CONTRIBUTION OF CRUMBLED FEED TO COST REDUCTION IN BROILER 
PRODUCTION: A FIELD EXPERIMENT 
  
 
BY  
 
EDEM FELIX AZAGLOE  
(10309582)  
 
 
THIS THESIS IS SUBMITTED TO UNIVERSITY OF GHANA, LEGON IN PARTIAL 
FULFILMENT OF THE REQUIREMENT FOR THE 
AWARD OF MASTER OF PHILOSOPHY (MPHIL) DEGREE IN AGRIBUSINESS 
 
DEPARTMENT OF AGRICULTURAL ECONOMICS AND AGRIBUSINESS 
SCHOOL OF AGRICULTURE 
COLLEGE OF BASIC AND APPLIED SCIENCES 
UNIVERSITY OF GHANA, LEGON 
 
 
JULY, 2017  
 
 
i 
 
DECLARATION 
I, EDEM FELIX AZAGLOE author of this thesis titled “Contribution of Crumbled Feed to Cost 
Reduction of Broiler Production: A Field Experiment” do hereby declare that except for reference 
which have been duly cited and acknowledged, this thesis is the result of my original research in 
the Department of Agricultural Economic and Agribusiness, University of Ghana from August 
2015 – July 2017. This thesis has never been published or submitted either in part or in whole 
anywhere for the award of any degree.  
 
……………………………….     ……………………………………. 
EDEM FELIX AZAGLOE        DATE 
(STUDENT) 
 
 
This thesis has been submitted for examination with our approval as supervisors.  
 
………………………………………          ……………………………………. 
DR. EDWARD EBO ONUMAH     DR. HENRY ANIM-SOMUAH 
(MAJOR SUPERVISOR)      (CO-SUPERVISOR) 
………………………………………          ………………………………… 
  DATE        DATE 
ii 
 
