1.

0 INTRODUCTION

1.1 Background to the study

One of the major challenges facing most developing countries is the satisfaction of the

ever-increasing demand for calories and protein. Most African diets (Nigeria inclusive) are

deficient in animal protein which results in poor and stunted growth as well as increase in

spread of diseases and consequently death (Yusuf and Malomo, 2011). Animal protein sources

include fish, egg, poultry meat, beef, milk, beacon, pork and mutton. They are delicious but not

readily affordable. The common sources accessible to Nigeria populace are frozen fish, beef

and poultry products [egg and meat]. Most farmers produce poultry (broiler production)

especially in Benue state Nigeria, however, the level of the productivity still remain local and

small- scale.

In Benue State, Nigeria., the protein sources are mainly fish, egg, poultry meat, beef,

milk, and pork. However, other sources of protein are plants especially (legumes) and

animal from the wild. Animals from the wild are not easily accessible to the populace,

although a few domestic animals like rabbit, sheep, birds are kept, but these cannot meet up

the protein requirements of the body. Inadequate protein intake by most Nigerian is a

recognized problem (Ngozi and Nzeadachie, 2013).

Poultry (broiler production) is a sub-sector in the livestock industry constituting a major

component of the agricultural economy. The sector provides animal protein to the populace as

well as employment for a considerable percentage of the population. According to FAO Report

(2010) poultry comes fourth among sources of animal proteins for human consumption in

Nigeria and contributes about 10% of the national meat production. Poultry business is

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attractive because birds are able to adapt easily, have - high economic value - rapid

regeneration time and - a high rate of productivity that can result in the production of meat

within eight weeks and first egg within eighteen weeks of the first chick being hatched.

The average Nigerian diet contains about 7gm/ day of animal protein as against the

recommended intake of 28gm/ day for normal health. But steadily from the 1950’s until

1986 when as a result of introduction of structural adjustment program, it began to

experience the crisis which persisted until today. The importance of animal protein apart

from its palatability is undisputed, animal protein provides man with high quality food

nutrients for growth and tissue replacement. It determines the level of nutrition of the

population and the health of the work forces, which in turn determines the development

of a nation and its economy (Ayo, 2011).

The Nigerian government in an attempt to alleviate this problem has always

resorted to mass importation of meat. The Obasanjo administration has put more

effort towards self-sustainability in poultry production by placing ban on the importation of

frozen chicken. The problem which solution is sought is that of harmonizing or balancing the

shortage in supply caused by the ban on importation of frozen chicken. This can only be

achieved by increasing poultry production. Also, many Nigerian livestock farmers in their own

effort have preferred to invest in the poultry farming making it easy for the transformation

of the previous back yard and less efficient system of poultry keeping to a more scientific

system, despite their poor capital base (Nwata et al., 2010).

Broiler production is one of the profitable agro-industries which can effectively tackle

the problems of unemployment and underemployment in the rural areas, particularly of small

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and marginal farmers. Broiler production can be adopted under a wide range of climatic

conditions and can generally be combined conveniently with other farm enterprises. The land

and capital requirements for this enterprise being not large, it ensures a regular flow of income

through the marketing of poultry products. In spite of a spectacular growth in the poultry sector

during the past two decades, a huge gap exists between availability and requirement of poultry

products. Therefore, to meet the domestic requirement, there is a need of about six- time

increase in meat production. Increase in population growth, changing life-style, shifting of food

habits, rapid urbanization, increased per capita income, awareness about health care are

contributing factors towards rising demand of poultry products Ayo (2011).

1.2 Statement of Problem

The importance of poultry production for protein cannot be over-emphasized. Healthy

labour force is as a result of adequate protein intake. In a recent survey of the nutrient

content of broiler meat to other farm animals, it was discovered that broilers (chicken) has the

highest protein content of 21-50 percent to rabbit and beef, which contain 20-22 percent and

18 percent protein respectively ( Ojo, 2015).

According to the world health organization standard, (2012), Nigeria like most other

developing countries is faced with inadequate supply of animal protein. Agricultural policy

in Nigeria has emphasized increase agricultural production through a range of policies and

strategies to obtain self- sufficiency in food production without achieving these aims

(Federal government of Nigeria, 2010). Over the years, Nigeria government and individuals

have tried to design policies that will encourage increased broiler production. These were due

to the profitability of the business. The aim to meet the growing need of protein
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(balanced) diet) for a healthy work force and demand for a teeming population to be self-

sufficient. Today, the decline in the growth of poultry industry has continued unabated

(Garba, 2014).

A number of related studies have been carried out on broiler production in Nigeria. For

instance, Jimmy, (2016) worked on comparative analysis of technical efficiencies of broiler

production enterprises in Bayelsa State, Nigeria. Emokpae et al (2018) carried out technical

efficiency and production elasticity of broiler producers in Edo State, Nigeria. Hassan et al

(2011) carried out a study on economic analysis of broiler production on on-farm formulated

and commercial feeds in Kaduna State, Nigeria. Omolayo et al (2018) carried out study on

analysis of broiler production in Lagos State, Nigeria. However, to the best of the researcher’s

knowledge there is little or no work on economic analysis of broiler production among small

scale farmers in Otukpo local government area of Benue State, Nigeria. This is the gap the

researcher is intending to fill.

1.3 Research Questions

The following research questions were raised to guide the study.

i what are the socio-economic characteristics of broiler farmers in the study area.

ii what are the costs and return associated with broiler production in the area?

iii what are the socio-economic factors that influence broiler production in the study area.

iv what are the constraints to broiler production in the study area.

