.3 billion people and supporting the livelihoods of almost 1 billion poor people living below one dollar per day. The Nigerian agricultural sector is responsible for 80% of animal production in the country (Ja’afaru and Gabdo, 2010). Poultry is the fastest growing component of global meat production with developing and transitional countries assuming a leading role (Benjamin 2013).


According to FAO (2010) poultry comes fourth among sources of animal protein for human consumption in Nigeria and contributes about 27% of the national meat production. Poultry is an effective means of transferring wealth from the high income urban consumers to the poor rural members of the community (Illebrew and plotnick, 2013).


Poultry farming is important in providing additional income to our farming community and educated unemployed persons of the rural areas through creating self-employment opportunities (Dunya 2015, and Kwaghe et al., 2009l). It is important because its contribution to the Gross Domestic Product (GDP) a major source of protein in the country (Aboki, et al., 2013). He further observed that poultry provide additional income- to resource poor small farmers especially women. Nmadu et al., (2014) found that 85% of rural families keep small ruminant and local fowls primarily as an investment and sources of manure and meat at home or use during festival. It’s important therefore cannot be over emphasized as it has become popular industry for the small scale holder that have greater contribution to the economy of the country (Aboki, et al., 2013).

The most important factor limiting the expansion of poultry industry in tropical countries like Nigeria and Ghana is shortage and high cost of feed ingredient (Benjamin 2013). He further identified high cost of feed as the major problems affecting poultry production in Nigeria. Bamiro, et al., (2001) found that feed was the major factor militating against the poultry industry and had hampered production not only on the basis of high cost but also due to low quality feed supplied by the feed millers which have a negative impact on productivity.


This study was carried out in Jalingo, Taraba State, where the level of poultry production is still low and the cost of production high. Several studies had been carried out in different aspect of poultry but not on cost and return in broilers production. The main objective of the study is to analyze the cost and returns in poultry production in Jalingo Local Government Area of Taraba State while the specific objectives are to:

  • Evaluate costs and returns associated with poultry production

  • Determine the factors influencing poultry production

  • Identify the major constraints of poultry production in the study area.


METHODOLOGY

The Study Area

The study was carried out in Jalingo Local Government Area of Taraba State, Nigeria. The study area lies between latitude 6o30 and 10 o 36’N of the equator and longitudes 9o10’ and 11o 50 E of the Greenwich meridian (Taraba State Government Diary (TRSG), 2016).


Jalingo local government area covers an area of 191km2e with a population of 187,500 (NPC,2006). Jalingo local government area has a projected population of 276,800 as at 2018. Jalingo local government area is bounded to the North by Lau ad Yorro Local government areas, and to the south by Ardo Kola local government area.


The study area has a tropical climate marked by dry and rainy seasons. The rainy season starts in April and ends in October. The wettest months are August and September. The dry season starts in October and ends in April. The mean annual rainfall is 800mm while the mean minimum and maximum daily temperature recorded is 14.8ºC and 34.4º C respectively (TADP 2004). The vegetation of the study area is Guinea Savannah type. Majority of the inhabitant depends on subsistence farming which poultry production belong.


DATA COLLECTION

Data for this study was obtained from primary source. The primary data was collected using structured questionnaire and interview schedule. Data were collected on prices of day old chicks, finished table broilers, cost of feed and cost of labour, medication and production equipment.


Sampling procedure and sample size

The sampling frame consisted of all poultry farmers in the study area. A multi-stage sampling procedure was used for the selection of the respondents. The first stage involved purposive selection of five wards out of the ten wards in the study area based on their relevance in poultry production.


In the second stage, three farming communities were randomly selected from each of the five wards selected to cover fifteen farming communities in the study area. In the third stage, 80 farmers were randomly selected in proportion to the population of the poultry farmers in each of the fifteen farming communities selected using Yero Yamen formula at 5% level of significance.


DATA ANALYSIS

Farm budgeting techniques and multiple regressions were used to address object (i) and (ii) respectively. While frequency and percentages was used to address objective iii.


Farm Budget Techniques

This is defined as the difference between gross income and total variable cost (Mshelia et al., 2005). The budgeting techniques were used to evaluate the profitability of broiler production in the study area. The equations are expressed as follow:


GM =GR-TVC………………… (1)

Where GM = Gross margin (in N)


GR =Gross Revenue (in N)

TVC = Total variable cost (in N)


GR which is also called total value of production is the physical product multiply by unit price of the product.


