Technical Efficiency of Broiler Farms in District Mansehra, Pakistan:A Stochastic Frontier Trans-Log Production Approach

This paper estimates the technical efficiency of broiler farms in district Mansehra, Khyber Pakhtunkhwa, Pakistan. Primary data were collected from 134 respondents using multi-stage sampling technique through well-structure interview schedule. For the estimation of Stochastic frontier tans-log production function, maximum likelihood estimation technique was used. To ensure the abnormality of data set Chow test and Dummy variable test was employed for any possible structure break across the broiler farms. Results indicated that there were significant structural breaks across the sampled farms. Based on these findings three different model was estimated for small, medium and large farms, respectively. The mean calculated technical efficiencies for small, medium and large farms were respectively 0.76, 0.96 and 0.92. This implies that the medium size farms in the study area were the most efficient in resource utilization as compared to small and large size farms whereas the small size farms were the most inefficient in resource allocation. Education has a positive and significant effect on the technical efficiency of small and medium farms. Therefore government should encourage educated people in broiler farming. Broilers farmers also need to be provided with loan facility on easy installments, for a smooth running of broiler farms in future.