 
DEDICATION  
I dedicate this thesis to my father Mr. Stephen Azaglo, for his encouragement, and to my mother 
Madam Francisca Kumedzro for her sacrifices over the years. They have all been instrumental in 
my academic pursuits. I also dedicate this thesis to my siblings Michael, Vivian, Prosper, Sefakor, 
Doris and Abraham and to Eugenia Amador for her unflinching support and for the constant 
reminder that the work must be done with all diligence.   
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ACKNOWLEDGEMENT  
My ultimate and sincere gratitude goes to my Saviour Jesus Christ for the grace, guidance, wisdom, 
knowledge and understanding he bestowed upon me to successfully complete this study. I also 
acknowledge my main supervisor Dr. Edward Ebo Onumah for the time he dedicated to making 
my thesis an excellent one, his patience and the strong lecturer-student relationship he encouraged. 
Without his advice, scrutiny, guidance and encouragement, this thesis would not have been a 
success.  
I am also grateful to my co-supervisor Dr. Henry Anim-Somuah for his diverse contributions 
towards the planning and setting up of the experiment for a successful implementation. He attended 
the planning meetings with me. He visited the farm with me on many occasions to check on the 
set up of the experiment and the performance of the birds. Without his advice, criticisms and 
guidelines, this work would not have been possible. I appreciate the contribution and assistance of 
Mr. D. P. K. Amegashie, Prof. Daniel Bruce Sarpong. and Prof. Alhassan Ramatu. My gratitude 
also goes to all the lecturers of the Department of Agricultural Economics and Agribusiness of the 
University of Ghana for their immense support which facilitated the successful completion of this 
study. I am also grateful to the Ghana Poultry Project (GPP) for accepting and integrating my 
thesis experiment in their Greater Accra broiler production demonstration experiment. Special 
thanks go to Dr. Kwaku Adomako of Kwame Nkrumah University of Science and Technology, 
Kumasi and Mr. Kwaku B. Tuoho, the Value Chain team leader. I appreciate very much the 
assistance of the Enterprise Development and Productivity Advisor, Mr. Ernest Agbenohevi, 
Philip the Veterinary Officer, George the Assistant to operations on the experiment and Mr. 
Amankwa Augustine the owner of AMASS FARMS at Oyarifa where the experiment was carried 
out. My appreciation also goes to Mr. Isaac Nyarko for his valuable support.  
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ABSTRACT  
The ultimate goal of the study is to assess the crumbled feed technology with respect to its 
contribution in cost savings in per unit cost of production in broiler via a field experiment. The 
experiment was carried out using 294 broiler day-old-chicks divided into two groups; control and 
treatment, with three replications each. Each replication consisted of 49 birds. The experiment was 
carried out for six weeks, which means two weeks saved from the actual 8 weeks farmers keep the 
birds to get them ready for market. Data was collected from the experiment, on market prices and 
cost of production inputs used during the experiment. The study deployed experimental evaluation 
method to analyse the data. This method of analysis had two components: the statistical test for 
significant differences at 1%, 5%, and 10% percent, descriptive statistics and central tendencies. 
The statistical test was then complemented by the economic analysis using; minimum cost 
analysis, partial budgeting technique, marginal analysis, sensitivity analysis, ROI (return on 
investment) and finally, cost-price analysis and MVP (marginal value product) were also used. 
Feed conversion ratios of replications one and three showed significant differences between means 
at (P < 0.1) level in favour of the treatment group. Birds of the treatment group yielded better 
performance compared to the control group. The treatment group reached a feed conversion ratio 
(FCR) of 1.75 against 2.060 for the control group and the corresponding live weights reached were 
2.312 kg and 1.967 kg respectively for the treatment and control group.  Failure of the mean values 
of the parameters tested for significant differences means that the contributions of the technology 
was less linked to output directly, therefore further, economic analysis must focus cost reduction 
and saving in inputs use pattern. From the minimum cost analysis, it was observed that the 
crumbled feed offers the option of lower cost of GHS 6.100 which is preferable to GHS 7.130 to 
produce 1kg live weight of broiler. The analysis of the crumbled feed substituting for mash feed 
using the partial budget technique estimated the net contribution of the crumbled feed to be GHS 
3.760 per bird produced or GHS 1.630 per 1 kg of live weight of broiler produced. The sensitivity 
analysis results showed that a 5% increase in the price of crumbled feed leads to 3% increase in 
total cost of production. The cost-price analysis carried out revealed that the crumbled feed has 
contributed immensely to producing broiler competitively. Under the experiment, it is possible to 
produce broiler, process and market at the total cost GHS 8.182 per kg. The price of the most price 
competitive frozen chicken on the domestic market sells at GHS 8.000 per 1kg. At this point the 
domestic broiler production under the experiment is making zero margin in profit. Broiler 
producing business are thus encouraged to switch from the use of mash feed to using crumbled 
feed for raising broilers. Feed mills operators are also encouraged to produce high quality crumble 
feed for producers of broiler. Integration of the Ghanaian poultry industry with all sectors (feed 
mills, crop sector, hatcheries etc.), market and institutions must be championed and invested in by 
both government and the private sector. Broiler business should develop ready market (fast food, 
chop bars, restaurants and hotels) for their produce as a strategy to further reduce cost of 
production.   
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TABLE OF CONTENTS  
TITLE           PAGE 
DECLARATION ............................................................................................................................ ii 
DEDICATION ............................................................................................................................... iii 
ACKNOWLEDGEMENT ............................................................................................................. iv 
ABSTRACT .................................................................................................................................... v 
INTRODUCTION .......................................................................................................................... 1 
1.1 Background to the Study............................................................................................................... 1 
1.2 Problem Statement ....................................................................................................................... 5 
1.3 Research Questions ...................................................................................................................... 8 
1.4       Objectives of the Study.................................................................................................................. 8 
1.5 Specific Objectives ........................................................................................................................ 9 
1.6 Justification of the Study............................................................................................................... 9 
1.7 Organisation of the Study ........................................................................................................... 10 
LITERATURE REVIEW ............................................................................................................. 11 
2.1 Introduction ................................................................................................................................ 11 
2.2 Poultry Industry and Trends........................................................................................................ 11 
2.3 Broiler Production ....................................................................................................................... 17 
2.4 Inputs Use in Broiler Production ................................................................................................. 20 
2.5 Types of Feed Used in Broiler Production ................................................................................... 21 
2.5.1 Mash Feed ........................................................................................................................... 23 
2.5.2 Crumbled Feed .................................................................................................................... 24 
2.6 Partial Budgeting: ........................................................................................................................ 25 
2.6.1 Reduced Cost ...................................................................................................................... 26 
2.6.2 Reduced Income ................................................................................................................. 28 
2.6.3 Additional Cost .................................................................................................................... 28 
2.6.4 Additional Income ............................................................................................................... 28 
2.7 Comparison of Broiler Performance Under Mash, Pellet and Crumbled feed ........................... 28 
2.8  Reasons for Complementary Analysis ........................................................................................ 30 
METHODOLOGY ....................................................................................................................... 32 
vi 
 
