Determinants of cost inefficiency in poultry production: evidence from small-scale broiler farms in the Ashanti Region of Ghana

This paper examines the extent of cost inefficiency at 120 small-scale broiler farms in the Ashanti Region of Ghana by the use of stochastic frontier cost function, which incorporates cost inefficiency effects. Furthermore, farm-specific determinants that help explain why cost inefficiencies are different across broiler farms are identified. The findings confirm the presence of cost inefficiencies in small-scale broiler production in the area studied. Specifically, the results suggest that the broiler farms in question have the potential to reduce their production costs by 13.6% by being more efficient in cost management. The findings further indicate that experience in broiler production, an increase in farm size, veterinary contacts, use of self-prepared quality broiler feed, and membership in the Poultry Farmers’ Association (PFA) all help minimize cost inefficiency. On the other hand, the findings show that cost inefficiency appears to worsen with an increase in the market age of a farm’s broiler birds.