An analysis of economic efficiency among indigenous chicken farms in Kitui county, Kenya

Abstract

Chicken production is one of the popular poultry activities worldwide. Chicken constitute the greatest percentage of livestock species reared in rural areas. In Kenya, the poultry sector contributes 30% of the agricultural contribution to Gross Domestic Product (GDP). Despite enhancement programmes such as crossbreeding and the introduction of indigenous chicken-specific foods, indigenous chicken production has remained low with some farmers making minimal profits and huge losses. The influence of social and economic factors on production efficiency or inefficiency has not been empirically established. The main purpose of this study was to analyze the economic efficiency among indigenous chicken farmers in Kitui County. The specific objectives were to: Identify major resources used by farmers in indigenous chicken production, estimate the production function and determine which of the identified resources significantly influenced chicken production in the study area; Determine the farmers level of efficiency in utilizing the identified resources; Com00000pare the relative economic efficiency between small and large scale indigenous chicken farms in Kitui county; Identify the major factors limiting indigenous chicken production, farm profit and propose solutions for the identified challenges . The study was conducted in Kitui County, Kenya. A descriptive survey design was adopted. Primary data was elicited using a structured questionnaire administered on 120 indigenous chicken farmers from selected wards of Kitui County. A stochastic production function was used to estimate the effect of production cost on the level of indigenous chicken production. To assess resource use efficiency among indigenous chicken farmers in the study area, the study used a CobbDouglas production function. Statistical package for social sciences version 28 and Frontier 4.1 software were used in data analysis. The results of the study revealed that the main resources used by the indigenous chicken farmers were: poultry house, feeds, feeding traps, water traps, veterinary services and hired labour. The cost of efficiency levels of the sampled indigenous chicken farms ranged from 0.1067 to 0.3498 with a mean of 0.70798. Farmers’ education level, experience in indigenous chicken production, farm size and technical advice from veterinary experts were identified as factors that influenced levels of observed cost efficiencies among indigenous chicken farmers in the study area. The production function analysis identified labour, poultry feed and poultry housing as the resources with greatest influence on poultry production. Their coefficients were 0.775, 0.619 and 0.571 respectively. Resource use efficiency for large scale farmers revealed that cost of birds and poultry equipment were underutilized and, therefore, required a cost increase of 72% and 21.5% respectively for optimum production. Small scale farmers were found to underutilize vaccines, drugs, chemicals, amount of feed and cost of equipment necessitating a cost increase of 80.85%, 10%, 65.17% and 52.9 % for optimum allocation. Price analysis indicated that the average price per bird was Ksh.500. Farmers with less than 50 birds reported to have attracted better prices at an average price of Kshs. 530 per bird. The profit function analysis showed that on average farmers realized a profit of Kshs. 147 per bird. However, the results indicate that farmers keeping more than 100 birds realized a profit of Kshs 175, higher than farmers keeping birds less than 50 who earned a profit of Kshs. 130 per bird. Lack of proper chicken housing, conflict with neighbors, poor chicken husbandry skills, low chicken returns, and theft were all factors that influenced indigenous chicken farming. Newcastle disease (NCD) was identified as the most common disease condition affecting indigenous chicken production. Empirical results of the study pointed out that despite some levels of cost inefficiency identified, the indigenous chicken farmers in the study area have the potential of increasing the scale of production and become more profitable. The study recommended that as a matter of policy, extension services should be increased and farmers educated on importance of cooperative societies. Farmers should be encouraged to embrace the improved breeds to maximize on profit. Subsidizing feeds and other production inputs was also pointed out as a step towards expansion of the poultry sector.