3.1 Introduction ................................................................................................................................ 32 
3.2 Conceptual Framework ............................................................................................................... 32 
3.3 Experimental Design: .................................................................................................................. 34 
3.4 Method of Analysis ..................................................................................................................... 37 
3.4.1 Effects of Crumbled Feed on Broiler Production Indicators ............................................... 37 
3.4.2 Minimum Cost Analysis ....................................................................................................... 40 
3.4.3 Sensitivity Analysis of the Total (TC) ................................................................................... 42 
3.4.4 Competitiveness of Broiler Production Under the Experiment .......................................... 43 
3.5 Data and Study Area ................................................................................................................... 45 
RESULTS AND DISCUSSIONS ................................................................................................. 47 
4.1 Introduction ................................................................................................................................ 47 
4.2 Summary of the Outcome of the Experiment ............................................................................. 47 
4.3 Minimum Cost Analysis ............................................................................................................... 53 
4.4 Sensitivity of Total Cost to Increasing Price of Crumbled Feed and its effects on ROI ............... 56 
4.5 Competitiveness of Broiler Produced Under the Experiment at the Prevailing Market Price ... 59 
SUMMARY, CONCLUSIONS AND POLICY RECOMMENDATIONS ................................. 63 
5.1 Introduction ................................................................................................................................ 63 
5.2 Summary of the Major Findings of the Study ............................................................................. 63 
5.3 Conclusion ................................................................................................................................... 64 
5.4 Policy Recommendations ............................................................................................................ 65 
REFERENCES: ........................................................................................................................................... 67 
Appendices 1: .......................................................................................................................................... 74 
Appendix 2: ............................................................................................................................................. 77 
Appendix 3: ............................................................................................................................................. 78 
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CHAPTER ONE 
INTRODUCTION  
1.1 Background to the Study 
The poultry industry is by far the most popular and rapidly expanding animal meat production 
businesses globally (Watt, 2010). Law & Payne, (1996)  emphasised early on that regarding its 
progress, influence and significance in the 1990s, the poultry industry is really popular. This 
popularity is due to its low price, multipurpose and considered to provide great deal of health 
benefits than red meat. The growth of the broiler industry is evident in developing countries and 
is more rapid than the growth of other meat industries in the livestock sector (Chang, 2007). 
According to the (FAO Statistical Year Book, 2006), the 2012 global meat production targeted a 
two percent expansion of 302 million metric tons in meat production. The envisaged growth will 
be driven by two sectors; the pork and broiler meat production sectors which reached a record of 
100 million metric tons and 101.600 million metric tons respectively in 2011. The bigger crunch 
of this growth will come from developing countries, specifically Asian countries (Watt Executive 
Guide, 2012).  
Projections from FAO suggests that in the year 2021, the poultry meat market will be 127,000000 
metric tonnes compared to the pork meat market share 126,000000 metric tonnes (OECD-FAO, 
2015). Meat production worldwide is also anticipated to slow down over the next decade, 2016 to 
2025 from previous growth rates. FAO forecasts world meat production will slow down from an 
average growth rate of 2.200 % per year in the previous decade to 1.800 % per year, which is 
mainly attributed to slower growth rates in Latin American countries, especially Brazil.  
1 
 
Poultry production, which increased by 14 % per year over the last decade, are estimated to average 
growth in the 2 % per year range to 2021. In all, 77% of the additional meat production surge 
during the period to 2021 will be accounted for by developing countries. Poultry production will 
remain in its growing course at the fastest rate, 2.200% per year, in comparison to other meats at 
the close of the same period with the highest production volume in the meat industry. As with 
demand for eggs, much of the global projection of consumption of meat is to make up 56 percent 
of the increase in meat demand between 2009-11 and 2021. The rise in meat consumption globally 
between 2009-11 and 2021 will also influence and shift the consumers’ choice for goods.  
The increase in demand for poultry and poultry products was as a result of high interest in its 
production and consumption (Colecraft et al., 2007). Relatively, poultry production has a shorter 
gestation period compared to other livestock such as goats, sheep, and cattle (Obi & Sonaiya, 
1995). In 20 years, there is going to be an increase in the global demand for poultry by more than 
6% (Watt Executive Guide, 2012).  
In the southern region of Africa, South Africa is the largest producer of broilers. Its production 
represents 1.5 percent of global poultry meat production. In the sub-region, South Africa’s poultry 
production makes up about eighty percent of broiler production (Sikuka & Torry, 2016). Global 
trends indicate that Africa is the new ready ground for colossal investment in poultry (Rabobank 
report, 2014).  
Poultry and poultry products are a relatively cheaper packed source of protein (Kwadzo et al., 
2013), resulting in high consumption of poultry and poultry products in Africa (Shane, 2006; 
Killebrew and Plotnick, 2010). Poultry meat eating is very high in countries such South Africa, 
Morocco, Egypt and Nigeria (FAOSTAT, 2006) and yet production volumes remain very low in 
2 
 
