9

Agro-Science Journal of Tropical Agriculture, Food, Environment and Extension

Volume 16 Number 2 (May 2017) pp. 9 - 16
ISSN 1119-7455

RISK MANAGEMENT AND DETERMINANTS OF FARM OUTPUT AMONG

SMALL SCALE POULTRY FARMERS IN EKITI STATE, NIGERIA

Obike, K.C. Amusa, T.A. and Olowolafe, H.B.

Department of Agricultural Economics, Michael Okpara University of Agriculture, Umudike, P.M.B.
7267 Umuahia, Abia State, Nigeria.

ABSTRACT
The study was carried out to investigate risk management and determinants of farm output among small
scale poultry farmers in Ekiti State, Nigeria. Cross sectional data were collected from randomly sampled 120
poultry farmers with the use of a well-structured questionnaire. The data collected were analysed using
frequency, percentage, mean, chart and ordinary least square (OLS) multiple regression analysis. The results
of the study showed that production, financial, marketing, technological and human risks are the major
sources of risks encountered by the poultry farmers. Disease outbreak, high cost of medication and vaccines,
insufficient fund, lack of quality feed and fragility of poultry products are some of the risk situations in poultry
farming in the study area. Risk management practices among the farmers are enterprise diversification,
marketing and production strategies. The result of the multiple regression model (R2 = 0.96) revealed that
age, household size, stock size, capital input, farming experience, location, cost of medication and cost of
labour (p<0.01) are the major determinant of farm output among poultry farmers.This shows that better risk
management determines higher farm output. Based on the above findings, the study recommends that there
should be adequate institutional supports in form of credits facilities, sales of day old chicks, quality feed,
vaccines and drugs in government stores to poultry farmers for improved productivity.

Keywords: food security, risk management, poultry farming, small scale farmers, Ekiti State.

INTRODUCTION protein for healthy living. Proteins of animal

Food production is of high importance for sources include fish, milk, beacon, pork, mutton,
sustainable livelihood, economic productivity and beef and poultry products such as eggs and poultry
food security of the developing countries (Obike et meat among others.
al., 2016). Food security involves access by all Poultry is an important sub-sector of the
people at all times to enough food quality diet for Nigerian livestock industry as it provides
active and healthy living. The report of FAO significant proportion of the needed animal protein
(2013) showed that Nigeria has an energy intake of to the populace as well as creating employment for
1730Kcal and an average protein supply of 64g a considerable percentage of the population
capita per day far below the 2500-3400Kcal (Bamiro et al., 2009). FAO (2010) reported that the
minimum recommended daily intake. Similarly, poultry sub-sector comes fourth among sources of
Joseph and Ajayi (2002) stated that the animal proteins for human consumption in Nigeria
recommended minimum nutrient requirements to and contributes about 27% of the national meat
be consumed per day per capita includes the 2191 production. Intensification of production of meat
Kcal and 65-86 g crude protein out of which at and eggs derived from prolific animals like poultry
least 35g or (40%) must be animal protein. The birds is relevant to meet animal protein
present animal protein consumption in Nigeria is requirements from domestic sources. Yusuf, et al,
about 15g per person per day which is relatively (2016) stated that poultry products such as meat
below the recommended 35g per person per day and egg offer considerable potential for bridging
(Olarinde et al., 2010). This further aggravates the the nutritional gap in view of the fact that high
current wide spread hunger, malnutrition and yielding exotic poultry are easily adaptable to our
stunted growth as well as increased spread of environment and the technology of production is
nutrition-related diseases in most parts of the relatively simple with returns on investment
country. Hence, there is need for increased appreciably high. Apart from the nutritional
production and consumption of animal-based significance of poultry products, the economic
importance of poultry industry cannot be