1.4 Objectives of the Study

The broad objective of the study was to analysis economics of broiler production among

small scale farmers in Otukpo Local Government Area of Benue State, Nigeria.
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The specific objectives were to;

i describe the socio-economic characteristics of broiler farmers in the study area.

ii determine the costs and return in broiler production in the study area

iii determine the socio-economic factors that influence broiler production in the study area

iv identify the constraints to broiler production in the study area

1.5 Research Hypotheses

Based on the specific objectives of the study, the following hypotheses were formulated and

tested.

H0: Socio-economic characteristics of broiler farmers do not have significant

effect on broiler production in the study area.

H1: Broiler production is not profitable in the study area.

1.6 Significance of the study

The study is of paramount importance to broiler farmers, policy maker, Government and other

researchers in general, as it seeks to help broiler farmers in providing information that will

assist them on how best to attain efficiency in broiler production and provide them with

detailed analysis of costs and returns in broiler businesses.

The result of this work will be of immense benefit to both individual and groups in the private

and public sector of economy. More importantly, the study will provide information on factors

that influence the level of profitability of broiler production which will enhance agricultural

productivity and efficiency. The study will also identify constraints militating against broiler

production with a view to making useful recommendations towards enhancing productivity and

profitability of broiler farmers in the study area.

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The study will also enable policy makers to identify constraints and potential areas for

its improvement, considering the need to enhance protein intake. It will equally

contribute to the general body of knowledge in the study area and will serve as source of

literature and reference to other researchers for further studies. Finally, the study will serve as

a useful material for future researchers in the study area.

1.7 Scope of the study

The study was focused on the economic analysis of broiler production among small

scale farmers in Otukpo Local Government Area of Benue, Nigeria. Precisely, the

study discussed the socio-economic characteristics of poultry farmers, costs and

returns of poultry farmers, factors that affect broiler production and constraints to broiler

production. Geographically, the study was limited to small scale farmers involved in broiler

production in Otukpo Local Government Area of Benue State, Nigeria.

1.8 Definition of Terms

Economic: is the social science that studies the production, distribution, and consumption of

goods and services. Economics focuses on the behavior and interactions of economic agents

and how economies work.

Analysis: is the process of breaking a complex topic or substance into smaller parts in order to

gain a better understanding of it. The technique has been applied in the study of mathematics

and logic.

Poultry: are domesticated birds kept by humans for their eggs, their meat or their feathers.

These birds are most typically members of the super order Galloanserae, especially the order

Galliformes

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Production: is a process of combining various material inputs and immaterial inputs in order

to make something for consumption. It is the act of creating an output, a good or service which

has value and contributes to the utility of individuals

Broiler: is any chicken that is bred and raised specifically for meat production. Most

commercial broilers reach slaughter weight between four and seven weeks of age, although

slower growing breeds reach slaughter weight at approximately 14 weeks of age. Typical

broilers have white feathers and yellowish skin

Farming: is the activity or business of growing crops and raising livestock

Feed: an act of giving food, especially to animals or a baby, or of having food given to one

Constraint: is something that limits or controls what you can do.

Determine: determine is to settle or decide by choice of alternative or possibilities.

Identify: identify is to determine the taxonomic position of (a biological specimen).

Cost: an amount that has to be paid in order to get something.

Returns: the annual return on investment expressed as a percentage of the total amount

invested also called rate of returns.

Small Scale Farmer: individual that produces crop and livestock on a small piece of land.

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 2.0 LITERATURE REVIEW

Literature for this study was reviewed under the following sub headings based on the

specific objectives of the study.

2.1 Theoretical Framework

2.1.1 Production theory

The theory of this study is based on the theory of production.

According to Jhingan (2012) the production theory expresses a functional relationship between

quantity of input and output. It shows how extent output changes with input during a specific

period of time. Production economics according to (Baumlo, 2011) is concerned with

optimization of resources and it means efficiency. Production is concerned with the relative

performance of the process used in transforming input into output. The analysis of efficiency is

generally associated with the possibility of farmers producing a certain optimal level of output

from a given body of resources at "least cost". Farrell (2010) distinguishes between types of

efficiency: (a) technical efficiency (TE), (b) allocative or price efficiency (AE) and (c)

economic efficiency (EE). Technical efficiency and allocative or price efficiency are two

important concepts relating to production theory. Technical efficiency refers to the ability of

producer to obtain certain level of output. While allocative efficiency is the ability to choose

the level of inputs that maximize profit and give factor cost.

2.1.2 Concept of profitability

Profit generally is the making of gain in business activity for the benefit of the owners of the

business. Pure economic profit is the increase in wealth that an investor has from making

investment, taking into consideration all costs associated with the investment including the

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opportunity cost of capital (Okafor, 2010). Profitability is an important concept because it

relates to the financial feasibility of expansion, or indeed starting up of an enterprise and

contains information on the efficiency of the technical and managerial process. Profitability

in common usage means the ability to earn profit. The profitability of any enterprise is

measured in relation to the size of the business and managerial skills. It is affected thus, by

both revenue and cost. Different forms of business produce goods and services for sale in

other to earn income. If the income earned does not exceed cost of production in turn, the

firm cannot stay in business for a long time therefore the aim of any enterprise is to minimize

cost and maximize output in other to maximize net revenue.

2.1.3 Profitability of broiler production enterprises

Mahama, et al., (2013) analyzed profitability using break even analysis in Accra – Tema and

Kumasi areas of Ghana for 20 selected poultry farms. The study revealed that 38.5 percent of

the farms in Accra–Tema area were producing below their break- even levels. Only 30 percent

of the farms registered positive net present value. Under an interest rate scenario of 25 percent,

about 70 percent of all farms would break- even. The results suggested that lower interest rate

was essential for more farms to break even (be competitive) and stay in the poultry business.

