© Kamla-Raj 2015 J Hum Ecol, 52(1,2): 97-103 (2015)
Resource Use Efficiency: A Stochastic Frontier Production
Analysis of Smallholder Broiler Farmers in Capricorn District,
Limpopo Province
U. Luvhengo
1
, M. P. Senyolo
2
, A. Belete
3
and J.N. Lekunze
4
1
University of Limpopo, School of Agriculture and Environmental Sciences, Department of
Animal production and Agricultural economics, Turfloop Campus, Private Bag X1106
Sovenga 0727, South Africa
2
Taung Agricultural College, Department of Economics and IT, Private BagX532, Taung 8584
Telephone:
2
<+27-72-771-5376>,
3
<053-994-9800>, Fax:
3
< 086-762-9504>
E-mail:
1
<luvhengousapfa@gmail.com>,
2
<josephlekunze@yahoo.com>
KEYWORDS Technical Efficiency. Return to Scale. Poultry Production. Inputs. Socio-economic Factors
ABSTRACT The objective of the paper was to determine the level of resource use efficiency by smallholder
broiler farmers. Primary data was used and the stochastic frontier production analysis was applied to determine
efficiency in levels in broiler production by smallholder farmers. The results of the estimates showed that all the
inputs used were significant at one percent. The overall return to scale is greater than one indicating that resources
are under- utilized. The result also revealed that the estimated farm level technical efficiency ranged from eight to
ninety-seven percent with a mean of seventy-five percent on average indicating that smallholder broiler farmers
in the study area can improve technical efficiency by twenty-five percent. The study recommends that extension
officers should increase the frequency of contact with individual broiler farmers and implement policies that will
promote access to credit and transport as a means to helps farmers use their resources efficiently.
INTRODUCTION
The problems of food insecurity and hunger
in recent years have continued to attract the
attention of research experts and governments
worldwide. According to FAO (2015), progress
towards food security requires that food is avail-
able, accessible and in sufficient quantity and
quality to contribute towards human develop-
ment. The most critical concern in the global
food basket crises is protein, especially of ani-
mal origin. Isika et al. (2006) recommended poul-
try production as a strategic source of animal
protein in human nutrition due to its potential
for high productive capacity, short generation
interval and its competence in nutrient transfor-
mation to high quality animal protein.
In South Africa, the poultry industry con-
sists of layers and broilers and the country’s
broiler subsector had an estimated production
growth rate of twenty-six percent between 2005
and 2010 (DAFF 2011). Commercial broiler pro-
duction dominates the industry accounting for
about 93.6 percent of the total country’s broiler
meat production and the rest made up of small-
holder broiler meat producers (DAFF 2011).
Across the developing world, the majority of
the poor and most of the hungry live in rural
areas where family farming and smallholder agri-
culture is prevailing and has the potential to in-
crease productivity considerably and reduce
poverty and hunger significantly (FAO 2015).
According to FAO (2010), the definition of small-
holder farmers varies from one region of the world
to another. However, all smallholder farmers have
a common feature, which is production for fam-
ily consumption and sale of extra surplus and
are characterized by relatively higher labor to
capital ratio compared to commercial farmers.
Most of the products produced by smallholder
farmers are sold to local customers with a lower
degree of processing compared to large com-
mercial farmers who have access to retail and
export markets (Louw et al. 2011). In the South
African context, Kirsten and Zyl (1998) defined
smallholder farmers in general as farmers whose
scale is too small to attract the provision of ser-
vices they need to significantly increase their
productivity. Omotosho and Ladele (1998) de-
fined smallholder poultry farmers to have a flock
size of 1000 chickens or less.
In Limpopo province of South Africa, large
scale broiler meat producers are estimated at 404
(199 producers and 205 contract growers), which