Analysis of Farm Level Efficiency Among Smallholder Indigenous Chicken Farmers: A Case of Bomet County, Kenya

Indigenous chicken production has been advocated in alleviation of poverty as well as a source of food. There have been concerted efforts towards improving indigenous chicken production to make it more profitable and sustainable especially for smallholder farmers. Despite the improvement programs such as crossbreeding with commercial layers and broilers, formulation of feeds specifically meant for indigenous chicken, production has remained relatively low, and some farmers realize dismal profits if not losses. The production efficiency and/or inefficiency have not been empirically established with the influence of socioeconomic factors not well studied. Mr. George Kamau Gitau an MSc. Student at Egerton University is analysing farm level efficiency among smallholder IC farmers. The study is being carried out in Bomet County, Kenya.

The overall objective of the study is to contribute to efficiency of IC production through determination of profitability, socioeconomic factors and marketing channels influencing production among smallholder farmers in Bomet County. The specific objective includes determining resource use efficiency, determining return to scale of indigenous chicken, determining the influence of socioeconomic factors on farm level efficiency and determining the influence of marketing channels on choice of indigenous chicken production system. The study employs a stochastic frontier model to determine the technical, economic and allocative efficiency of indigenous chicken production. A profit function is used to determine the cost and return to farmers.A linear Tobit regression model is used to analyze the effect of socio-economic factors on the technical efficiency of the farmer. Likert scaling is used to assess the perception of farmers on which marketing channel influences their choice of IC production system. The frequency of the responses is determined using descriptive statistics.

In the study decision to choose a poultry production system is hypothesized to be influenced by farm characteristics, farmers’ socioeconomic characteristics, institutional support services and marketing channels.  The outcome  of  each  of  the  decision  is then  expressed  as  a  computed  profitability   of  the  chosen poultry  production  system.  The profitability  then  describes  the  efficiency  of  a  poultry  production  system  and  therefore  the hypothesis, the more profitable a system is the more efficient it is and the more efficient it is the more profitable it is. The farmers’ socioeconomic characteristics  of interest will be age and gender  of the household head,  level  of  education,  experience  in  poultry  keeping  and  off  farm  income.  The  age  of  the farmer  is  hypothesized  to  negatively  influence  production  efficiency. This is because older farmers are likened to be risk adverse making them late adopters of better technologies.

Gender is hypothesized to negatively influence production efficiency for female farmers due to challenges of accessing information and resources such as land.  Years of schooling is expected to have mixed results. Educated farmers understand the benefits of improved technologies and are faster in adopting them, therefore, enhancing production efficiency.  On  the  other  hand,  they  may engage  in  other  income  generating  activities  paying  less  attention  to  farming  activities,  and therefore,  reducing production efficiency. Experience in poultry farming is expected to have a positive influence on production efficiency.  Experienced farmers are able to make rational decisions regarding production compared to the less experienced. Off-farm income is expected to have  a  positive  influence  on  production  efficiency  this  is  because  the  farmer  has  a  regular income to purchase inputs and take care of accidental expenses.

The farm characteristics will include the size of the land holding, hired and household labour expenditure. Land  size is  hypothesized  to  positively  influence  production  efficiency  due  to  the  expected economies  of  scale.  Household  labour  is  expected  to  have  a  positive  influence  on  production efficiency since the cost of labour will be saved while hired labour is expected to have a negative influence.  The  institutional  support  provided  will  include  group  membership,  availability  and  access  to extension  services  and  access  to  credit.  The institutional support provided is hypothesized to have a positive influence.  Extension services will provide information on better methods and improved technologies. Access to credit will provide farmers with funds to purchase inputs and pay for services.  Group  membership  will  facilitate  farmers  to  save,  market  their  produce  and cater for their social welfare. The preferred marketing channels are hypothesized to have mixed results.  Local assemblers points are expected to contribute to efficiency.  This market channel is consistent and the marketing costs are likely to be minimized and farmers are likely to intensify their production. Farm gate, open air markets and farmer sourced outlets are inconsistent and likely to increase the marketing costs and farmers are less likely to intensify their production.

The expected output of this study is a thesis for the award of a Master’s degree in Agricultural and Applied Economics, a conference paper and publication of two papers in refereed journals. The information generated will be relevant to all stakeholders in IC production in improving the production with the ultimate goal being raising the living standards of farmers through improved incomes.