Economic Efficiency of Pig Production in Oyo State, Nigeria: A Stochastic Production Frontier Approach

Abstract

This study investigated the economic efficiency of pig production in Ogbomoso zone, agricultural zone in Oyo State, Nigeria, between June and October 2009 using stochastic production frontier approach. A multistage sampling technique was employed in the selection; Ogbomoso North and South Local Government Areas were purposively selected because of the larger population of pig farmers and structured questionnaires were used to collect data from randomly chosen one hundred and ten (110) pig farmers. Descriptive statistics, cost benefit analysis and stochastic frontier production function were used for analyzing the data. It was revealed from the findings that mean benefit cost ratio for pig production was 2.82, this means that the enterprise is profitable. The result of the Cobb- Douglass stochastic production frontier function also showed that stocking cost, cost of feed and cost of labour had positive significant effects on the production output, the estimated gamma parameter (γ) was 0.780 and highly significant at 99% (0.01). Sex, age and household size had negative significant effects on economic inefficiency. The sum of elasticity was 1.191, indicating a positive increasing return to scale in the study area which might lead to over utilization of inputs in terms of excess spending on inputs. Although, the pig farmers were found to be operating on the frontier and were generally economically efficient, higher improvement could still be achieved through easy accessibility to institutional credit, pens expansion, improved breeding stocks and provision of technical assistance.