Ike and Ugwumba (2011) investigated the profitability of small scale broiler production in

Onitsha North Local Government Area of Anambra State, Nigeria using enterprise budgeting

and break even analysis. They reported the gross margin on variable cost ratio of 0.46 and a

return to capital of 0.41, the result also showed that a large margin of safety was exhibited (that

is the amount of output by which the scale of operation exceeds the break- even point). For a

scale of operation of 500 birds, a margin of safety of 0.05 or 5% and the break even quantity of

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475 (broiler) were calculated. The results generally showed that broiler production enterprise

was highly profitable and economically viable. The overwhelming use of self-financing in

poultry production reflects the underlying capital shortage and a corresponding need for

improved access to credit through the formal financial system.

Mohama et al., (2013) examined profitability of broiler production, using the break

even concept. Farms located in Kumasi area broke even in the production of broiler with about

42.9 percent producing above 60 percent of their installed capacity, while about 38.5 percent of

the farms in Accra- Tema area produced below their break- even levels. About 38.5 percent of

the farms in Accra-Tema area produced above 60 percent of their installed capacity. Only 30

percent of the farms, including 42.9 percent and 23.1 percent of farms located in Kumasi and

Accra Tema, respectively, registered positive net present value. The implication is that a farm

located in Kumasi is more likely to record positive profit than one located in Accra-Tema area.

Under an interest rate scenario of 25 percent about 70 percent of all farms, including 76.9

percent in Accra Tema area and 57.1 percent in Kumasi area would be profitable (break-even).

The results suggest that lower interest rate is essential for more farms to break even (be

competitive) and stay in the poultry business. Varinda, Sharma and Kingra (2010) examined

the cost and return of different sizes of broiler farms in the Punjab State; this was carried out

based on primary data collected from 140 broiler farmers for the period March 2008 to

February 2009 in three districts, viz. Ludhiana, Hoshiarpur and Muktsar. The study showed

that the total fixed investment per bird was highest on small farms, followed by medium and

large farms. The total variable cost per bird was reported highest on small farms, followed by

medium and large farms. The total cost of meat production per bird was found highest on small

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broiler farms, followed by medium and large farms. The net return per bird over the variable

costs was recorded highest on large farms and economies of scale prevail on these farms. The

meat-feed price ratio and benefit-cost ratio was found to increase with increase in farm-size of

broiler farms, which indicates better utilization of inputs on large farms. On the basis of net

present value, benefit-cost ratio and internal rate of return, investment in broiler farming has

been found profitable in all farm-sizes and most profitable on large farms, followed by medium

and small farms. The small broiler farms have been observed to be highly sensitive to increase

in costs and decrease in net returns. The study observed that broiler farming is a profitable

venture and has a bright future in Punjab agriculture for improving economic status of the

farming communities.

2.2 Socio-Economic Characteristics of Broiler Farmers

Knowledge of the nature of farmers is imperative for easy comprehension. It also plays an

important role in creating awareness and knowledge as they influence decision and level of use

of farm resources and technology (Mohammed, Malumfashi & Musa, 2005). Akerele et al

(2014) analyzed the socio-economic characteristics of poultry farmers, they reported that

majority (62.5%) of the poultry farmers were aged between 31 and 50 years. The mean age of

the farmers was approximately 41 years. This implies that farmers were in their active and

productive age. The report further stated that majority (86.3%) of the respondents were

married. They further asserted that majority (76.2%) of the farmers have between one and five

household members with a mean household size of 4 persons. Also majority (63.8%) had

tertiary education. The majority (78.7%) of the farmers had 10 years or less experience in

poultry farming with the mean experience of 8 years.

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 Aromoralan et al (2013) analyzed the socio-economic characteristics of small-scale

poultry farmers in Oyo State, Nigeria. Their report indicated that most (62.5%) of the

respondents were between the ages of 21-40 years while 15.8% were between the ages of 41-

60. This implies that small scale poultry (broiler) farming is common among younger farmers

unlike those who are above 60 years which represent 1.7% of the respondents in the study. The

age range from 21 to 40 years indicates that majority of the respondents were within the

economically active age and this is in line with Yinusa (2012) who observed that this age

bracket contains the innovative, motivated and adaptable individuals. Majority of the

respondents were married (63.3%) while 29.2% and 7.5% were single and widowed

respectively. Most (77.5%) of the respondents had higher education which could probably have

encouraged them to choose poultry farming not regarding the technicality involved in it

although at a small-scale. Majority (63.3%) of the respondents had more than two people in

their household.

2.3 Constraints to Broiler Production

Despite the acknowledged importance of poultry production, Akanni (2011) opined that it is

characterized by low production level due to limited finance for the procurement of basic

poultry equipment and materials. The result of this is that many of the small-scale poultry

farmers are not encouraged to increase their productivity. The problems militating against the

poultry industry in Nigeria include among others, scarcity of bank loans and high interest rates,

high cost of poultry equipment, high cost of feed ingredients and sudden outbreak of diseases.

Disease outbreak is perhaps the major problem affecting the poultry industry at the moment.

For example, the highly pathogenic avian influenza, which began in South East Asia in mid -
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2003, and has affected more than 20 countries worldwide, has a mortality rate that can

approach 100% within hours (Abiola, 2007).

Tijjani, et al., (2012), used percentages to capture the constraints to egg production in

Borno State, Nigeria. The study reported that high cost of feeds such as grower, finisher, and

layer mash were the most pronounced problems associated with poultry production. The study

also revealed that administration of inadequate drugs was the second major problem as

indicated by 20% of the poultry farmers. They opined that it might be due to inadequate drugs

for poultry production that has made most of the farmers to be small-scale farmers who operate

at subsistence level. Inadequate drugs might have caused mortality in the birds, which has in no

doubt led to small scale production.

