Cost efficiency of small-scale commercial broiler production in Zambia: A stochastic cost frontier approach

Abstract

Over the last two decades Zambia has experienced a rapid growth in poultry production and a large share of broiler meat production has been contributed by small scale urban producers. This study aims to estimate the economies of scale and cost efficiency of small scale broiler farmers in Zambia using a Cobb-Douglas cost function and the inefficiency effects model.  Data were collected from 90 small scale broiler farmers in the city of Lusaka selected using a snowball sampling method. The results show that cost efficiency scores ranged from 0.76 to 0.99 with a mean of 0.958. The frequency distribution indicate that cost efficiency scores for 10% of the farmers were between 0.78 and 0.89 and the majority (90%) the scores were between 0.9 and 0.99. Thus, most small scale broiler farmers were highly cost efficient in broiler production. For a farmer with the minimum efficiency, she/he could make cost savings of about 24% and yet produce the same level of output using the available technology.  The cost inefficiency significantly decreased with age, education and poultry training. Policy implications are that government should encourage young people be efficient poultry producers, enhance farmer’s level of education, training on poultry rearing skills including feeds and feeding since feed is a major determinant of broiler production cost. This can be achieved through short term trainings and extension services arranged during weekends and holidays to allow small scale poultry keepers with full-time jobs to participate. The analysis of scale effects found that the small scale broiler farmers were experiencing positive economies of scale and were in stage I and thus a need exists to move them to the more efficient stage II, through increased production of birds and efficient use of feeds.

Key words: Broiler, stochastic frontier model, cost efficiency.