Economic Analysis of Different Broiler Farm Capacities: A Case Study of Jordan

Abstract

In agribusiness, broiler farms capacity is considered to be a very important factor in determining the profitabilityof these farms in developing countries. The main objective of this study was to introduce a comparative analysisof different broiler farm capacities in Jordan to determine the best viable capacity to be adopted. A total of 21,72, and 7 producers were interviewed representing small, medium, and large farms respectively. A structuredquestionnaire was designed to obtain information from respondents. The Net Present Value (NPV), the InternalRate of Return (IRR) and the Benefits-Costs ratio (B/C) were the discounted financial indicators used to achievethe goals of the study. The results of the study revealed that all the financial indicators used were economicallyacceptable in the medium and large size broiler production capacities. The NPV for these two capacities waspositive and acceptable (23437 and 55880 JDs respectively). The benefits of these two capacities outweighedthe actual costs that went in the project. For small farms, the NPV value was negative indicating non viable typeof business compared to the other two capacities. Each money unit invested in small farms will cause a loss of12.8 units (IRR = - 12.8%). On the other hand, each money unit invested in medium and large farms willprovide returns higher of about 22% than the costs paid (IRR = almost 22% for both). The payback for these twocapacities was 1.06 times the costs meaning that for every unit of cost the project will get 1.06 units of gain.Adoption of medium to large broiler farm capacities in Jordan is recommended by this study.