Economic Analysis Of Layer Productions

Project and Seminar Material for Agricultural Economics and Extension

Economic Analysis Of Layer Productions


Abstract


This study examined the economic analysis of Layer production in Kwara State, Nigeria. Multi-stage sampling technique was employed to select 80 Layer farmers from 480 registered Layer farmers in the state. In the first stage, four (4) Local Government Areas (LGAs) were randomly selected out of the 16 LGAs in Kwara State. The second stage involves the random selection of four wards from each LGA given a total number of 16 wards. The third stage is the random selection of 5 farmers from each of the 16 wards selected. Both primary and secondary data were used for this study. Primary data were collected with the use of structured questionnaires designed in line with the objectives of the study while secondary data were from journals, conference papers and Layer production association documents. The data were analyzed using descriptive statistics such as frequency tables and percentages, inferential statistics including ordinary least squares regression analysis, farm budgetary and cost benefit ratio. The results of the study showed that 72.5% of the respondents were male, 78.7% were married. The mean age was 38.7 years and 63.8% choose Layer farming as main occupation. Analysis of costs and returns revealed that Layer production was profitable in the study area. The net farm income from layers production stood at ₦1,534,093.53 while that of broilers was ₦ 1,966,086.49 in one production cycle respectively. The regression analysis showed that the cost of day old chick, cost of labor, feed cost and cost of equipment were the significant factors affecting Layer production in the study area. They increase as the size of production increases. The regression analysis showed that the cost-of day old chicks, labor, feed and equipment were the significant factors affecting Layer production in the study area. They increase as the size of production increases. To achieve optimum output and maximum profit, Layer producers in the study area would have to stem down cost of production. Provision of technical education through extension agents would greatly help in achieving this lofty goal.


Chapter One


1.0 Introduction

One of the major challenges facing most developing countries is the satisfaction of the ever-increasing demand for calories and protein. Most African diets [Nigeria inclusive] are deficient in animal protein which result in poor and stunted growth as well as increase in spread of diseases and consequently death (Yusuf and Malomo 2007)
Animal protein sources include fish, egg, Layer meat, beef, milk, beacon, pork and mutton. They are delicious but not readily affordable. The common sources accessible to Nigeria populace are frozen fish, beef and Layer products [egg and meet]. Most farmers produce Layer especially in Kwara state Nigeria, however, the level of the productivity still remain local and small- scale.

Layer is a sub-sector in the livestock industry constituting a major component of the agricultural economy. The sector provides animal protein to the populace as well as employment for a considerable percentage of the population. According to FAO Report (2010) Layer comes fourth among sources of animal proteins for human consumption in Nigeria and contributes about 10% of the national meat production. Layer business is attractive because birds are able to adapt easily, have – high economic value – rapid generation time and – a high rate of productivity that can result in the production of meat within eight weeks and first egg within eighteen weeks of the first chick being hatched.

Okoli et al., (2004) revealed that 85% of rural families keep small ruminants and local fowls primarily as an investment and sources of manure or meat at home or for use during festivals. In spite of this, livestock production is still not keeping pace with the protein requirements of the rapidly increasing Nigeria population. Demand is more than supply. Since the responsibility of any civilized government is to provide adequate food and assure an atmosphere free from hunger and malnutrition, the Federal Government of Nigeria placed a ban on importation of frozen chicken and turkey parts to encourage massive Layer production locally [Agricultural Transformation Agenda 2012]. This policy has encouraged many investments in Layer production in Nigeria. It has therefore, becomes a full time job for many and is considered to be a commercially viable enterprise.

Considering Layer production as a commercially viable business, the knowledge of farm management demands economic measurement of profitability of such venture with the utmost aim of guiding the farmers in the appropriate use of resources/combination to maximize profit and encourage potential entrants to increase output and bridge the gap between national demand and supply of animal protein. This study is therefore analysing the economics of Layer production in Kwara state


1.2 Statement of Research Problem

In Nigeria, livestock production has not been able to keep pace with the animal protein demand. The FAO recommends that the minimum intake of protein by an average person should be 65gm per day; of this, 36gm (i.e 40%) should come from animal sources. Nigeria is presently unable to meet this requirement. The animal protein consumption in Nigeria is15gm per person per day (Tijjani et al.,2012) which is a far cry from the FAO recommendation. As a result of the above, wide spread hunger and malnutrition are evident in the country. Layer meat and egg offer considerable potential for bridging the nutritional gap in view of the fact that high yielding exotic Layer are easily adaptable to our environment and the technology of production is relatively simple with returns on investment appreciably high. Animal scientists, economists and policy makers are of the opinion that the development of the livestock industry is the only option for bridging the protein deficiency gap in Nigeria’s diets. The need to meet animal protein requirements from domestic sources demands intensification of production of meat and eggs derived from prolific animals like Layer birds

