An Economic Analysis Of Poultry Production Efficiency And Marketing In Rwanda

Abstract

In developing world, poultry subsector has gotten prominence both as a means of livelihood, reduction of poverty and malnutrition. However, there sector does little less than to Rwandan economy. The share of agricultural to GDP is 34% but there is more consumption of eggs and poultry meat than the production. Poultry human population ratio is around 1:4 while it’s around 1:1 to another developing world such as neighbors’ country Kenya, Tanzania, Uganda. Poultry contribute around 5.5% to animal protein while the average is approaching 40% in the rest of the world. This study explores the poultry industry and evaluate production efficiency at farm level and factors that influence performance were assessed. The study was conducted in 9 out 30 districts. One hundred and thirty-four (134) commercial poultry farmers were interviewed using a structured questionnaire. This study aimed at evaluating the poultry production given the market environment that farmers were operating in. The structure-conduct-performance approach was used to describe and analyze poultry market competitiveness while the stochastic frontier approach was used to estimate a self-dual Cobb Douglas production function, which gives estimates of technical and allocative efficiencies and also identifies the socioeconomic factors that influence observed efficiency. The study reveals that 92.54 percent of reared chicks were imported and among sampled farmers, 52.20 percent of them imported chicks themselves. Commercialized chicks market was controlled by top 4 traders and educated farmers, at least up to high school, controlled poultry industry at 62.10 percent. The first populated district also accommodated 16 percent of national poultry farmers. The study concluded that higher financial investment and information were barriers to majority of population. Lack of local chicks’ production and inadequate role of middlemen were also observed. Despite that the poultry industry was characterized by imperfections in different market segments, it is a growing industry; about 69 percent entered into industry one year before the survey. The sampled farmers’ mean technical efficiency was 77 percent with an allocative efficiency of 99 percent. From the analysis of the factors that influenced the poultry production efficiency, it was observed that mainly economic factors influenced technical efficiency whereas socio factors influenced allocative efficiency. On one side, earning more income, getting information from documentation and supply output to input sellers increased technical efficiency. Chicks’ input market alsowas among major determinants. On other side, for a farmer, being older and being male influenced negatively efficient resource allocation. Easy access to credit and access to information shall contribute to low income and non-educated people to enter into poultry industry. Access to information shall be increased through quality inspection of input to be sold and diversified source of extension. This will improve market transparence and competition hence higher productivity and poultry industry development by increasing efficiency in the use of existing technology and encouraging the entry of diversified actors into the industry to enhance innovation.