Net Farm Income (NFI) analysis

The net farm income is expressed as follows:

NFI = TR-TC ………………………… (2)

Where NFI = Net Farm Income (in N) TR = Total Revenue (in N)

TC = Total cost (in N)


Multiple Regression Analysis

This technique was used to determine the input-output relationship in poultry production in the study area. Four functional forms were used: linear, exponential, semi log and Cobb-Douglas functions. The generate equations is shown as follows: -

Y=F (X1 X2 X3 X4 X5 X6 + Xu……………… (3)

Where:

Y=Total output measured (in Kg)

X1 =No of birds’ stock

X2 = farming experience (in years)

X3 =Cost of feed (in N)

X4 =Cost of labor (in N)

X5 =Cost of veterinary service (in N)

X6 =Age of the respondents (years)

Xu=Error term

RESULTS AND DISCUSSIONS

Cost and Returns of Poultry

This section gives the summary of the cost and returns of the broiler producer and consequently the gross margin and the net farm income.

The result on Table 1 revealed the total cost incurred in broilers production in the study area to be N 49,900 while the total revenue generated is N 126,000. The gross margin was N 104,100 while the net farm income is N 76,100. The farmers average rate of return is N 0.66 implying that for every one naira spent by broiler farmer in the study area attract a gain of sixty-six (66) kobo. This implies that the business of broiler production in the study area is a profitable venture. This finding is in tandem with the result of Benjamin, (2013) who reported that broiler production is a profitable enterprise. The implication of this result is that farmers who want to venture into broiler production can easily do that without any doubt since the business is a lucrative one.

Table1: Net Farm Income Statement for Broiler Production

Item

Unit Produced (kg)

Price Unit (N)

Total (N)

A.Output (Broiler)

50.4

2,500

126,000.00

B. Variable Cost;




Feed

237.5kg

80

19,000

Labour

56 man hours

59.5

3,000.00

Veterinary Service



4,000.00

Transport



900.00

Total Variable Cost (TVC)



26,900.00





C. Fixed Cost


Feeding trough



3,000.00

Watering trough



2,000.00

Battery cage



18,000.00

Total Fixed Cost (TFC)



23,000.00



D. Total Cost (B+C)



49,900.00

E. Gross Margin GM (A-B)



104,100

F. Net Farm income = NFI=A-(B+C)




ARR=Average rate of return



76,100.00

ARR= TC/NFI



0.66



Source: Field Survey 2019

Estimated coefficient of Broiler Production

Result on Table 2 examined the extent to which the independent variable (number of birds, farming experience, cost of Feed, cost of labour, cost of veterinary service and the age pf the respondents explain the variability of the dependent variable (output). The result of the regression analysis for the broiler shows that the Cobb Douglas equation fit well based on the number of significant variable and its coefficient of multiple determination for the unit.


The other production functions tried were rejected based on the fact that the double-log function has the highest R2 value and the highest number of significant variables. From Table 2, three variable X1, X2 and X6 were all significant at 5% level of significance. The adjusted coefficient of multiple determination_R2 indicates the percentage of variations in the observed dependent value that is explained by the fitted regression equation.


The R2 value obtained is 0.74 which is an indication that the independent variable X1, X2 and X6 explained on the average, 74 percentage of the variation in the output of broiler. The unexplained variation in broiler output is obviously due to other inputs not specified in the model.


The F-ratio presented in table 2 measures the joint significant of all the explanatory variables in the model. The value obtained is 76.6, which is significant at 5% level. The elasticity of production with respect to the X1, X2 and X6 are 0.947018, 0.823693 and 0.374327 respectively. These values were statistically significant at 5% level implying that a 5% increase in X1, X2 and X6 will lead to increase in the amount of broiler production all things being equal. This finding is in agreement with findings of Memo et al., (2015) who reported that number of stocks and farming experience significantly increase the level of layers’ production at 5% level of significance. This implies that with increase in the number of birds and good feed management there will be increase in the output of broiler.

Table2: Estimated coefficient of broiler production

Variable

Coefficient

Standard error

T- value

X1

0.947018

0.335967

2.818784**

X2

0.823693

0.297854

2.765424**

X3

1.149101

0.793836

1.447537

X4

0.152491

0.120993

1.260329

X5

0.341534

0.469202

0.727903

X6

0.374327

0.177158

2.112958**

C

1.434928

0.591574

2.425611*

R2

0.743216



Source: Field survey 2019

** sig.at 5%,

Constraints Faced by broilers farmers

The constraints faced by broilers farmers in the study area is presented in sequential order in Table3. The result revealed that high cost of feed was the major (98.75) constraint militating against broilers production in the study area. This finding is in consonance with the study of Benjamin (2013) who also found in his study conducted that high cost of feed is one of the major problems affecting poultry production. Lack of improved technology, insufficient broilers output, lack of formal education, high cost veterinary services and high cost of labour were among the major constraint faced by broiler farmers in the study area. The result of this work is also in tandem with the finding of Ja afaru and Gabdo (2010) who reported that lack of improved technology and high cost of veterinary services affect poultry production. Based on the findings, the poultry production in the study area will yield positive results if these problems are adequately tackled.