Apart from been a major source of protein in the country, Layer production has also been recognized as one of the quickest ways for a rapid generation of income. Ojo (2003) analysed cost and returns of commercial table egg production in Osun state, he reported that egg products has a mean value of N2, 158,162.53 with a net return of N1498.88 per bird. Similarly, Ibrahim et al.,(2009) in his findings revealed average net farm income of N85,558.30 with a return on capital invested of about 40%. In another report, Tijjani et al., (2012) showed that gross revenue and net farm income realised from Layer egg production in Maiduguri are N10, 5000.00 and N5, 540.00 respectively, thus, Layer egg production business was said to be highly profitable.

This study is also investigating the economics of Layer production in Kwara state with the view of encouraging prospective investors in Layer production which will not only reduce the gap between demand and supply of Layer products but will equally improves the livelihood of the people in the state.

This Study therefore provides answers to the following research questions:

  1. What are the socio-economic characteristic of Layer producers in the study area
  2. How profitable is the Layer production in the study area?
  3. What are the factors contributing to the output of Layer production in the study area

1.3 Objectives of the Study

The major objective of this study is to analyze the economics of Layer production in Kwara State, Nigeria. The specific objectives are to:

  1. Describe the socio-economic characteristics of Layer farmers in the study area.
  2. Estimate profitability of Layer production in the study area.
  3. Identify the factor contributing to Layer production in the study area

1.4 Justification of the Study

Layer production is commonly practiced on most farms but the profitability of such venture is questionable. This study is out to investigate the cost and returns to Layer production to enable farmer to see the advantages that Layer offers as a means of making money.

This research also aims to encourage anyone who is interested in Layer production. It result will not only show the lines likely to be most profitable, It will also point out those branches of the business not likely to be remunerative, except under special conditions.

Poverty reduction is one of the Nigeria’s policy challenges inhibiting the overall development of the country’s economy. Intensification of Layer production which has been recognized as one of the quickest ways for a rapid generation of income will go a long way to solve the problem.


1.5 Limitations of the Study

During the course of the research, many challenges are faced the major problem encountered was in the collection of data from target population due to the rumour of bird fluid disease the respondents were reluctant and do not want to be visited in their farm. The farmers do not allow farm visit which would have made the collection of data to be easy, methods like distribution of questionnaire to respondents and waiting for many days for reply was employ and also distribution through corporative society etc.


Chapter Five


Summary, Conclusion and Recommendations

5.1 Summary

An attempt to examine the economics of Layer production in selected local government area of Kwara State was the principal focus of this study. The specific objectives were to: describe the socio-economic characteristics of Layer farmers in the study area, estimate profitability of Layer production in the study area, and determine the relationship between inputs and output obtained in Layer production. Primary data were collected from 80 Layer farmers selected through multi-stage random sampling technique from Asa LGA, Ilorin east, Ilorin south and Moro Local Government Areas of Kwara State, using structured questionnaire. Descriptive statistics, farm budgetary technique, benefit cost analysis and ordinary least square regression analysis was used to analyze the data.

The results of the analyses revealed that majority (72.5%) of the respondents were male with the mean age of 38.7 years. (63.8%) of these youths had keen interest in Layer production and chose Layer farming as their main occupation. Result of the cost and returns to estimate the profitability of Layer production in the study areas revealed that there is profit in Layer production in the study area with net farm income from layers production stood at ₦1,534,093.53 while that of broilers was ₦ 1,966,086.49 in one production cycle respectively. The finding reveals that Layer production is profitable in the study area. Analysis of the result also showed that inputs such as cost of day old chick, labour, feeds, depreciating cost of equipment and operating expenses have significant relationship with Layer output in the study area.


5.2 Conclusion

This study investigated the economics of Layer production in the selected local government areas of Kwara state. Three important findings emerged; first, Layer production in Kwara state is dominated by highly educated youths, a positive sign for future Layer activities. Second, Layer production is highly profitable in Kwara state; however, broiler production contributed the highest return in the area of study. Thirdly, the costs of inputs as revealed by the regression analysis were high and increasing with the size of production thereby depriving the farmers the full benefit of their efforts


5.3 Recommendations

  1. To reduce cost of production Farmers should form agricultural cooperative groups which will enable them to benefit from the economy of scale through bulk purchases of farm inputs.
  2. Government should encourage the youths involved by providing them technical knowledge in the area of resource management through the extension agents to assist in reduction of production cost.
  3. Government should try to provide the essential farm input such as drugs and vaccine to the farmers at the right time and at subsidized prices to reduce the cost of production in order to improve profitability.

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