Analysis of Resource Use Efficiency and Elasticity of Production among Smallholder Broiler Producers in Ikwuano Local Government Area of Abia State, Nigeria

Abstract

Resource use efficiency is the extent at which a firm or production unit makes proficient decisions by utilizing limited resources to maximize profit. Elasticity of production is a measure of a firm's success in producing maximum output from a set of input. This research analyzed resource use efficiency and elasticity of production among smallholder broiler producers in Ikwuano LGA of Abia State, Nigeria. Specific analytical techniques employed was the production function analysis involving the four functional forms of linear, double log (Cobb Douglas), semi-log and exponential. This was used to obtain the parameters for the measurement of resource use efficiency among the broiler producers. The results of the analysis shows that resource use efficiency (r) was 1.064, 0.018, –0.046 and 0.049 for quantity of broiler produced (stock size), labour expenses, cost of medicines/drugs and feed expenditure respectively. Stock size and feed expenses had the highest efficiency index of 1.064 and 0.049. The least efficiency index was recorded for medicines/drugs with a negative value of –0.046 which implied that the resource use efficiency for medicines/drugs was grossly inefficient. The resource use efficiency for stock size/quantity of day-old-chicks shows that the resource was completely over used. The resource use efficiency with which poultry feeds were utilized shows that the quantity of feeds was over utilized. The elasticity of production of the smallholder broiler producers was 1.016 (ΣEp>1). This shows that, if all resources were to increase by 100%, output would increase by 101.6%. This implies that fixed resources (land, depreciated equipment) were abundant relative to variable resources (feed, day-old-chicks, medication and labour); yet, these fixed resources were not efficiently utilized due to lack of sufficient quantity of variable resources. There is a paramount need to increase variable resources in order to maximize profit.