An Analysis of the Production Efficiency of Broiler Firms in Ibadan Area of Oyo State, Nigeria

Abstract

The study applied theneodassicaltl~eoryinvolvingstocl~asticfrontierproductiaonnd cost functions
to Lx-oilerproductioi~n~ O yo State Nigeria. TeclznicaL allocative an<dec onomic efficiencym easures
were derived for sampled broiler firms. This was based on Kopp and Die wert's cost decomposition
approach for estimating FarrelYs effiiency measures. The data came from a sample survey of the
area of study A multistage random sampling procedure was employed in selecting the sample
needed for the analysis. Evidence from the analysis suggested that the broiler firms attained only
ahou t 80.3 percent technical efficiency The a Ilocative efficiency is a bout 74.9 percent while the
econolnic eficiencys tood at 60.3percenf.B ased on these results, by operating at tl7e efficientf rontier;
the sampled ikoilerproduction firms would be able to reduce their costs by 39.7percent ky operating
i~t tc~chnicaal nd aJloca tive effiiency le vels. This resource sa vings has important inzplica tion for
L?oti~p olicy formulati011a nd fim management. Tlle result obtained iznpJies that the a verage firm is
potentially capable of i17creasingproduction without increasing its use of inputs. There is the need
tbr the fims to in~proveon tlleir maz~age~nentpracticeTsh. is is because it embraces both technical
and allocative efficiencies. As ince17tives for producers, input provikion at reduced prices are
~-t~co~nn~enecs?pecdi allyf or imported ones. hnpro vement i17 17atcl~eryfaciJitieasn & introduction of
I,?h our sa ving tecl~~~ologaire sa lso reconunended