Africa (Watt, 2010). Poultry and poultry products are considerably important to human beings. It 
is an important source of income, food and employment (Anang et al., 2013). The poultry industry 
in Ghana remains a major contributor to the Ghanaian economy as it employs many people and 
also improves food and nutrition security. There has been a major increase in the consumption of 
broiler meat in Ghana over the years (Johnson and Kufoalor, 2017). Less than 10 percent of the 
broiler meat consumption in Ghana is accounted for by local production (USDA, 2013). The 
population and housing census of 2010 reveals that 14,000000 birds are raised in the country as 
against 14,600000 recorded in the 1996 showing a huge reduction in production. This decline has 
serious negative effects on the maize and soybean sectors because the two sectors are directly 
linked to the poultry industry (SEND-Ghana, 2008).  
Ghana’s domestic consumption of chicken has seen an exponential growth by almost a factor of 
four (400%). This has resulted in a remarkable rise in market for poultry and poultry products in 
the country from 2000 to 2009 according a report of the Ministry of Food and Agriculture (MoFA, 
2010). However, with this expansion in Ghana’s domestic market for poultry, the industry was not 
able to meet the demand (Khor, 2006). In the poultry production process, the feeding component 
represents seventy to seventy-five percent of the total cost of production (Sumberg et al., 2013).  
The constraints holding back the growth and competitiveness of the broiler industry are high costs 
of production, inefficient production methods, financing, institutional arrangements, restricted 
information of current poultry keeping, absence of value addition facilities and high energy prices 
(Killebrew & Plotnick, 2010; Kwadzo et al., 2013). Across the continent of Africa in general, some 
basic constraints are principally common to the poultry industry. Killebrew and Plotnick (2010) 
indicated that significantly huge costs associated with the poultry business, as well as glitches 
across Africa related to hygiene and poor know-how in rearing birds (operations and management) 
3 
 
and marketing issues are general constraints. (Dupaigre et al., 2004) also held the view that the 
challenge with acquiring inputs, high veterinary service charges and occurrence of diseases are 
hindrances to poultry farmers across Africa. Countries like Brazil and the United States of America 
enjoy very low costs of broiler production because of the low cost of feed (Davis et al., 2013). 
Globally, the relationship between the feed sector and broiler production is well established and 
acknowledged (Shiferaw et al., 2011).  
Johnson & Kufoalor (2017) noted that it is far from being achieved as a short term industrial goal 
for the Ghanaian broiler industry to replace the import of frozen chicken with home grown broiler 
meat by domestic broiler businesses. This however is a long term industrial goal requiring a strong 
foundation for competitiveness of the industry to be achieved over a period. Due to feed which is 
contributing the biggest share to the cost of producing broilers, it is the interest of this study to 
understand how feed can be manipulated to reduce cost of production towards the competitiveness 
of broiler production in Ghana.  
In Ghana, the use of mash feed by broiler producers is widespread and will require evidence-based 
information supported by results to get them to buy into the new technology. This must be 
combined with the innovation to reduce drastically the high cost of production. Technology and 
innovation have produced crumbled feed forms which could be used in the production of broilers 
to verify their performance, how and what they contribute to cost reduction in broiler production. 
Feed prices is one of the two most influential factors on which the meat market is going to heavily 
depend on from the year 2012. Global food price is one of the factors driving the feed price increase  
(Watt Executive Guide, 2012).  
Experimental economics deploys experimental approaches to evaluate theoretical predictions of 
economic behaviour. It is based controlled, scientifically-designed experiments to test economic 
4 
 
theories applied to laboratory settings. Typical empirical research is restricted in term of its ability 
to measure only a subgroup of the group of all the likely effects that impact (or can be observed to 
be affecting) economic decision making; therefore, the ability to control for certain effects is 
limited or non-existent. With experiments, economists can for example fix some factors of 
production and measure the effects of the other factors in a way that allows ceteris-paribus 
comparisons (https://www.sciencedaily.com/terms/experimental_economics.htm).  
The improvement of the productivity of two heavily interlinked sectors (maize-feed and poultry 
sectors) of the Ghanaian agriculture have been the subject of policies and programmes, and most 
of the times the competitiveness of the poultry sector compared to the imported frozen meat is the 
focus of development policy discussions (IFPRI, 2017). To therefore know how broiler production 
cost should be reduced to underpin the competitiveness of poultry production and that of the whole 
Ghanaian poultry industry, research must provide concrete intelligence on technologies to invest 
in regarding housing, management and feed as this study has set out assess the cost reduction 
contribution of the crumbled feed technology.  
1.2 Problem Statement  
Competition from imported chicken meat is one of the major challenges of Ghana’s broiler 
industry (Tuffour & Sedegah, 2013). Broiler producers are not able to produce at a cost frontier 
that enables them to be competitive at the prevailing market price. Most poultry farmers who are 
in the business of broiler production in Ghana have either shifted to egg production or have 
completely discontinued their broiler businesses as a result of the array of problems facing the 
industry. Among the challenges facing the producers of broiler in countries where the industry is 
struggling include high levels of importation of broiler meat, uncompetitiveness and the high cost 
of feed  (Tuffour & Sedegah, 2013; Akunzule, 2014). Among the components of the total cost of 
5 
 
