Cost of Production and Financial Performance of Selected Poutry Rearing Farmers in Kiambu County, Kenya
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Date
2024-06
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Kenyatta University
Abstract
Commercial poultry farming in Kenya operate under various conditions and constrains, which stand on the way to the achievement of the enterprise leading to poor performance in the recent past. Comparatively, on a global perspective, the Kenyan poultry farming still struggles to remain competitive in the market. Profitability is mainly hampered by feed costs which counts for almost 70% of the total cost of production. The challenges the sector faces include high operational costs, shortage of funds for investing in the sector and inadequate knowledge among the farmers who desire to join into the sector as they lack field extension officers. This study therefore sought to investigate the effect of cost of production on performance of selected poultry rearing farmers in Kiambu County Kenya. The study was guided by specific objectives; the effect of feed costs, the effect of poultry equipment, the effect of brooding costs and the effect of medication costs on performance of selected poultry rearing farmers in Kiambu county, Kenya. The study was anchored on cash conversion cycle theory, transaction cost of economics theory, resource based theory and operating cycle theory. The study adopted descriptive research design, the population included the over 10,000 small holder poultry farmers according to country-integrated plan 2018–2020 and the sample was drawn out using the Kothari formula with a sample of 378 respondents. Snow ball sampling method was used to reach the respondents. Primary data will be collected using questionnaires that will be pilot tested to ensure they are valid and reliable. Descriptive statistics of mean, percentages and standard deviation and inferential statistics including multiple regression analysis were conducted. Before data analysis, several diagnostic tests were carried out including normality, multicollinearity and to ensure that the data was fit for analysis. The findings were presented in tables and figures using percentages and frequencies to facilitate comparisons and conclusion. The study was conducted in line with all the ethical considerations pertaining research in Kenyatta University and Kenya, such as securing all required permissions from the University and NACOSTI. The study revealed that production cost including feeding cost, poultry equipment, brooding cost and medication cost all individually had a statistically significant effect on performance and therefore all the null hypotheses were rejected. Feeding cost and medication cost had negative statistically significant effect, meaning that when the cost for feeds and medication increases, they lead to a decrease in financial performance. Also increase poultry equipment and brooding cost were found to positively affect performance. On feeding cost and medication cost, the study recommends that the farmers through the regulators to lobby for subsidies from the government so as to lower the cost of production. The study further recommends the farmers to invest in heavy technology in terms of equipment and brooding costs since greatly increase their financial performance.
Description
A Project Submitted to the School of Business, Economics and Tourism in Partial Fulfillment of the Requirement for the Award of Degree in Master of Business Administration (Finance Option) of Kenyatta University June, 2024
supervisor
Salome Musau