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Vertical integration and cost behavior in poultry industry in Ogun and Oyo States of Nigeria

Author

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  • Olasunkanmi M. Bamiro

    (Department of Agricultural Economics, Olabisi Onabanjo University, Yewa Campus, Ayetoro, Ogun State, Nigeria)

  • Adebayo M. Shittu

    (Department of Agricultural Economics, Olabisi Onabanjo University, Yewa Campus, Ayetoro, Ogun State, Nigeria)

Abstract

In this article, the influence of vertical integration on cost behavior in poultry farming in southwestern Nigeria is examined. The study was based on primary data obtained in cross-section survey of 211 randomly selected poultry farms in the study area. An average farmer in the sample was 44 years old; 85% were males and 72% had tertiary education. An average poultry farm in the sample had 4,342 birds, about half of which were laying birds. A set of cost and revenue share equations estimated by Zellner's seemingly unrelated regression (SUR) method revealed that vertical integration (measured in proxy by value-added sales ratio) is feed and veterinary service using, labor saving, and output augmenting. However, the scale effect of vertical integration was found to be higher in layers production than what obtains in broilers and cock|cockerel productions. [EconLit citations: Q120, D240, R340]. © 2009 Wiley Periodicals, Inc.

Suggested Citation

  • Olasunkanmi M. Bamiro & Adebayo M. Shittu, 2009. "Vertical integration and cost behavior in poultry industry in Ogun and Oyo States of Nigeria," Agribusiness, John Wiley & Sons, Ltd., vol. 25(1), pages 1-15.
  • Handle: RePEc:wly:agribz:v:25:y:2009:i:1:p:1-15
    DOI: 10.1002/agr.20185
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    References listed on IDEAS

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    1. Dalton, Timothy J. & Masters, William A. & Foster, Kenneth A., 1997. "Production costs and input substitution in Zimbabwe's smallholder agriculture," Agricultural Economics, Blackwell, vol. 17(2-3), pages 201-209, December.
    2. Jay T. Akridge & Thomas W. Hertel, 1986. "Multiproduct Cost Relationships for Retail Fertilizer Plants," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 68(4), pages 928-938.
    3. M. den Ouden & Aalt A. Dijkhuizen & Ruud B.M. Huirne & Peter J.P. Zuurbier, 1996. "Vertical cooperation in agricultural production-marketing chains, with special reference to product differentiation in pork," Agribusiness, John Wiley & Sons, Ltd., vol. 12(3), pages 277-290.
    4. Blackorby, Charles & Russell, R Robert, 1989. "Will the Real Elasticity of Substitution Please Stand Up? (A Comparison of the Allen/Uzawa and Morishima Elasticities)," American Economic Review, American Economic Association, vol. 79(4), pages 882-888, September.
    5. Chambers,Robert G., 1988. "Applied Production Analysis," Cambridge Books, Cambridge University Press, number 9780521314275, April.
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    Cited by:

    1. Baker, Derek & Mtimet, Nadhem & Pica-Ciamarra, Ugo & Nsiima, Longin, 2016. "Consumers’ preferences for animal-source foods and retail outlets: The case of Tanzania," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 11(3), September.
    2. Tsakiridis, Andreas & Hanrahan, Kevin & Breen, James & Wallace, Michael & O’Donoghuea, Cathal, 2016. "Feed substitution and economies of scale in Irish beef production systems," 149th Seminar, October 27-28, 2016, Rennes, France 244769, European Association of Agricultural Economists.

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