The result also showed that lack of government support (14%) and poor management practices

(12%) were other problems faced by poultry farmers. Poor management practices can lead to

low egg production and mortality among birds in the house. High mortality rate, bird density

and inadequate ventilation were problems also indicated by 10, 8 and 6%, respectively of the

respondents.

Amorolaran, et al., (2013) studied the challenges of small poultry farms in layers production in

Oyo State, Nigeria. They reported that the major constraint faced by the respondents was

disease and pest attack (76.7%) followed by difficulty in credit and loan procurement processes

(73.3%).

According to the findings of Akinwalere and Oduntan (2014) who mentioned high cost of feed,

inadequate and high labour cost, inadequate capital, finance and credit, price instability, high

mortality and high cost of drugs were identified as constraints to poultry farming.

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2.4 Conceptual Framework

The conceptual framework is shown in figure 1. This present a schematic diagram of the

relationship between key concepts and variables that is best related to the economic analysis

of broiler production among small scale farmers. This schematic diagram is divided into

three sections: A (Independent variables); B (Intervening variables); C (Dependent

variables).

The small-scale farmer who tend to engage in broiler production are influence by the capital,

feed supply, transportation, vaccination, housing, land, labour, number of day chick among

others.

Intervening variable are Government policy, cultural belief, low pricing, poor access to

market, deficiency credit facilities. Small scale broiler farmers who have the ability to

overcome these intervening factors would be able to increase their chances in broiler

production. The small-scale broiler farmer is expected to be motivated to engage in livestock

production, Income generation, increase employment opportunities, and enhance availability of

food (food security).

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 A C

Independent B Dependent

Variable Intervening Variable

variable

-Capital Broiler production

-Feed supply -Government

-Transportation policy, -Cultural
-Vaccination belief,
-Housing, -Low pricing,
-land -Poor access to
-labour market,
-number of day chick -Deficiency credit

facilities,

-Poor access to

agricultural loan

Figure 1: Conceptual Framework for Economic Analysis of Broiler Production Among the

Small-Scale Farmers in Otukpo Local Government of Benue State, Nigeria.

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3.0 METHODOLOGY

3.1 The Study Area

The study was conducted in Otukpo Local Government Area of Benue State, Nigeria. The

State is located in North Central Nigeria and made up of 23 Local Government Areas. Benue

State, Nigeria is one of the central area states in Nigeria with a population of about 4,253,641

in 2006 census. It is inhabited predominantly by the Tivs, Idomas and Igedes people, who

speak Tiv, Idoma, and Igede languages respectively. Its capital is Makurdi. Benue is a rich

agricultural region; popularly grown crops includes; oranges, mangoes, sweet potatoes,

cassava, soya bean, guinea corn, flax, yams, sesame, rice, groundnuts, and palm tree (Ode

2017).

Benue State is named after the Benue River and was formed from the former Benue-Plateau

State in 1976, along with Igala and some part of Kwara State. In 1991 some areas of Benue

state (mostly Igala area), along with areas in Kwara State, were carved out to become part of

the new Kogi State. Igbo people are found in the boundary areas like the Obi, Oju.

Otukpo Local Government Area of Benue State Nigeria is made up of four (4) districts; Adoka,

Ugboju, Otukpo and Akpa and its administrative headquarters is Otukpo town, and it located

about 104 km from Makurdi. The major ethic groups are the Idomas. Aside from Idoma

people, there are communities of other Nigerian tribes such as: Hausa, Yoruba, Ibo and Tiv.

Most members of these communities have lived long enough in Otukpo and have made it their

home thereby becoming Idoma through settlement. The people of the Otukpo local government

area predominantly speak a dialect of Idoma language except for the Akpa people (found

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around Otobi – Allan axis) who speak Akweya language. Otukpo Local Government area of

Benue state, Nigeria is bounded to the North by Apa local government area, to the South

by Obi, Ado and Okpokwu local government areas, to the East by Gwer West local

government area, and Gwer East local government areas, and to the West by Ohimini local

government area. and Ankpa local government area of Kogi State. Demographically, the

people mostly are farmers and about 70% of the people are engaged in the production and sale

of farm produce.

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Figure2: The map of Benue State showing the Study Area.

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3.2 Population and Sample Size Selection

The population for the study comprises small scale broiler farmers in Otukpo local government

area of Benue State, Nigeria. Multistage random sampling technique was used to select the

respondents for the study. In the first stage, three districts out of four were selected using a

purposive sampling technique as they have the highest number of small scale broiler farmers.

The three districts are Otukpo, Adoka and Ugboju. The second stage involved the random

selection of 3 poultry producing community from each of the district previously selected which

gave a total of 9 communities. The third stage involved a simple random selection of 12

poultry producers (broiler producing farmers) from each of the nine communities which

summed up to 108 respondents for the study.

3.3 Method of Data Collection

The study basically uses primary data which was collected through a set of well- structured

questionnaire to elicit information. The questionnaire was divided into four sections based on

the specific objectives of the study thus; A, B, C and D. section A contains information on

socio-economic characteristics of broiler farmers, section B carried information relating to

the cost and returns associated with broiler production, section C contain information on

socio-economic factors that influence broiler production, while section D contains

information on constraints to broiler production.

3.4 Validation and Reliability of Research Instrument

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The research instrument for this study was pilot, tested and subjected to scrutiny by experts

in the College of Agricultural Economics and Extension, Federal University of Agriculture

Makurdi to ensure that it possesses both face and content validity.

3.5 Data Analysis Techniques

Objective one and four were analyzed using descriptive statistics such as mean, percentage

and frequency distribution. Objective two was achieved using gross margin analysis and

objective three was achieved using multiple regressions analysis. The hypothesis was

analyzed using F-value test.