production which include fixed costs (costs of housing, feeding and drinking troughs, water 
reservoirs, wellington boots, equipment and permanent labour) and variable costs (feed, drugs, 
veterinary service charges and electricity), feed cost is noted to be very high. Confirming this, 
Johnson and Kufoalor (2017) reported that feed cost as a variable cost component, represents 70 - 
75% while Akunzule (2014) reported 60 – 70% as the proportion feed cost in the total cost of 
broiler production. Literature on global, regional and national poultry farming indicate that cost of 
feed exerts a lot of pressure on the industry, and this has serious implications on profitability and 
on the pattern, scale and rate of production ( Watt Executive Guide, 2012; Watt, 2010).  
Feed is the driver and the sustainer of the broiler industry (Watt Executive Guide, 2012; Global 
Poultry Trends, 2014). High feed cost influences the total cost of production which is inextricably 
linked to the uncompetitiveness of the industry and this in turn fosters importation. In view of the 
high cost of feed, there is the need for combined efforts of technology and innovation to reduce 
cost of production. The question that one will ask is, “what will be the variation in the total cost of 
production should the unit price of feed go up?” especially in a country, Ghana, where it is really 
difficult for the price of poultry feed to decrease because there is a competition for maize (the 
major poultry feed component) between human consumption and the feed industry.  
Crumbled feed is a type of feed fed to farm animals including broiler. It is a granular form of feed 
ranging from 1.81 mm to 2.3 mm in diameter. Crumbles are obtained by first compacting feed into 
pellets and broken into smaller sizes. Mash feed is the feed type with fine particles. All argument 
scan be made, however, if it does not make economic sense to the broiler producer, it will be 
rejected. Economics are as well affected by the performance of the broiler birds.  Ioannis 
Mavromichalis (March 12, 2014). Due to the pecking nature of birds, they show so much 
preference to big particles in feed in proportion to the size of their beak (Portela et al., 1988). There 
6 
 
is paucity of comprehensive study in literature of either crumbled or pelleted feed-use in Ghana 
by broiler producers. This scarcity of studies on the use crumbled or pelleted feed by broiler 
producers in Ghana implies that mash feed is the most commonly used feed form by broiler farmers 
throughout Ghana. It is also the most patronized feed form in Ghana by poultry producers. Studies 
on the broiler industry in Ghana do not explore the benefits from the use of crumbled feed such as 
reducing or savings made in the cost of production and increasing returns as reported in other 
countries. The crumbled feed is reported in many countries to contribute to cost reduction, 
profitability, better feed conversion ratio (FCR) and improving weight gain of broilers. Feeding 
crumbles to broiler birds is accepted to massively improve their performance, feed conversion ratio 
(FCR) and feed intake (Dozier et al., 2010; Chehraghi et al., 2013; Lv et al., 2016). Per the many 
studies that were carried out in many countries either than Ghana, findings reported that in 
comparing the performance of mash feed to that of the crumbled feed, birds showed greater 
preference to the crumbled feed with zero fine. It is also reported that the crumbled feed form 
mostly yields superior weight gain compared to mash (Zohair et al., 2012).  
The birds reach market weight faster under crumbled feed than under mash feed. In placing 
monetary value on the added benefits of crumbled feed use to broiler businesses as contribution to 
cost reduction, it will be of great importance as it could drive low cost production of broiler in the 
Ghanaian broiler industry if adopted gain (Neves et al., 2014).  
Considering crumbled feed for instance, many studies have again reported that it is possible to 
obtain significant contribution to improving productivity of broiler production, reduces waste, 
reduces cost at which unit broiler is produced and shorten the number of weeks it takes the birds 
to reach desirable market weight. Findings reported by (Gadzirayi et al., 2006) indicated that by 
using crumbled feed, it is possible to reduce waste by eighteen percent (18%) because of the 
7 
 
increased particle aggregation and also the drastically minimized selection of preferred ingredients 
by birds.  
A detailed assessment of the performance and cost reduction contribution of the crumbled feed in 
the production of broiler in Ghana has not been verified. The use of crumbled feed is widespread 
in countries where the broiler production is highly competitive, integrated and sustainable 
(Johnson & Kufoalor, 2017). Therefore, to ascertain the contribution of the crumbled feed to 
broiler production, a detailed assessment of the product’s performance to understand what and 
how it will reduce cost of production has to be carried out.  
1.3 Research Questions  
Ghana’s broiler industry faces serious challenges that require targeted long-lasting solutions 
through reduction of production cost so as to drive the competitiveness of broiler production. To 
assess thoroughly the full potential of the crumbled feed technology to reduce production cost, the 
following questions were posed by this study:  
1. What is the contribution of crumbled feed to reducing the cost of producing broiler meat 
for the Ghanaian domestic market?  
2. What is the variations in the total cost of production when the cost (the market price) of 
the crumbled feed receives shock?   
3. What is the cost competitiveness of broiler production based on the experiment conducted?  
1.4       Objectives of the Study 
The main objective of the study is to assess the contributions of crumbled feed to reducing cost of 
production and its economic viability to be recommended to broiler farmers in Ghana. 
8 
 
