Economic analysis of contract farming and technical efficiency of broiler farmers

Abstract

The study assessed the effect of contract farming on broiler production in Osun State, Nigeria. 120 farmers comprising of broiler farmers participating and not participating in contract farming were selected using multistage sampling technique. Information was elicited from the farmers with the aid of a structured questionnaire. The data were analyzed using descriptive statistics, Stochastic Production Frontier and Ordinary least square regression model. The findings of this study revealed that majority (75%) of the farmers rated the activities of contracting farming to be good and favorable, as the contract farmers earn more from broiler production than their counterparts. Average technical efficiency of the contract and non contract farmers were 0.8209 and 0.6803, respectively. The results also revealed that years of experience in broiler production, education of farmer, off-farm income, membership in farmers association, access to credit, access to veterinary services and participation in contract farming significantly affected technical efficiency of broiler farmers in the study area. Therefore, the study recommends that there should be increase in the awareness of the benefits associated with contract farming in agrarian communities, so that more farmers are encouraged to participate, as this will improve their production efficiency.