Please cite as: Obike, K.C. Amusa, T.A. and Olowolafe, H.B. (2017). Risk management and determinants of farm output among small
scale poultry farmers in Ekiti State, Nigeria. Agro-Science, 16 (2), 9-16. DOI: https://dx.doi.org/10.4314/as.v16i2.2
 Risk Management and Determinants of Farm Output Among Small Scale Poultry Farmers 10

underestimated. The contribution of poultry farms while economic risks was identified as risk
production (meat and eggs) to total livestock output resulting from input and output price fluctuations
increased from 26% in 1995 to 27% in 1999 and it which translate to low income (Effiong, et al.,
is presently put at about 42% (Bukunmi and Yusuf, 2014). The use of debt in financing farm enterprise
2015). This is because, relative to other groups of exposes farmers to financial risk. Alimi and
livestock such as rabbit, cattle, sheep and goat, Ayanwale (2005) noted that financial risk occurs
poultry has the fastest rate of economic returns. In when enterprise profitability (rate of return) is less
addition, poultry production can be carried out in a than the cost of capital. Effiong, Enyenihi and
small area of land since the issue of land is a major George (2014) described other forms of farming
problem of agriculture in most part of Nigeria risks to include natural risks which results from
(FAO, 2013). Commercial poultry production in natural occurrences such as drought, flood, wind,
Nigeria was estimated at about 800 million USD as storm, diseases and pests and they have adverse
at 2010 (NBS, 2012). FAO (2010) reported that effect on output of agricultural production. Adubi
poultry sub-sector contributed about 25% of the (2000) noted that small scale farmers are more
agricultural domestic products of the Nigerian exposed to risk than other segments of the
economy. Socially, poultry meat and eggs are the population because they exist at the margins of
most consumed animal proteins due to lack of modern economy. Risk is an inherent feature of
religious or cultural discrimination against the modern poultry production due to the complex and
products unlike pig, dog and some other livestock. fragile nature of both the intermediate (day-old
Therefore, if the poultry industry is properly chicks) and poultry end products (meat and eggs).
harnessed, it is capable of serving as a major source In Nigeria, Adepoju, Timothy and Oyekale (2013)
of foreign earnings to complement the present observed that production activities of poultry
over-dependence on crude oil. Despite the farmers are characterized by high level of risks.
acknowledged nutritional and socio-economic These include high costs of inputs and veterinary
importance of poultry products, poultry production services which reduces productivity and net returns
is grossly challenged with notable farming risk. from the investment. In some cases, outbreak of
Risk in farming enterprise is the danger of possible diseases could wipe out the entire population of
occurrence of injury, damage, loss or uncertainty birds in a poultry farm leading to the death of the
that agricultural production will yield expected business enterprise. Further, theft of birds and
outcome or not. Jain and Parshad (2007) stated that market glut could force the farmers to sell off their
farming risks is associated with the negative products below production costs. This leads to
outcome that may stem from imperfectly reduction in profit, limited access to formal
predictable, biological, climatic and price variables. financial systems for credit and insurance,
Njavro (2009) grouped risk sources in agribusiness negligible capital investment and low savings
enterprises into social, market, institutional, (Oparinde, 2008). Hence, risk management effort is
financial, production and foreign exchange risk. important for sustainability of poultry farmers.
According to Olarinde, Manyong and Akintola Risk management in poultry farming is
(2010), risks associated with the farmers are extremely important because failure to manage
categorised into (i) market risks (demand and farming risks has direct negative effects on
supply) conditions, (ii) risk related to inflation and farmers’ income, market stability and potential
interest rates and (iii) production risk. Production food security. Abotsi, Dake and Agyepong (2014)
risk occurs because agribusiness enterprise is described risk management as involving the use of
affected by many uncontrollable events that are risk assessment techniques to determine the initial
often related to weather such as unlimited rain or level of risk and, if it is excessive, to develop a
drought, diseases and pests (especially in poultry strategy to ameliorate the risks until the overall
business), random physical hazards and level of risk is reduced to an acceptable level.
technological failure of the production process Vanany, et al., (2009) stated that understanding,
(Akinola, 2014). Production, market and financial identifying and assessing the risks based on
risk is the risk associated with adverse variation in probability of occurrence and severity of impact is
yield due to bad weather, disease outbreak, a starting point to develop effective risk
insufficient and untimely supply of inputs, management strategies. Asogwa, et al.,(2014)
insufficient credit and inadequate processing however noted that three important risk
facilities. Market risk is that borne when actual management decisions in the farms include keeping
prices are different from that originally expected. debt low, producing at the lowest cost and good
Social risks refer to actions of human beings on the liquidity condition. Howell and Hazzard (2012)
farm such as theft of produce, bush fire, invasion of maintained that decision for managing risk starts
Obike, K.C. Amusa, T.A. and Olowolafe, H.B. 11

