A Quantitative Determination of Allocative Efficiency in Broiler Production in Delta State, Nigeria

In order to determine the allocative effi ciency of broiler production enterprises in Delta State, Nigeria, panel data were collected for the period from January 2003 to September 2004, from 96 farmers, using a three – stage selection process. A production function incorporating inputs such as feed expenses, broiler stock size, operating and fi xed costs, with value of matured broilers as output was fi tted to the data. Th e results indicate that the average size of holdings is small, with a mean size of 680; average revenue per farm was N507,774.70 (US$3761.29) while net revenue per broiler was N 127.59 (US$0.95). Costs of feeds, day – old chicks and other capital inputs signifi cantly infl uenced the revenue generated by farmers (P 0.05). However, variable expenses were negatively related to output. Estimates of allocative effi ciency were 24.9, 24.8, – 4.6 and 11.9 for stock size, feed expenses, variable expenses and fixed capital inputs respectively. The implications are that though the farmers are generally and allocatively efficient, they need to increase the quantity of inputs in order to maximize profi ts. Farmers should be supported to expand the size of their holding and make better use of their resources by enhanced access to production credits and onfarm training