3.6 Model Specification

GM= TR-TVC

Where;

GM= Gross Margin

TR= Total Revenue

TVC= Total Variable Cost

The component of variable cost includes the cost of labour, cost per day old chicks, cost of
electricity, cost of feed, cost of maintenance, cost of transportation and cost of vaccination.

3.6.2 Model for the study is explicitly specified as follows;

Y = a + β1 x1+ β2 x2 + β3x3+ β4 x4............ βn xn + e......................... (1)

Where;

Y = dependent variable = broiler output (kg)

a = equation constant

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β1 - βn = coefficients of explanatory variables

X1 - xn = independent variables

e = error term

β1 - βn determine the gradient of the line and the constant 'a' determine the point at which the

line crosses the y- axis otherwise known as y- intercept (Gujarati and Porter, 2010).

3.7 Regression Analysis

The regression model that will be used to estimate this, is linear regression,

Y=β0 +β1X1i +β2X2i +β3X3i +β4X4i+………………………. β6X6i +Ui

Where;

Y = output of broiler (Kg)

x1 = Age of the respondent (years)

x2 = Sex (Male=1 and female =0)

x3 = Farming Experience (years)

x4 = Access to credit (Access=1 and non- access)

x5 = Contact with extension agent (contact=1 and non-contact=0)

x6 = Membership of Cooperative (Membership=1 and non -membership=0)

βo= constant term

βs= Coefficients

Ui =error term.

3.8 Measurement of Variables

Age was measured in years

Sex was measured as either male of female if male =1 and female=0

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Farming experience was measured in number of years spent in broiler business

Access to credit was measured using dummy 1 for access and 0 otherwise

Contact with extension agent was measured using dummy variable 1 for contact and 0

otherwise

Membership of cooperative was measured using 1 for those that are members and 0 for those

that are not.

Output of broilers was measured in Kg of matured broilers turned out before sale. It is

expected that the age of the respondent, farming experience, access to credit, contact with

extension agent and membership of cooperative will have a positive relationship with the

output of broilers.

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4.0 RESULTS AND DISCUSSION

This chapter presents the main findings of the study. It reports on descriptive statistics

analysis of demographic and socio-economic characteristics of broiler farmers,

determination of costs and returns to broiler production, analysis of factors that affect broiler

production and lastly the constraints to broiler production in the study area.

4.1 Socio-Economic Characteristics of the Respondents

The results on socio-economic characteristics of respondents are as presented in table 1. The

results show that 88.89 % of the respondents are males while 11.11% are females. This

difference is an indication that males are mostly involved in broiler production than the

females. This result is in consonance with that of Ike and Ugwumba (2011) who reported a

male dominance of 74% in poultry farming in Anambra State, Nigeria.

The result in table 1 shows that most (48.15%) of the respondents were within the ages of

18-28, (29.63%) were within 29-39, (11.11%) were within 40-50, (9.26%) were within 51-60

and while few (1.85%) are within the age of 60 and above. This result is in agreement with

the findings of Akerele et al., (2014) who reported that the majority of poultry farmers were

aged between 18 and 30 years. The mean age was 33 years for broiler farmers. This implied

that most of the farmers are in their active and productive age of production. This result

agrees with the findings of Akerele et al., (2014) who reported that the mean productive age

of poultry farmers was 41 years. This gave an indication that the youth were becoming

gainfully employed and that they are now realizing their potentials, instead of solely

depending on “white collar” jobs as in the past. The result also agreed with the findings of

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Akoroda et al., (2011) who find out that livestock farmers in Bayelsa State, Nigeria had an

average age of 40 years.

The marital status of the respondents as depicted in table 1 show that most (59.26%) were

single, (33.33%) of them were married, (7.41%) are widow and (1.18%) are divorced

respectively. This finding agrees with that of Okoh and Eyum (2016) who state that majority

68% of broiler farmer are single. This means that single people are mostly involved in

broiler farming. This however disagrees with the findings of Akerele et al, (2014),

Aromoralan et al, (2013) they noted that poultry farming is dominated by high percentage of

the married.

Analysis from table 1 depicts that most (42.59%) household size of the respondents are 1-6

persons, the average household size was 8 persons which is large and this could serves as a

source of labour for broilers farmers. This is in consonance with the findings of Ohiajianya

et al., (2013) who reported an average poultry farmer household size of 8 persons in Imo

state. This implies that family labour will be readily available for poultry production. Family

members serve as a source of labour for farmers, therefore many people feel it is good to

have a large family size so as to not to look for farm labourers.

From table 1, most (37.96%) of the respondents has attained tertiary education, (25.92%) has

attained secondary education, this is in agreement with the report of Aromolaran et al.,

(2013). This implies that majority of farmers have attained some levels of education and

therefore could read and write. This is in consonance with the report of Akerele et al., (2014)

who asserted that majority (63.8%) of poultry farmers had tertiary education. The high

literacy level of the farmers may affect positively their productivity of broiler farming as this

24
will translate to better managerial skills and adoption of innovation. The results indicate that

75.93% of the respondents has one form of education or the other.

The sales income distribution of respondents in the study area as shown in table 1 indicate

that majority (35.19%) of the respondents earn between 50,000-150,000, (26.85%) of the

respondents earn less 50,000.00 or less (5.56%) of the respondents earn between 150,000-

250,000, (2.78%) of the respondents earn between 350,000-450,000, (0.93%) of the

respondents earn 450,000-550,000, while few (1.85%) of the respondents earn 550,000. The

mean income of the respondents per annum was 151,268.5 naira. This implies that most of

the farmers are small holder’s farmer with small market of the broiler in the study area. This

study agrees with the finding of Abah et al. (2015) who stated that most 36.55% of producer

marketers earn between 101,000 -200,000 per annum.