with identifying the most crucial risk faced by major livestock reared in the state include poultry,
farmers, understanding the potential impacts and pig, sheep and goat.
likelihood of desirable outcomes, identifying and
taking possible steps to lessen the impacts to avert Sampling and Data Collection
failure. In Ekiti State, many of the existing poultry Multi stage sampling technique was used in
farms are folding up and prospective investors are selecting respondents used for the study. The first
becoming increasingly reluctant to invest in poultry stage involved purposive selection of the two
farming due to the associated risks and Agricultural Development Programme (ADP)
uncertainties in poultry industry. This trend if not agricultural zones in the state which are Ido Osi
checked could gradually and eventually lead to and Ikole zones. The purposive selection of the two
collapse of the poultry industry in the state. The zones was due to the presence of poultry farmers
consequences of the failure of major stakeholders across the zones. In the second stage, two Local
in poultry industry to rise up to the challenge of Government Areas (LGAs) were randomly selected
saving the industry could lead to a serious from each of the two agricultural zones giving total
reduction in poultry production and shortage of of four LGAs for the study. The third stage
protein intake of people. This according to Bamiro involved random selection of three communities
et al., (2009) could results into malnutrition, ill from each of the four LGAs giving a total of 12
health, lower productivity and poor welfare of the communities. In the fourth stage, ten poultry
farmers. This situation therefore justifies the need farmers were randomly selected from each of the
for a thorough assessment of existing risk 12 communities totaling 120 respondents (poultry
management and determinants of poultry farming farmers) that constituted the sample size for the
output. Hence, this study was carried out to study. The data for this study were collected from
empirically investigate major sources of risks in primary sources with the use of a structured
poultry farming, risk situation in poultry industry, questionnaire. The information that were collected
risk management practices by farmers and from respondents includes socio-economic
determinants of farmers output in poultry farming characteristics of the small scale poultry farmers,
using Ekiti State as a case study. major sources of risk in poultry farming, risk
situations, risk management practices adopted by
MATERIALS AND METHODS the poultry farmers.
Study Area
The study was carried out in Ekiti State, Southwest Method of Data Analysis
Nigeria. The state is located between longitude 4051 The data collected were analyzed using both
and 50451 East of the Greenwich and latitude 70151 descriptive and inferential statistics. For instance,
and 8051 North of the equator. Ekiti State lies South descriptive statistics such as charts, frequency and
of Kwara State and Kogi State, East of Osun State percentage were used for addressing major sources
and West of Ondo State. Ekiti State has 16 of risk in poultry farming. Risk situation among the
administrative Local Government Areas. The state poultry farmers and risk management practices
is broadly categorized into two agricultural zones: adopted by the poultry farmer were analyzed with
A and B, based on agronomic and ecological mean using 5-point Likert scale. This was
consideration (Fakayode et al., 2008). Ekiti State structured into Strongly Agree (SA), Agree (A),
has a climate marked by two major seasons which Undecided (UD), Disagree (D) and Strongly
include raining season which last between April to Disagree (SD) with corresponding values of 5, 4, 3,
October and the dry season lasting from November 2 and 1 respectively. The criteria reference or cut-
to March. The prevailing temperature of the state off point was 3.00. Therefore, any risk situation or
ranges between 210C to 280C with high humidity. risk management practice with mean value of 3.00
The topography of the state is mainly an upland and above was regarded as Agreed, otherwise
area, rising over 250metres above sea level (Ekiti Disagreed. The determinant of poultry farmer’s
State Government, 2008). The state has a projected output was realized using OLS multiple regression
population of 2,801,161 people as of 2011 analysis. The model specification of the regression
(National Bureau of Statistics, 2012). Agriculture is analysis is specified below:
the main occupation, providing income and Y = f (X1, X2, X3, X4, X5, X6, X7,X8, X9, X10, X11,
employment for more than 75% of its population. X12, X13, X14, ei)
The major cash crops grown in the state are cocoa,
coffee, kolanut, cashew and oil palm. Arable crops
grown are yam, cassava, maize, cowpea and
cocoyam (Ekiti State Government, 2008). The Where
 Risk Management and Determinants of Farm Output Among Small Scale Poultry Farmers 12

