COMPETITIVENESS OF BROILER CHICKEN VALUE CHAIN IN SOUTHWESTERN NIGERIA

Abstract

Broiler chicken is a major source of income and also contributes to gross domestic product in Nigeria. The total ban on broiler chicken meat importation was a government policy introduced to increase participation and protect local Broiler Value Chain (BVC) actors. However, smuggling of imported products still persists and may affect competitiveness of the locally produced broiler chicken. Empirical studies on market-led profitability of key actors in BVC in southwestern Nigeria are scanty. Therefore, competitiveness of BVC in southwestern Nigeria was investigated. A three-stage sampling procedure was used. Ogun and Oyo States were selected based on prevalence of poultry production in Southwestern Nigeria. Ten Local Government Areas LGAs (4 from Ogun and 6 from Oyo) proportionate to size were selected based on LGAs with highest production of broiler chicken. Using structured questionnaire, data were collected from 419 randomly selected actors (broiler chicken producers-176, processors 60 and marketers-183). Socioeconomic characteristics observed were age, Household Size (HS), Number of Income Earners (NIEs), sex, Marital Status (MS), level of education, Association Membership (AM), and Years of Experience (YE). Other variables studied were participation decision factors (credit access and tax), inputs, outputs and their prices. Indicators of competitiveness used were Private Profitability (PP >1), Private Cost Ratio (PCR <1) and Effective Protection Coefficient (EPC >1) for government policy. Data were analysed using descriptive statistics, policy analysis matrix and double hurdle model at a0.05 . Age, HS and NIEs were 38.0±7.6, 4.7±1.9 and 2.4±1.6 for producers; 37.6±8.1, 4.0±2.3 and 4.9±1.3 for processors and 38.7±8.2, 4.4±1.5 and 5.1±1.7 for marketers, respectively. Major actors were male (54.4%), married (50.6%) and 61.3% had tertiary education. Transportation (0.1479) was Participation Increasing Decision Factor (PIDF) for producers, while selling price (-0.1389) and inadequate water (-0.0001) were Participation Reducing Decision Factors (PRDFs). Tax (0.3082), HS (0.1017) and AM (0.2531) were PIDFs for processors. Credit access (0.2570) and theft (0.1401) were PIDFs for marketers, while AM (-0.1163) and tax (-0.1096) were PRDFs. Intensity of Participation Increasing Decision Factors (IPIDFs) for producers were MS (0.00094) and YE (0.0001), while inadequate water (-0.0003) was IPRDF. Selling price (-0.0001) was IPRDF for processors. The YE (0.0001) and AM (0.0008) were IPIDFs for marketers, while tax (- 0.0011), credit access (-0.0005) and selling price (-0.2818) were IPRDFs. Marketers had highest PP (N2,042,471.95), while processors had the highest social profit (N2,666,268.46). The PCR ranged from 0.51 to 0.61, while EPC ranged from 0.91 to 3.46 for all BVC actors. The PP of producers decreased by 26.6%, 36.2% and 56.7% with 20%, 40% and 60% increase in the price of inputs, respectively. The PP (N590,361.35, N1,985,199.82 and N2,042,471.95), PCR (0.69, 0.61 and 0.54) and EPC (3.46, 0.76 and 0.91) were all positive indicating competitiveness for producers, processors and marketers, respectively. Broiler chicken value chain was competitive in southwestern Nigeria with marketers being the most competitive, while producers were the most policy protected actors.