Findings on farming experience showed that majority (57.4%) of broilers had experience of

1-5 years while 22.2% of broilers farmers had farming experience of between 6 and 10 years.

From the results, 9.3% of the respondents have experience of between 11- 15 years and 11.1

% of them have experience of between 16-20 years. The mean farming experience was 7

years for the farmers. This implies that farmers are recently investing into poultry faming

due to its perceived profitability. This result is in consonance with that of Sonaiya (2007)

who stated that 65% of the respondents had less than 5 years farming experience while 10%

had above 10 years of farming experience. Little years of experience could be the reason for

low layer production among the small-scale layer farmers. The knowledge on management,

which is a key to profitable poultry production, is gained through years of experience of the

poultry farmer (Fetuga, 1992).

25
Table 1: DISTRIBUTION OF RESPONDENTS SOCIO-ECONOMIC
CHARACTERISTICS IN THE STUDY AREA (n=108)

S/N Variable Frequency Percentage (%) Mean

1. Gender
Male 96 88.89
Female 12 11.1
2. Age
18-28 years 52 48.15
29-39 years 32 29.63
40-50 years 12 11.11 33
51-60 years 10 9.26
60 & Above 2 1.85
3. Marital Status
Single 64 59.26
Married 36 33.33
Divorced 8 7.41
4. Household Size
1-6 46 42.59
7-12 45 41.67 8
13-18 13 12.04
19 & Above 4 3.70
5. Level of Education
Primary 13 12.05
Secondary 28 25.92
Tertiary 41 37.96 12
None 26 24.07
6. Annual Income
<50,000 29 26.85
50,000-150,000 38 35.19
150,000-250,000 6 5.56 151268.5
250,000-350,000 29 26.85
350,000-450,000 3 2.78
450,000-550,000 1 0.93
550,000 & Above 2 1.85

26
Table 1 continues

7. Farming Experience
1-5 62 57.4
6-10 24 22.2
11-15 10 9.3
16-20 12 11.1 7

Source: Field Survey, 2020.

27
4.2 Costs and Returns Analysis of Broiler Farming in the Study Area

4.2.1 Total Variable Cost

This is defined as all the cost/expenses incurred in the course of broiler production.

The mean cost of labour was N29, 183.33 per 2 months of broiler production as shown in

table 2. The average cost of day-old chick was N325.93. The mean cost of feed was N152,

287. Average cost of selling price was N2, 726.85; mean cost of vaccination per number of

broilers produced was N2957.41. The mean number of broilers sold per 2 months was 206

approximately. The total variable cost per number of broilers produced was N268, 957.9.

The result implies that variable costs constitute the highest percentage in broiler production

and also the cost of feed was the highest. This is in line with the findings of Jimmy, (2016)

who noted that the cost of feeds constituted the highest percentage of the variable costs in

poultry farming.

4.2.2 Total Revenue

From the result in table 2 the revenue which is also known as the total returns was

N561643.5 as the mean value. This was gotten by multiplying the quantity of goods sold by

the price of the goods.

4.2.3 Gross Margin

The gross margin represents the difference between the total of all output and the

total variable cost. The result in table 2 shows that an average broiler farmer in the study area

earned a mean gross margin of N292685.6 per annum of broilers produced. This implies that

broiler production in the study area was profitable since it is believed that a business will be

able to continue production in the short run if it is able to recover its variable costs and earn

from it. This result is in line with the finding of Ogunyele et al., (2017)
28
Gross Ratio (GR=TC/TR). This is 0.48 this implies that from every N1.00 return to the

industry, 48.00k was being spent.

Table 2: COSTS AND RETURNS ANALYSIS OF BROILER PRODUCTION IN

THE STUDY AREA.

S/N Particulars Mean (N) Min Max

Variable Costs and Revenues Costs

1. Cost of labour 29183.33 1000 80000

2. Cost of day-old chick 325.9259 250 350

3. Cost of feed 152287 12000 400000

5. Maintenance cost 17671.3 17000 18500

6. Vaccination 2957.407 1500 4000

7. Number of sold broiler 205.6944 50 500

8. Selling price 2726.852 2500 3000

Total Variable Cost 268957.9 73000 644500

Total Revenue cost 561643.5 150000 1500000

Gross Margin 292,685.6

Source: Field survey, 2020

29
4.3 Socio-Economic Determinants of Broiler Production in the Study Area

In determining the effects of socio-economic characteristics on broiler production,

regression analysis was used. Age, sex, farm size, access to credit, contact with extension

agent, farming experience and cooperative membership were the factors that were fitted.

The result of the multiple regression is as presented in Table 3. From the analysis, the overall

F-square (3.72) is statistically significant at 1% level implying that the fitted variable

significantly influence the broiler production. The coefficient of multiple determination (R2) is

0.6391 an implication is that the fitted variables accounted for 64% variation in the production

of broilers in the study area.

From the analysis, three variables namely age, contact with extension agent and farming

experience were the important variables that significantly affect the production of broiler as

these were significant at 5%, 1% and 1% level of probability respectively.

Detail results show that, the coefficient of age in broiler production is positive in line with

aprorior expectation and statistically significant at 5% which mean that, farmer’s age is

associated with increase in broiler production by the value of the estimated coefficient. The

implication is that as farmer’s increases in age, he masters the business the more and will have

better managerial skills in broiler business. This result is in consonance with the result of

Tanko and Ayi (2014).

30
From the results as depicted in table 3, contact with extension agent has a coefficient of

(314171.7) positive in line with previous expectation and is significant at 1% level. This

indicates that as broiler farmers have contact with extension agent, they will be able to acquire

new innovation and skills which will translate to higher production of broilers.