Y = Output (Naira)
X1 = Age (years)
X2 = Gender (Male =1, Female = 0)
X3 = Household size (number of persons)
X4 = Education (years of formal education)
X5= Primary occupation(Farming =1otherwise = 0)
X6 = Stock size (total number of birds)
X7 = Capital input (Naira)
X8 = Farming experience (years)
X9=Membership of cooperative (being member=
1, otherwise 0)
X10 = Location (Urban = 1, otherwise = 0)
X11 = Cost of feed (Naira)
X12 = Cost of medication (Naira)
X13 = Cost of Labour (Naira)
X14 = Risk index (ratio of risk recorded by a farmer
to total risks identified) ei = error term Figure 1: Bar Chart Showing Percentage Distribution of
The explicit form of the linear model is as follows: Major Sources of Risks Facing Poultry Farmers in Ekiti
State.
Yc = b0 + b1x1 + b2x2 + b3x3 + b4x4 + b5x5 +b6x6 + Source: Field Survey, 2016.
b7x7 + b8x8 +...........+ e
Four functional forms: linear, semi-log, double-log Risk Situation in Poultry Farming
and exponential were estimated using the Ordinary The result in Table 1 presents the risk situation in
Least Square (OLS). This was considered poultry farming in Ekiti State. Some indicators of
necessary in order to select the functional form risk situations in poultry farming in the area and
with the best fit. In the semi-log and double log their respective mean values include: frequent cases
forms, 0 values in the dummies were replaced with of disease outbreak (4.36), high cost of medication
0.0001. This is because, the number 0 is undefined and vaccines where available (4.19), insufficient
for log (Amusa et al., 2011). fund by most farmers (4.68), lack of quality feed for
improved yield (4.13), unfavourable weather
RESULTS AND DISCUSSION condition affecting poultry birds (3.98), fragility of
Major Sources of Risk in Poultry Farming poultry products such as eggs and day old chicks
Multiple responses of the percentage distribution of (4.57), lack of technical know-how of improved
major sources of risks faced by poultry farmers in farming technologies by most farmers (4.32) and
the study area is presented in figure 1. From the inadequate credit facilities for improved production
figure, 100% of the farmers faced production risk, (4.20) among others. This mean values of these
97% faced financial risk, 88% faced marketing indicators are greater than the cut-off point value of
risk, about 82% faced technological risk while 3.00 on five point rating scale which indicate that
about 67%, 62% and 50% of the farmers faced the identified indicators are risk situations in
human, causality and institutional risk respectively. poultry farming in Ekiti State. The findings of this
The findings of this study agreed with that of study is in line with that of Effiong, et al, (2014)
Akinola (2014) who identified risk sources in who identified the risks in poultry farming to
poultry farming to include market, production, include weather/climate, power failure, high
political (institutional), disease outbreak and mortality rate of birds, infestation of diseases,
financial risk among others. Olarinde, et al, (2010) changes in input prices, poor and inadequate
noted that risks associated with the farm system’s finance, attack by predators and poor storage
economic environment relate to uncertainty about facilities. Lawal, et al, (2009) reported that
market (demand and supply), inflation and interest endemic diseases such as Newcastle and Gumboro
rates (relevant to long-term planning) and are problems of poultry farming which however
production risk. require reliable vaccines that are not often available
to the farmers.
 13

Obike, K.C. Amusa, T.A. and Olowolafe, H.B.

