Felix Odemero Achoja
Abstract
Increasing concern about the problem of risk associated with poultry business has highlighted the need for its comprehensive understanding.
A clear knowledge of financialrisk in broiler enterprise will pave the way to efficientmitigation strategies among broiler producers.
This study investigates financialrisk programming, and threshold analysis in broiler enterprises in Delta State, Nigeria.
Probabilistic (multi-stage) sampling procedure was adopted in selecting 200 broiler farmers for the study.
Structured questionnaire was used to collect 6 years time series data (2004-2009) from the respondents.
Collected data were analyzed using descriptive statistics, QSB version of linear programming model, and threshold model.
The results of the study showed that broiler enterprise is profitablewith optimum net profitof N47,925 and N357,558 per small scale and large scale producers, respectively.
An optimum profitof N389.9 per bird was earned by broiler producers. The output of QSB version of linear programming showed that
at the stocking rate of 20, 692 birds, financialrisk is optimized at 15%. The threshold regression model revealed that the
broiler enterprise in the study area generally operated below the risk threshold. Simple regression indicated that expected return is
positively and significantly(P < 0.05) related with financialrisk. Incorporating financialrisk as a constraint in the broiler farm plan
is a useful contribution that will enhance efficientfarm planning. The optimal return and financialrisk threshold provided in this study
will improve the confidencelevel of stakeholders in poultry industry such as current and potential investors, insurance institution and institutional lenders.
This will translate to growth in the broiler subsector of the poultry industry in Delta State.
Key words:
Financial risk; risk threshold; risk programming; broiler enterprise.