1.5 Specific Objectives  
The specific objectives that will contribute towards achievement of the overall goals are to:  
1. Conduct a field experiment and assess the effects of crumbled feed on the cost of 
production.  
2. Ascertain the variations in the total cost of production when the cost (the market price) of 
the crumbled feed receives shock.  
3. Analyse the competitiveness of broiler production based on the experiment conducted.  
1.6 Justification of the Study  
Evidence on how and what the crumbled feed technology is contributing to broiler production in 
terms of weight gain will help to understand the extent to which it is affecting profitability and the 
overall performance of broiler production. Economics of the technology determines its 
acceptability by farmers and at the same time, the economics are affected by performance. It is 
therefore important to establish through the performance and economics of an experiment, the 
contributions of the crumbled feed technology in terms of better Feed Conversion Ratio, reduced 
feed loss, shorter time within which birds reach market weight, and the monetary values of the 
additions the technology brings on board. Comprehensive, easy and ready to be applied 
information the technology will set the Ghanaian broiler industry on a sure different path to 
competitiveness. The number of weeks the farmers stand to save by virtue of using the crumbled 
feed technology to get bird ready for market is an immense contribution toward direct cost saving 
in term of feed usage which account approximately for 70% of the total cost of production. The 
projections of increasing total cost of production due to constant increase in the cost of feed is as 
a result of completion for maize and soybean between the poultry industry and domestic 
consumption primarily. It is therefore a powerful decision-making information needed by broiler 
9 
 
farm businesses to plan for the future and then put in place contingency plans that will save the 
farm businesses major loss in times of adversities.  
Analysis of the competitiveness of broiler production comparing crumbled to mash feed, will 
provides businesses with the vital information of how close they are getting to being competitive 
on the domestic market, and to policy makers, it highlights the importance of investing in 
researches and especially experiments to generate technologies and innovations to help the private 
sector drive economic growth and food and nutrition security.  
1.7 Organisation of the Study  
This thesis is divided into five chapters. They are organised in the following order; Chapter one 
which gives a preview of the entire study followed by Chapter two which presents the review of 
literature. This is made up of broiler production experiments, production cost and various 
techniques used in experimental evaluation. Chapter three outlines the methodology used for the 
study. This consist of information about the method of analysis, the conceptual framework, 
theoretical framework, the hypothesis test and empirical analysis for evaluating technologies and 
interventions. It also detailed information on the data used and about the study area. Chapter four 
presents the results and discussion of the study following each specific objective. It also gives 
summary statistics of input and output variables of the contribution of crumbled feed to broiler 
production and the economic analysis. Finally, the summary, conclusions and policy 
recommendations of the study makes up Chapter five.   
10 
 
CHAPTER TWO 
LITERATURE REVIEW 
2.1 Introduction 
This chapter focuses on the review of literature highlighting the various methodologies needed for 
cost estimation, return on investment analysis and the strategies for reducing cost of production.  
2.2 Poultry Industry and Trends  
Most of the broiler businesses and firms in the country are forced out of the market because of the 
fierce competition from the imported chicken meat (Tuffour & Sedegah, 2013). All farm 
households and rural families of most third world countries engage in livestock rearing as 
additional source of income supplementing their main livelihood (Anang et al., 2013).  
Ekunwe et al. (2006) pointed out that raising birds has taken on a crucial role in the business setting 
as a commercial activity cum tremendous prospects, however, this study is of the view that 
potential alone is not enough and will achieve nothing should things continue the way it is. The 
understanding is that in commercial activities, it is the final consumer that is satisfied to create 
value for the business and the value in the chain for the consumer must be the centre of the 
commercial activities. This includes how much the consumer is willing to pay for the commodity, 
at what cost, time and how can the business produce for this consumer to make profit, are there 
other businesses targeting the same customer, what are they doing, and others. 
Failure to answer these questions diligently has resulted in the Ghanaian poultry industry lagging 
and ceding its large market to import. According to (Anang et al., 2013) and (Assa, 2012), poultry 
meat production has taken the lead role globally in terms of meat production with developing 
countries driving its fast growth. The current situation of commercialised poultry in Ghana 
11 
 
according to (Kusi et al. 2015), has no future should things continue the way they are now, hence 
need for an urgent action leading to the design of new and inclusive models to transform the 
industry to unleash the full potential of the resources available to the development, growth and 
competitiveness of the industry. To address the acute shortage in animal protein supply in the 
country and jobs, it was identified by the government at the time, 1960s, that commercial poultry 
keeping was the utmost tool (FAO, 2014).  
The data and literature available on the poultry industry (the broiler industry specifically as the 
focus of this study) is highly limited. There are staggering contradictions which make it difficult 
to paint or give a clear picturesque description of the history of Ghana’s poultry industry and its 
evolvement. Discrepancies in the statistics on the industry’s performance, growth, and challenges 
makes it really hard to plan a progressive transformation of the industry from where the industry 
is now and what it is experiencing. In terms of statistics, the following contradiction is observed. 
Two different reports  showing an unbelievable difference in figures reported on the same industry 
in successive years; the percentage of the domestic production of poultry is able to meet out of the 
total domestic market’s  quantity of chicken meat demand presented by (ISSER, 2011), was 10% 
and (MoFA, 2010), was 30%. The following are two different sets of views and statistics of the 
Ghanaian poultry industry. 
The observations made by (MoFA, 2010) showed that from 2000 to 2009, chicken accounted for 
58% of the total meat import into Ghana. The increasing income level and food production deficit 
have induced an exponential increase in demand for poultry and poultry products. This surge in 
demand has led to flooding of the domestic market with imported poultry products (Egyir & Adu–
Nyarko, 2012). The import of poultry and poultry products into the country poses a serious threat 
to the local poultry industry, even its collapse. Adding to the escalating cost of labour, feed, day 
12 
 