Table 1: Mean ratings of the farmers on risk situations in poultry farming in the study area (n = 120)
SN Risk situation X SD Rmks
1 Frequent cases of disease outbreak 4.36 0.67 A
2 Rise in cost of inputs 3.84 0.47 A
3 High risk of theft 3.39 0.70 A
4 Snake attack 3.25 0.52 A
5 Lack of medication and vaccines for birds 3.85 0.67 A
6 High cost of medication and vaccines where available 4.19 0.46 A
7 Rise in cost of exotic breed 2.68 0.57 D
8 Insufficient fund by most farmers 4.68 0.46 A
9 Low demand for poultry products in demand 2.44 0.57 D
10 Lack of quality feed for improved yield 4.13 0.85 A
11 Unfavourable weather condition affecting poultry birds 3.98 0.50 A
12 Unstable price of products in the market 2.60 0.80 D
13 Lack of stable power supply for warming pens 3.88 0.49 A
14 Lack of storage facilities 3.92 0.77 A
15 Fragility of poultry products such as eggs and day old chicks 4.57 0.64 A
16 Stampede in poultry 2.38 0.52 D
17 High cost of labour 4.00 0.63 A
18 Poor technical know-how of improved farming technologies 4.32 0.52 A
19 Inadequate credit facilities for improved production 4.20 0.52 A
20 Lack of information on improved technology in poultry 3.84 0.72 A
21 Inadequate space for expansion of poultry business 2.58 0.81 D
22 Inadequate institutional support from government 2.78 0.82 D
Note: X = Mean, SD = Standard Deviation, A = Agree, D = Disagree
Source: Field Survey, 2016

risk. On the hand, the mean values of insurance

Table 2: Mean ratings of the risk management strategies was 2.05 while that of financial and risk
strategies practiced by poultry farmers in the study coping strategies were 2.43 and 2.42 respectively.
Area (n = 120)
SN Risk Management X SD Remar
The mean values of the items are in each case less
Practices ks than the cut-off point value of 3.00 on 5-point
1 Enterprise diversification 3.30 0.68 A rating scale. This indicates that insurance, financial
2 Insurance 2.05 0.90 D and risk coping strategies are not utilized by
3 Marketing strategies 3.98 0.71 A farmers for risk management in the poultry farming
4 Financial strategies 2.43 0.87 D
5 Production strategies 4.35 0.53 A enterprise in the state. Ajieh, (2010) stated that
6 Risks coping 2.42 0.89 D farm insurance is one good way of minimizing this
Note: X = Mean, SD = Standard Deviation, A = Agree, D problem of natural hazards, although, farmers in
= Disagree this area of study are yet to fully access insurance
Source: Field Survey, 2016
adequately.
Risk Management Strategies Practiced by the
Poultry Farmers Determinants of Poultry Farmers’ Output
The result in Table 2 presents the risk management Table 3 presents the results of the regression
strategies practiced by poultry farmers in Ekiti analysis and it shows that the semi-log functional
State. The result in the Table 2 showed that form had the best fit, based on the values of R2
enterprise diversification has a mean value of 3.30, (0.967), number and levels of significance of
while marketing strategies and production explanatory variables and their signs. The F-value
strategies have mean values of 3.98 and 4.35 of (241.136) indicated that the overall equation was
respectively. The mean values of these identified highly significant at (p<0.01) while Durbin-Watson
strategies are in each case greater that the cut-off (DW) of 2.210 showed the absence of
point value of 3.00 on 5-point rating scale. This autocorrelation these were age, household size,
indicated that enterprise diversification, marketing education, stock size, capital input, farming
and production strategies are practiced by the experience, location, cost of feed, cost of
poultry farmers for managing associated risks in medication, cost of labour and risk index. Age of
poultry farming activities in the state. In the farmers was significant and positively affected
affirmation, Miranda (2002) however stated that their poultry farming output at p<0.01. This
most farmers combined production, financial and suggests that as the age of the poultry farmers
marketing responses in tackling farming risk. increase, their output in poultry farming increase.
Kindre (2006) reported that enterprise The coefficient of the household size was
diversification has the tendency for improving significant (p<0.01) but negatively affected poultry
farmers’ income to offset any negative influence of farm output of the farmers.
 Risk Management and Determinants of Farm Output Among Small Scale Poultry Farmers 14

Table 3 : Determinants of farmer’s output in poultry farming enterprise in Ekiti State.

