A COMPARATIVE PROFITABILITY ANALYSIS OF BROILER PRODUCTION SYSTEMS IN URBAN AREAS

ABSTRACT

Broiler production is carried out under different production systems and different production systems imply variations in cost of inputs and returns. This study looked at the cost implications of raising broilers under different production systems as well as constraints faced by the farmers. The study was conducted in Edo State of Nigeria. The data used in the study were obtained from a cross-sectional survey of broiler farmers in the State from October–December, 2013. A multi-stage sampling process was used to select the 211 respondents for this study. The data collected were analyzed using descriptive statistics, profitability ratios and multiple regression models. A five point Likert scale was used to judge level of severity of the constraints faced by the farmers. The study showed that the mean age of farmers that adopted the battery cage systemwas 48 years and 46 years for the farmers that used deep litter system. The Gross Margin analysis gave a value of N2,422.24 and a Net Farm Income (NFI) of N2,412.40 per bird for battery cage system while the deep litter system had a gross margin of N1,601.77 and NFI of N1,593.80 per bird. The profitability ratios showed Rate of Return on Investment RRI (91.69%), Return on Labour RL (N18.03), Return on Feed RF (N144.22) and Return Per Naira invested RNI (N0.91) for the battery cage system as against Rate of Return on Investment RRI (70.74%), Return on Labour RL (N30.28), Return on Feed RF (N117.95), and Return Per Naira Invested RNI (N0.71) for the deep litter system. This shows that both systems were profitable in the study area. The Return per Naira Invested (RNI) showed that for every N1 invested a return of 91 kobo and 71 kobo accrued to the farmer for battery cage and deep litter systems respectively. Only three variables in the regression model were found to be statistically significant (P<0.05), these were feed cost, electricity, and purchase cost of day old chick for both the battery cage and deep littersystems. Feed cost was the major determinants of revenue accruing to the farmers.