old chicks and other variable inputs (Koney, 1993; Aning, 2006)  are the losses due to many other 
factors. These are lack of innovative ways of feed use and institutional arrangement to assist broiler 
farms in accessing consistently readily available veterinary care for their birds within the shortest 
possible distance and market to drastically reduce cost of raising birds.  
In 2010 a year in which the livestock industry grew by 5.1%, the poultry subsector declined as 
much as 12.8%. In the same year, the domestic poultry production could only meet 10% of the 
total domestic demand (ISSER, 2011). There is however a contradiction in the statistic of the 
percentage the domestic production of poultry is able to meet out of the total market demanded 
locally presented by (ISSER, 2011), 10% and (MoFA, 2010), 30%.  
There are many indicators pointing to the fact that the broiler business is dying however, the 
increasing demand for the poultry and poultry products is interpreted as an opportunity for the 
commercial broiler business (Kwadzo et al., 2013). The question to be asked is, how can the 
domestic broiler industry take full advantage and control of the available and growing demand for 
poultry meat?  
The domestic broiler industry has a potentially large market available for growth and expansion, 
but access to this market is constrained by high cost of production (feed, drugs and high energy 
prices) and mortality rates due to wrong feeding practices, ignorance of management needs and 
poor distribution of vaccines; therefore militates against broiler production (Koney, 1993). 
However, in recent years, poultry farmers have started to receive some form of training to upgrade 
their capacity in raising birds and it is also clear that a lot remain to be done should the poultry 
industry in Ghana make significant contributions to the economic growth of the country 
(Anandajayasekeram et al., 2004).  
13 
 
Domestic poultry production is not able to meet the domestic demand. Production is characterised 
by extremely high cost of feed. Greater Accra is the only region that has an office where poultry 
farmers all over Ghana visit to be able to consult a veterinary doctor for prescription and advices 
for their birds. Transportation cost due to the lack of this institution’s physical presence in the 
interior regions of the country where poultry production is being undertaken is worsening the 
plight of the farms in the broiler industry.  
The increase in demand for poultry and poultry products was as a result of so much interest 
attached to its production and consumption (Colecraft et al., 2007). Relatively, poultry production 
has a shorter gestation period compared to other livestock such as goats, sheep, and cattle (Obi & 
Sonaiya, 1995).  
The population and housing census of 2010 reveals that 14,000000 birds are raised in the country 
as against 14,600000 recorded in the year 1996 showing a drastic reduction in bird population of 
more than half a million birds. This decline has serious negative effects on the maize and soybean 
sectors for these two sectors are directly linked to the poultry industry (SEND-Ghana, 2008).  
Poultry and poultry products are actually a relatively cheaper packed source of protein (Kwadzo 
et al., 2013), resulting in the consumption of poultry and poultry products becoming continually 
significant in Africa (Shane, 2006; Killebrew & Plotnick, 2010). The countries known on the 
continent with respect to the consumption of poultry are South Africa, Morocco, Egypt and Nigeria 
(Food and Agricultural Organization Statistics (FAOSTAT, 2006). Yet production volumes 
remain very low in Africa (Watt, 2010). Ghana’s domestic consumption of chicken saw an 
exponential surge in that consumption has been multiplied by almost a factor of four (400%). This 
explains the report of the Ministry of Food and Agriculture (MoFA, 2010) that the country  has 
14 
 
experienced a remarkable increase in demand for poultry and poultry products from the year 2000 
to the year 2009. The account of Ghana’s poultry industry is really a sad one (Khor, 2006).  
Secondly from a publication by (FAO 2014), as indicated by (Kusi et al., 2015) stated that in 
1960s, to address the acute shortage in animal protein supply in the country and jobs, it was 
identified by the government at the time, that commercial poultry keeping has got the utmost tool 
to be used as a strategy hence a cohesive poultry project was established.  
During the period of 1980 to 1990, the Ghanaian poultry industry experienced a galloping growth 
resulting in the country’s agriculture sector becoming a lively one, supplying 95% of the local 
demand for broiler meat and eggs. There has been overall rise in livestock production since 2000. 
This rise in production is however due largely to the incredible growth experienced by the southern 
compartment of the poultry sector (FAO, 2014). (Atuahene et al., 2010) reported that the Ghanaian 
poultry industry continue to make significant contribution to GDP in the form of impacts in the 
agriculture sector of the Ghanaian economy.  
 This therefore calls for actionable policies from both private and public sectors that will drive the 
rebuilding of the industry from scratch with an all-inclusive approach focusing on the final 
consumer to creating values for the satisfaction of his needs.  
The growing demand for poultry and poultry products is yet to receive a matching response with 
an increase in local production. The situation is not looking good for the local industry since it is 
rather suffering from a recurrent and substantial decline in growth (Aning, 2006; Khor, 2006; Flake 
& Ashitey, 2008). 
(Tuffour & Sedegah 2013), noted that the foremost issues confronting the broiler industry are 
marketing constraints and risks, besides fiscal and production limitations. These threatening 
15 
 