The result indicated that in broiler production, farming experience is positive and significant at

1%. This implies that as the number of years spent in producing broilers increases, broiler

farmer will acquire more knowledge and master the business the more for optimum

productivity in broiler enterprises. The findings however, agree with that of (Aibefun &

Aderinola, 2012) who reported a positive and significant coefficient on farming experience.

This implies that increase in farming experience, tends to increase broiler production.

From these results, the null hypothesis which states that socio-economic characteristics of

broiler farmers do not significantly have effect on broiler production in the study area is

rejected.

31
TABLE 3: REGRESSION ANALYSIS OF SOCIO-ECONOMIC DETERMINANT

OF BROILER PRODUCTION IN THE STUDY AREA

Variable Coefficients t-value p-value

Age 6684.252 2.58 0.011**

Sex 62644.32 0.76 0.451

Farm Experience 19840.67 3.03 0.006*

Access to credit 137741.3 1.27 0.208

Contact with Extension 314171.7 2.81 0.006*

Cooperative 64333.27 1.06 0.291

Constant 709216.6 5.42 0.000 *

R-square 0.6391

Adjusted square 0.5879

F- value 3.72 0.001

Note. **, and * implies statistical significance at the 5%, 1% and 1% levels respectively.

Source: Field Survey (2020)

32
 Sources of Day-Old Chicks in the Study Area

The result in Table 4 shows that 37.96% of most respondents obtained their chicks from

Agrited hatchery in Lagos, Nigeria 35.19% obtain theirs from Olam hatchery in Kwara State,

Nigeria, 17.59% from Ota farm in Ogun state, Nigeria and 9.26% respondents obtained their

chicks from Chi hatchery in Ibadan, Oyo State, Nigeria. All those hatcheries are situated and

far from the study area, the implication is that these day-old chicks are transported from a far

distance which may lead to fatigue and stress on the day-old chicks and can cause high rate of

mortality when they are eventually brought down.

33
TABLE 4 SOURCES OF DAY- OLD CHICKS IN THE STUDY AREA

(n=108)

Variable Frequency Percentage (%)

Agrited hatchery 41 37.96

Olam hatchery 38 35.19
Obasanjo farm (Ota) 19 17.59
Chi hatchery 10 9.26

Source: Field survey, 2020

34
4.5 Constraints to Broiler Production in the Study Area

The findings in table 5 revealed the constraints in broiler production among small-scale
farmers in the study area. The result revealed that majority of the farmers was faced with the
problem of price instability with a mean score of 3.47 and this ranked 1 st. Inadequate feed
supply with a mean score of 3.34 ranked 2nd was another problem faced by the farmers.
Scarcity of day-old chicks (3.19) ranked 3rd, as another problem confronting broiler production
in the study area. Lack of government support (3.15), ranked 4th as another constraint to
broiler production. Lack of credit facilities (2.32) ranked 5th. Mortality problem (1.81) ranked
6th, This is attributed to inexperience in disease control. High cost of labour (1.74) ranked 7th
as another constraint. Technical expertise with mean score of 1.74, ranked 8th as constraint
faced by broiler farmer. High cost of feed (1.71) ranked 9th was another constraint. Lack of
modern technologies (1.66) ranked 10th. Inadequate extension services (1.59) ranked 11th as
another constraint faced by broiler farmers. High cost of transportation (1.42), ranked 12th as
another constraint discovered in the study area in broiler farming. This result is in congruence
with the report of Abiola (2007) who reported that high mortality rate, high cost of feed, high
cost of poultry equipment were constraints to poultry production. Tijjani et al., (2012) also
reported that lack of credit support and poor management practices, bird density and
inadequate ventilation were major problems of poultry farming. The result also concurs with
the report of Amorolaran et al., (2013) who posited that pest and diseases and difficulty in
credit and loan procurement were major constraints of poultry farming. Furthermore, the result
is in consonance with Akerele et al., (2014), and Akinwalere and Oduntan (2014) who also
reported that high cost of feeds, high mortality rate, inadequate capital and high cost of drugs
were major constraints facing the poultry industry.

35
Table 4: CONSTRAINTS MILITATING AGAINST BROILER PRODUCTION IN

THE STUDY AREA

Variables Mean Std. Deviation Rank

Price instability 3.47 0.76 1st

Inadequate feed supplies 3.34 0.53 2nd

Scarcity of day-old chicks 3.19 0.80 3rd

Lack of government support 3.15 0.91 4th

Lack of credit facilities 2.32 1.16 5th

Mortality problem 1.81 1.22 6th

High cost of labour 1.74 1.01 7th

Technical expertise 1.74 1.17 8th

High cost of feed 1.17 1.14 9th

Lack of modern technologies 1.66 0.88 10th

Inadequate extension Service 1.59 0.59 11th

High cost of transportation 1.42 0.87 12th

Source: Field Survey, 2020.

36
5.0 CONCLUSION AND RECOMMENDATIONS

5.1 CONCLUSION

The study assesses the economic analysis of broiler production among small-scale farmers in

Otukpo Local Government Area of Benue State, Nigeria. Analysis of the results revealed that

broiler farming is dominated by male (88.89) who are in their active and productive age with

mean age of 33 years. Most of the farmers (75, 93%) were educated, single (59.26%), with

average farming experience of 7 years and average household size of 8 persons. The average

annual income was N151268.5 and cost of feeds constituted the highest percentage of the

variable cost. Broiler farming in the study area is a profitable venture though farmers are not

fully practicing commercial farming. The study identified, age, contact with extension agent

and farming experience as variables that affect productivity of broilers farmers. These were

significant at 5%, 1% and 1% level respectively with positive coefficient signs. The coefficient

of multiple determination was 0.639 implying that these variables were able to account for

about 64% variation in the output of broilers. The study identified price instability, lack of

government support, high cost of feeds, lack of credit facilities, poor management practices,

high rate of mortality, high cost of transportation, inadequate extension services, technical

expertise, high cost of labour, scarcity of day old chicks and lack of modern technologies as

constraints facing broiler farming in the study area., From the results of the study, it has been

revealed that broiler farming is profitable and the socio-economic characteristics of the farmers

affect the broiler production in the study area.

