CHAPTER ONE

INTRODUCTION

1.1        Background of the Study

The livestock industry is very important in the Nigerian economy because it provides a good source of animal protein such as meat, milk and egg that are rich in the essential amino acids required for body functions (Adepoju, 2008).The industry, according to Okunmadewa (1999) provides raw materials such as wool, hides and skin for the development of local industries using them to produce items such as clothing, shoes, jackets and rugs for human use. Animal protein is important in the human diet for growth, maintenance and repair of body tissues, maintaining the water balance of the body tissues and for formation of hormones and emzymes(Tanko & Aji, 2014).

Poultry is a collective term for all avian species nutritionally and economically useful to man (Okoli, 2006). The most important poultry species remains the domestic fowl commonly called chicken not only because of its universal availability but also because it provides important highly relished human foods (Tanko & Aji, 2014). The other domestic avian species classed under poultry include turkey, duck, guinea fowl, goose and pigeon.

However, with continued population growth, urbanization, income growth, changes in life styles and food preferences, it was projected that meats and egg demand in the developing world will double between 1995 and 2020 to 190 million tons and increase by 25 percent in developing countries to 122 million tonnes (Delgado, Rosengrat, Steinfeld & Courbois, 1999). Demand for meat will grow faster than cereals in the developing world by 2.8 percent per year compared with 1.8 percent for cereals (Pinshup, Pandya & Rosegrant, 1997).

The problems of food insecurity and hunger in recent years have continued to attract the attention of experts and Governments worldwide (Babatunde, Omotosho & Sholotan, 2007).

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Several conferences and world food summits on human nutrition have brought back to centre-stage for debate the issue of eradicating extreme poverty and hunger, (Food and Agricultural Organisation (FAO), 2003). FAO (1995) also asserted that the most critical in the global food basket crisis is protein, especially of animal origin. The poultry industry represents the fastest and most economic means of bridging the animal protein shortage gap (Olufemi &Adeolu , 2013). FAO (1998) puts the current average level of animal protein consumption in Nigeria at 15g/head/day, which is grossly below the FAO recommended level of 35g/head/day.

According to Chukwuji, Inoni, Ogisi and Oyaide (2006), poultry production is attractive because, birds are able to adapt easily, have high economic value, rapid generation time and high rate of productivity that can result in production of meat within eight weeks and first egg within 18 weeks of first chick being hatched. They further stressed that poultry is an important source of animal protein, income, employment, industrial raw materials, manure, financial security etc. Poultry production has indeed become a leader in the livestock industry both in advanced management and technology.

The poultry industry in Nigeria has under gone a significant transformation since the early fifties from a backyard, peanut and primitive house hold-oriented husbandry to modern and large-scale poultry which can be found in the country side and urban centres today. Though the value of livestock resources have grown in absolute terms in recent years, its overall contributions to Agricultural output remains dismally low, Central Bank of Nigeria (CBN, 2006).

In Nigeria, animal protein, especially meat is expensive, in short supply and is out of reach to majority of the population (Ike & Ugwumba, 2011). The effect of inadequate animal protein intake is in fact more by a large proportion of the population especially in the rural areas, whose inhabitants constitute over 70% of the Nigerian population and who constitute over 85% of the extreme poor in the country (Chukwuji et al., 2006). However, for the fact that they will be an

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increase in population and demand for animal protein, poultry production is exploited towards meeting these needs.

According to technical centre for Agricultural and Technical Cooperation (CTA, 2004), the second half of 1990 saw a sharp rise in importation of poultry into Sub-Saharan Africa. Statistics from the Food and Agricultural Organization of the United Nations as reported by CTA (2004) reveals that importation of poultry to the region more than tripled between 1995 and 2002 rising from 97816 tonnes to 318102 tonnes. At the same time, global exports almost doubled soaring from 5661000 tonnes to 9381000 tonnes. In 2003, Africa imported about 182,000 tonnes of chickens from the European Union (CTA, 2004). The bulk of the meat arrived by boats, deep frozen at prices that defy competition. In spite of this importations however, the total supply of livestock products still fall short of the overall demand. However, the subsector is undergoing massive transformation fuelled by a high demand for meat which is likely to double in the near future(Gona, 2009).

According to Effiong, (2004), it is important to emphasize that farm production which is an organization of resources to produce outputs involves different operations with varying technical and managerial requirements. Livestock production could be significantly boosted through improved efficiency of farms by utilizing resources as well as introducing improved technology (Tanko & Aji, 2014). Efficiency is concerned with the relative performance of the processes used in transforming given inputs into outputs (Ohajianya & Onyenweaku, 2001). Production efficiency means attainment of production goals without waste (Ajibefun & Daramola, 2003). In essence, the efficient utilization of resources in the production process implies optimal productivity of resources. Farmers in Nigeria need to improve their efficiency in poultry production so that output could be raised to meet the growing demand, (Ojo, 2003). According to Effiong (2004) an increase in efficiency would lead to an improvement in the welfare of farmers and consequently a reduction in their poverty level and food insecurity.

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1.2        Problem Statement

Bayelsa State is reported to have the third lowest poultry population in Nigeria (FMARD, 2006) which makes poultry products more expensive when compared to other states in Nigeria. Poultry meat and egg offer considerable potential for bridging the nutritional gap in view of the fact that the birds are easily adaptable to our environment and the technology of production is relatively simple with returns on investment reasonably high (Tanko & Aji, 2014). Animal Scientists, economists and policy makers are of the opinion that developing the livestock industry is one of the options for bridging the generally known protein deficiency gap in Nigerians’ diet (Mbanasor & Nwosu, 2002 ).

Studies in the past have been done separately on egg and broiler production enterprise, using various analytical tools such as mean difference model, break even analysis, budgeting analysis, stochastic frontier production function, ordinary least squares and Seemingly Unrelated Regression (SUR) Model in estimating technical efficiency, efficiency of resource use, profitability, break-even point and cost and return (Adepoju, 2008; Mahama, Andah, Amegastie

&   Mesah 2011; Taru, Nkwi, Medugu & Reuben, 2010; Olasunkanmi 2008; Ike & Ugwumba, 2011; Olufemi & Adeolu, 2013; Ohajianya et al., 2013; Tanko & Aji,2014).

The uniqueness of this research is however, in the fact that this is the first time the stochastic frontier would be used in estimating the technical efficiency of egg and broiler farmers in Bayelsa State. Studies like that of Tanko & Aji (2014) compared economic efficiency of broiler and egg production enterprises in Niger State; Ike and Ugwumba (2011) estimated profitability of Small Scale broiler production in Onitsha North Local Government Area of Anambra State. Losumkanmi & Bamiro (2008) examined economic performance of commercial poultry farms in Oyo state, Taru et al., (2011) examined the economics of broiler production in Meme Division of Cameroun, Adepoju, (2008) worked on technical efficiency of egg production in Osun State, Olufemi & Adeolu (2013) assessed the economic analysis of factors affecting the profitability of