Table3: Major Problems Faced By the Respondents

Problems

Frequency (F)

Percentage (%)

High cost of feed

79

98.75

Lack of improved technology

78

97.5

Insufficient boiler output

72

90

Lack of formal education

70

87.5

High cost of Vet. Service

60

75

High cost of labour

57

71

Inadequate marketing

49

61

Disease

47

59

Inadequate experience

39

49

Source: Field survey, 2019

Multiple responses

CONCLUSION AND RECOMMENDATION

Based on the findings of the study, it was concluded that the largest proportion of poultry producers in the study area operated on a medium-size and that poultry production was found to be a profitable ventures across, scale of operation.


In line with the findings of the study, the following recommendations were made.

  • The government and private sector should provide feed to poultry farmers at a subsidized rate as that will encourage more farmers to venture into the business.

  • Improved technology should be provided by both government and private enterprise to boost poultry production in the study area.

  • Poultry farmers in the study area should be encouraged to afford formal education as that would will boost the level of understanding which in turn will affect the business positively.

  • Veterinary service should be provided to the farmers at affordable rate.

REFERENCE

  1. Aboki, E., Jongur, A.A.U., & Onu, J.T. (2013). “Productivity and Technical Efficiency of family poultry in Taraba State. Nigeria” Journal of agricultural and Sustainability-1(1), 12-66.

  2. Bamiro, O. M., Shitu, A.M., & Kola Olutokun, A.S. (2001). ”Private feed production as a cost reduction strategy: effect on productivity and profitability of poultry business in Ogun State. The Ogun journal of Agricultural Science 1, 37-51.

  3. Benjamin, A., Cosmos, Y., & Anthony, A.A. (2013). Profitability of Broilers Layers production in the brogAhafo Region of Ghana” APN Journal of Agricultural and Biology science 2(4) 422430.

  4. Dunya, A.M., Mamza, A.O., & Yusuf, S.Z. (2015) Local Chicken management in Rural BornoState. Nigeria. Journal of Biology Agricultural and Healthcare 5(4). 20-26

  5. F.A.O. (2010). chicken genetic Resource used in small holder poultry production system and opportunities for their development No.5.FAO Rome Available at www.fao.org.org/dereplo/013/al675elpdf.

  6. IFAD. (2007). Women livestock managers in the third world: a focus on Technical Efficiency of Poultry Production Retrieved from http//www.ifad.org/gender/thematic/Livestock/liivetochtm.

  7. Illebrew, K., & Plotnick, R. (2013). ” Poultry Marketing in West Africa; Ghana EPAR print No.83 prepared the market access team of the Bill and Melinda Gates foundation May 28, 2010 retrieved December 2012 

  8. Ja’afaru, M.R., & Gabdo, B.H. (2010) “Identifying major factors of poultry Production as sustainable Enterprises among farmer using improved using Methods Rived Nigeria” International Journal of Poultry Science 9(5), 459-463.

  9. Kwaghe, P. V., & Amaza, P. S. (2009). The relationship between social factors and the poverty experienced by farming households in Borno state, Nigeria. Global Journal of Agricultural Sciences8(2). 118-120.

  10. Memon, I.N., Noonari, S., ASFM., Shah, S.T., & Peerzado, M.B. (2015). “Economic Analysis of Poultry Egg production in Quelta District, Journal of fisheries and livestock production 30, 137-140

  11. Mshelia, S.I., Iheanacho, A.C., & Hiyasu, A. (2005). “Economics Analysis of Paddy Rice Processing in Adamawa State, Nigeria” Journal of Agriculture and Environment I PP19-23.

  12. National Population Commission. (2006). Population and Housing Census, Enumerators Manual, Federal Republic of Nigeria, National Population Commission, Nigeria, Pp 1-16

  13. Nmadu, J.N., Ogidan, 1.O., & Omolelun, R.A. (2014). “Profitability and Resources use Efficiency of poultry Egg production in Abuja Nigeria Journal of Social Sciences 33,134-146.

  14. Taraba Agricultural Development Programme (TADP), Crop Production recommendations for Taraba State. Taraba press Ltd, Nigeria, pp 31-39

  15. Taraba State Government. (2016). Taraba State Official Diary, pp 23-28.


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