37
5.2 Recommendations

The following recommendation were made from the study;

i. Government should encourage importation of high-quality veterinary drugs and vaccines.

ii. Extension services should be improved upon and intensified to impact technical and

economic knowledge to the farmers.

iii. Women should be encouraged to go into broiler farming by creating awareness for female

farmers to know the profit potential of poultry farming.

iv. Farmers should form cooperative society to enable them have access to productive inputs

and as well increase their access to credit.

v. Government should support farmers by providing inputs at a subsidized rate and also

provide soft loans for poultry farmers at a reduced interest rate.

vi. There should be price control to enable farmers have value for their broilers and also to

guide against price fluctuations.

vii. Spirited individuals and entrepreneurs are encouraged to establish hatcheries in the state

to guard against the transportation of day old chick from long distances to the state.

5.3 Contribution to Knowledge

The study provides information on the economics analysis of broiler production among small

scale farmers in Otukpo local government area of Benue State. The study revealed the socio-

economic characteristics of broiler producers in the study area. it also showed that socio-

economic determinants like Age, contact with extension agent and farming experience have

significant impact on broiler production implying that increase in them would increase in the

38
production of broilers. The study further revealed the problem militating against broiler

production in the study area.

5.4 Suggestions for further Studies

Further studies should be carried out in the following area;

i Analysis of technical efficiencies of broiler production enterprises

ii Problems of marketing in broiler production

39
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44
 APPENDIX I

QUESTIONNAIRE ON ECONOMIC ANALYSIS OF BROILER PRODUCTION

AMONG SMALL-SCALE FARMER IN OTUKPO LOCAL GOVERNMENT AREA
BENUE STATE, NIGERA

Department of Agricultural Economics,

Federal University of Agriculture,
P.M.B. 2373,
Benue State,
Makurdi.
20th March 2020.

Dear Respondent

I am OMAJI OCHE SAMSON a final year student from the Department of Agricultural
Economics, Federal University of Agriculture makurdi. I am conducting a research titled
"Economic analysis of broiler production among small scale farmers in Otukpo Local
Government Area of Benue State Nigeria” for my B. Agric. project.
I therefore request your assistance via completing the questionnaire below to enable me
realize the objective of my research. All information given will be considered confidential and
use for the purpose of this research only. Thanks for your anticipation cooperation.

Yours sincerely,

Omaji, Oche Samson

45
 SECTION A
INSTRUCTION: Please kindly tick the correct answer from option provided below.

Socio-Economic Characteristics of Respondents

1. Age (years): ………………………………………………………………………………..

2. Sex: Male ( ) Female ( )

3. Marital Status: Single ( ) Married ( ) Divorced ( ) Widow ( )

4. House hold sizes: …………………………………………………………………………

5. Level of formal education: None ( ) primary( ) Secondary( ) Tertiary( )

6. Annual income… … … … … … … … … … … … … … … … … … … … … … … … … . .
7. Farm size (m)…………………………………………………………………
8. Experience (years) in production……………………………………………
9. Source of Labour: Family ( ) Hired ( ) Both ( )
10. Contact with extension Yes ( ) No ( )
11. If yes low many times……………………………………………………….
12. Do you belong to any cooperative society: Yes ( ) No( )
13. If yes how long………………………………………………………….. )

14. Do you have access to credit: Yes ( ) No ( )

SECTION B:
Cost and Return of Broiler Farmers
Please kindly fill in the cost price of the following information.

15. Do you rear broiler Yes ( ) No ( )

16. How long do the broilers take to mature ……………………….………………..…………..
17. What is the average cost of labour (N /day) ……………………………………..………….
18. How many day old chicks do you rear at a time (in number)
………………………..................
19. Cost per day old chicks (in N) ………………………………………..……….….
20. Cost of electricity (in N) …………………………………………………………….……...

46
 21. Cost of feed (in N) ……………………………………………………………………….…
22. Cost of maintenance (in N) ………………………………………………………………….
23. Cost of transportation (in N)
………………………………………………………………….
24. Cost of water (in Naira/liter) …………………………………………………………………
25. Cost of kerosene (in N /liter) ……………………………………………………….
26. The average price sold for a matured broiler (in N ) ..……......…………………………..
27. Number of broiler sold (in number) ……………….……………………….…….
28. Cost of vaccination ……………………………..…
SECTION C
Socio-Economic Determination to Broiler Production
29. What influence your broiler business (a) age, (b) sex, (c) size of the farm land, (d) access to
government, (e) contact with extension agent, (f) cooperative
30. Where is your source of chicks ………………………..............................................
32. What kind of production system do you adopt (intensive, semi intensive and
extensive………………………………………………………………………………….

SECTION D

Constraints Militating Against Broiler Production.

Please indicate the extent to which you agree to the following as

S/N Items Strongly Agreed Disagreed Strongly

Agreed Disagreed
1 Lack of credit facilities
2 Inadequate feed supply
3 High cost of transportation
4 Mortality problem
5 Technical expertise
6 Price instability

47
7
Inadequate extension Services
8
Lack of government support
9
High cost of feed
10
High cost of labour
11 Scarcity of day old chicks
12 Lack of modern technologies

48