Variables Linear Semi log{a} Double log Exponential
Age (X1) 78.327 3.098 0.404 6.092
(7.127)*** (8.159)*** (4.245)*** (6.148)***
Gender (X2) 1.747 0.102 -0.001 111.242
(0.483) (0.083) (-0.377) (0.489)
Household Size (X3) 150.539 -0.029 -0.087 -3.911
(5.855)*** (-6.058)*** (-0.951) (-6.903)***
Years of Education (X4) 327.070 1.054 0.008 139.888
(2.185)** (2.064)** (1.45) (1.637)
Primary Occupation (X5) -0.865 0.018 -0.025 -19.950
(-4.679)*** (0.551) (-2.133)** (-5.338)***
Stock Size (X6) 76.249 0.819 0.153 4.794
(8.898)*** (4.028)*** (1.264) (8.296)***
Capital Input (X7) 1.264 9.006 1.062 415.438
(4.697)*** (6.570)*** (6.997)*** (3.043)***
Farming Experience (X8) 5.531 0.019 0.342 21.780
(3.098)*** (3.121)*** (3.560)*** (5.167)***
Membership -3.321 0.209 0.005 0.117
of Cooperative (X9) (-0.893) (0.376) (1.374) (0.993)
Location (X10) 1.894 0.199 -0.001 -1.070
(1.837)* (3.987)*** (-0.242) (-1.466)
Cost of Feed (X11) 0.304 -5.665 -0.361 658.636
(0.850) (-2.285)** (3.248)*** (0.363)
Cost of Medication (X12) -12.736 -3.440 -0.433 -600.290
(-3.571)*** (-5.696)*** (-4.657)*** (-4.415)***
Cost of Labour (X13) 18.004 6.545 0.686 843.861
(6.410)*** (3.122)*** (4.144)*** (5.137)***
Risk Index (X14) -4.044 -0.094 -0.141 1.698
(-1.031) (-2.474)** (-1.594) (0.361)
COSTANT 358.491 9.820 -0.210 -43.462
(6.491)*** (10.884)*** (-5.714) (-3.537)***
2
R 0.944 0.964 0.933 0.915
Adjusted R2 0.932 0.953 0.930 0.907
F-Value 228.602 241.136 230.795 116.592
Durbin-Watson (DW) 1.995 2.210 2.317 2.064
Observation 120 120 120 120
Note: Figures in parentheses are t-ratios.
*** denotes p<0.01; ** denote 0.01<0.05; while * denotes 0.05 <p<0.10
{a} is the lead equation based on fitness.
Source: Field Survey, 2016

This implies that increase in household size reduces related with poultry farm output. This is expected
the output of the poultry farmers. The negative as increase in number of birds should result into a
relationship between household size and output of corresponding increase in farm output, all things
farmers in naira may result from the fact that part being equal. The findings of this study corroborated
of products that would have been sold for money that of Yusuf, Tiamiyu and Aliu (2016) where the
are consumed by members of the households. This authors found that stock capacity significantly and
finding disagreed with that of Amusa, Enete and positively affected farm revenue. In agreement with
Okon (2011) where the authors found that this result, Nurudeen (2012), Yusuf and Malomo
household size significantly and positively affected (2007) explained that stock capacity stands for the
output of cocoyam farmers. Years of education of number of birds in the farm and farm revenue
the farmers was significant (p<0.05) and positively increases with number of flocks. The coefficient of
related with their poultry farm output. This capital input into poultry farming was significant
conformed with a priori expectation as increase in (p<0.05) and positively related with output. This
education is expected to increase the mastery and suggests that as the farmers increase capital input
expertise of the poultry farmers for increased into their poultry farms as investment, there is
output. The findings of this study is in support of increase in output. The findings of this study
that of Bukunmi and Yusuf (2015) who found that corroborated that of Bukunmi and Yusuf (2015)
years of education was positive and significantly who in a similar study found that farmers access to
influence poultry egg production in Ondo State. credit (capital) significantly and positively
Alabi and Aruna (2006) reported that level of influence poultry egg production. This is probably
education determines the quality of skills of because availability of adequate capital input to
farmers, their allocative abilities and how well finance and expand farm operations will in turn
informed they are to the innovations and result into improved productivity and farm output.
technologies around them. The coefficient of stock Farmers’ years of farming experience in poultry
size was highly significant (p<0.05) and positively farming was highly significant (p<0.01) and
 15

