Profit Efficiency Assessment of Pig Production of Standardized and General Farms

Abstract

     Traditionally, Thailand is an agricultural country. Modernization and standardization therefore, is important to raise the productivity and quality of our agricultural output. This research focuses on livestock, particularly on pig production. The Department of Livestock Development has put in some efforts to push for standardization of pig production as more than 98 percent of the production output is for domestic consumption but the result is still undesirable. The objectives of this research were to assess profit efficiency of pig production of standardized and general farms. The analysis was based on primary data collected from a survey of 119 pig farms production data in 2006 and some secondary data from the published sources. From the profit frontier estimation, the result showed a slightly higher profit in general farm. However, viewing from a long term vision, such difference in profit gap will be minimized due to the over exposed of the sales prices, environmental requirements and other trade barrier issues. On the other hand, the standardized farm cost (main cost: animal feed) and that of the general farm certainly had a significant impact on profits. The negative attitude of the general farm and complicated processing application became some critical obstacles to the future development of the livestock in Thailand. It is therefore strongly recommended that the government authority should (1) simplify yet effective application procedures and (2) introduce a better incentive. The main objective is to attract those general pig farms to upgrade their pig production management by switching over to standardized farm.