Profitability and Technical Efficiency of Pig Production in Nigeria: the Case of Ekiti State

Abstract

The study examined the profitability and technical efficiency of pig production in Ekiti State, Nigeria. A multi-stage sampling technique was employed in the selection of 80 pig farmers. Primary data were collected through structured questionnaire from the selected pig farmers. The data obtained from the farmers were analysed using descriptive statistics, cost benefit analysis and stochastic frontier production function. Findings revealed that majority (82.5 %) of the respondents were male, 40 % were within the active age of 35–46 years that can effectively withstand the rigors and stress involved in pig production, 76.25 % were married with a mean household size of 6people. The cost and return analysis showed that, in one production year, the gross margin was ₦694,592($3,484.44), while the rate of return on investment was ₦0.34 and the Cost Benefit Ratio (CBR) was 1.34 indicating that the enterprise is profitable since BCR is greater than 1. The result of stochastic frontier production function revealed that herd size ( P < 0.05), quantity of feed ( P < 0.01), capital ( P < 0.01) and labour ( P < 0.05) increase technical efficiency of the respondents, while inefficiency in the study area was reduced by age of the respondents ( P < 0.1), educational level ( P < 0.01), household size ( P < 0.05), farming experience ( P < 0.01) and breed of pig ( P < 0.1) reared by the respondents. The mean technical efficiency was 0.86. Although the pig farmers exhibit high technical efficiency in the study area, efficiency could still be increased by 14 % through better use of available resources given current state of technology which could be achieved through farmers’ specific factors like age, education and farming experience.