Obike, K.C. Amusa, T.A. and Olowolafe, H.B.

positively correlated with output. The positive and farmers are characterized by high level of risks.
significant relationship is indicates that farmers Theft of birds, price fluctuation, and other forms of
with high years of farming experience are likely to threats and uncertainty force some farmers to sell
attract more output that farmers with low off their products below production costs. This
experience. This conformed with a priori leads to reduction in profit, capital investment and
expectation. The finding of this study is in line with low savings of the poultry farmers among others.
the result of the study of Effiong, Enyenihi and Based on the background that this study was
George (2014) who in a study found that there is carried out to investigate risk management and
positive relationship between farming experience determinants of farm output among small scale
and poultry farm output. Farming involves a lot of poultry farmers in Ekiti State, Nigeria. The study
risks and uncertainties; therefore to be competent concludes that production, financial, marketing,
enough to handle all the vagaries of agriculture, technological and human risks are the major
farmers must have stayed in farming business for sources of risks encountered by poultry farmers.
quite some time (Ogundele and Okoruwa, 2006). Frequent cases of disease outbreak, high cost of
The coefficient of location (1 if urban, 0 otherwise) medication and vaccines, insufficient fund, lack of
was positive and significantly related to poultry quality feed and fragility of poultry products are
farm output at p<0.01. The positive relationship some of the risk situations in poultry farming in the
indicates that poultry farmers in urban areas have study area. Enterprise diversification, marketing and
higher output in poultry farming than their production strategies are the common risk
counterparts in rural areas. This is expected as the management practices among the poultry farmers.
steadily high demand for poultry products in urban Socioeconomic variables such as age, household
areas is capable of increasing the output of the size, education, stock size, capital input, farming
poultry farmers in urban than rural areas. experience, location, cost of feed, cost of
Cost of feed for poultry birds was significant medication, cost of labour and risk index
(p<0.05) but negatively related with output of significantly influenced output of the poultry
poultry farmers in the study area. This indicates farmers.
that an increase in cost of feed will result to Based on the above findings, the study
decrease in the output of poultry farmers. The recommended that:
coefficient of cost of medication was also negative 1. Small scale poultry farmers should be
and significantly related with output of poultry encouraged by government, non-governmental
farmers. Cost of labour was highly significant at organizations and development agencies to
p<0.05 and positively correlated with output of diversify into other viable income generating
poultry farmers. The positive relationship between activities to increase output and reduce shock
labour cost and output suggests that as farmers pay of failure,
more on labour, there is increase in output. In this 2. There should be organization of trainings and
case, the increase in labour cost may indicate hiring seminars for poultry farmers in the effective
of more labourers resulting in higher output. The risk management practices for maximum
findings of this study conformed to that result of output,
Yusuf, Tiamiyu and Aliu (2016) who investigated 3. There should be adequate institutional support
financial analysis of poultry production in Kwara in form of credits facilities, sales of day old
State and found that operating cost (TVC) which chicks, quality feed, vaccines and drugs in
may include cost of feed, medication, labour government stores to poultry farmers for
among others significantly influence revenue. The improved productivity.
coefficient of risk index was significant (p<0.05)
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