Cost-Efficiency of Small and Semi-Commercial Broiler Farms in Peninsular Malaysia

The broiler industry in Peninsular Malaysia faces significant challenges, including escalating production costs influenced by volatile feed prices, supply dependencies, and disruptions such as the COVID-19 pandemic. A comprehensive investigation was undertaken on 105 small and semi-commercial broiler farms in Peninsular Malaysia, employing structured questionnaires and a stratified random sampling approach. The study aimed to estimate the cost-efficiency of broiler farming and determine the factors affecting farm-level cost inefficiency. The findings confirm the presence of cost inefficiencies in small and semi-commercial broiler production in the area studied. Specifically, the research identified an operational inefficiency of approximately 7.1% above optimal costs among surveyed farms, suggesting a potential 7.1% reduction in production costs through enhanced management strategies. The findings indicate day-old chicks, feed, medicine, miscellaneous inputs, output, and capital significantly influenced cost function. Additionally, the study explored the significant role of extension services in reducing cost inefficiencies, with farms benefiting from such services exhibiting lower inefficiencies. In conclusion, this research provides critical insights into the complex relationships between efficiency drivers and inefficiencies within the broiler farming sector in Peninsular Malaysia. These identified factors offer valuable information for stakeholders to formulate effective strategies, optimize production processes, and enhance the competitiveness and sustainability of the industry.