factors working against the development of the poultry sector includes extreme competition from 
imported chicken, increased cost of input resulting in high cost of production, pest and diseases 
attacks, inter alia (Aning, 2006; Killebrew & Plotnick, 2010; Kwadzo et al., 2013, Tuffour & 
Sedegah, 2013). The study is however taking a position different from that of the above reference 
stated. The heavy importation the country Ghana is experiencing is rather as a result of the poultry 
industry’s failure to be abreast of the global industrial trends in innovation, technologies, human 
resource, and disease control, research and development, marketing, to operate efficiently at the 
minimum cost level to establish an evolving unbeatable competitive advantage.  
Production is the process of converting inputs into outputs as value for recovering costs and 
making profit as the prime objective of every business. Understanding of the business’ model, 
making provision for the infrastructure and the key activities to be carried out to create values 
inform cost structure of the business. There are many cost classifications such as fixed cost, 
variable cost, direct cost, indirect cost. For the purpose of this study, fixed and variable cost will 
be used. In analysing the effects of changes in technologies, innovation adoption, inputs 
substitutions, Partial Budgeting Analysis is the best method so far developed. Changes effected 
the initial budget of a business results in four effects which are increase in income, reduction in 
cost, reduction in income and increase in cost ( Lessley et al., 1991).  
The 2012 meat production projections were pegged at two percent to expand to 302 million metric 
tons according to FAO of the United Nations. The envisaged development will be compelled by 
two sectors, the pork and poultry production, which in history for the first time exceeded 100 
million metric tons, documented a value of 101.6 million metric tons in 2011 as rendered by FAO 
figures. Feed prices is one of the two factors on which the meat market is going to heavily depend 
from the year 2012. Global food price is one of the factors driving the feed price increase. The 
16 
 
bigger crunch of this growth will come from developing countries, specifically Asian countries 
(Watt Executive Guide, 2012). This clearly mean that Ghana is excluded. Domestic production is 
not able to meet the domestic demand. Production is characterised by extreme high cost of feed. 
How then can the local poultry industry drastically reduce cost of production to encourage 
expanding the industry for economic growth? Transportation cost due to the lack centres and 
institutions in the interior regions of the country (where poultry production is being undertaken) 
where farmers can seek the experts’ advices is worsening the plight of the farms in the broiler 
industry.  
Many researches have been undertaken in this regard. However, there is still a lot to be done. One 
of those things which could be done is the adoption of innovative ideas such as feeding birds with 
crumbled or pelleted feeds instead of the mushed one to reduce feed wastage which amount to 
additional cost with no return, but has proven to be better option to raising broiler anywhere in the 
world due to the performance birds put up when with crumbled or pelleted feed. Birds reach market 
weight within a shorter period of time, as a result of a much better rate of weight gain (Neves et 
al., 2014).  
2.3 Broiler Production  
The undertaking of broiler production strictly requires the consideration of the following principles 
though not limited to them alone, “Arbor Acres Broiler Management Guide,” 2009, has it as One, 
the practical understanding of factors of the production chain is heavily dependent on and the 
changeover stages between them. Two, the requirement of observation of changes that are taking 
place in the birds is critical. Same consideration must be given to the environment in which the 
birds are kept. Three, critical attention must be given to the quality of what the final product is 
going to be; from the beginning to the end of the production process. Four, the response to the 
17 
 
appropriate and continual needs of birds as they grow; (the requirements of birds change 
progressively as time passes), is another duty on management.  
It is fundamental the broiler farm manager understands the needs of the broiler birds by means of 
applying the responsive management to supply the specific flocks with their individual needs to 
seal the optimal performance of the birds. The diagram below therefore gives us a pictorial 
description of the broiler industry.  
Poultry (broiler) production is a closed cycle comprising of many component playing active roles 
which made the broiler industry a dynamic one. The major components of the cycle are the 
hatcheries industry, the feed mill industry, the transportation industry, the processing industry, the 
retail industry and broiler production industry itself is in the middle linking them all together. The 
hatcheries operate on the parent stock. Their objective is to produce high quality, fertile eggs to be 
hatched as high-quality chicks to be raised by the broiler producers. Feed mill industry is that 
component with large operations. It flourishes on the back of a successful crop sector (maize and 
soybean sub-sectors). Its objective is to supply the hatcheries and broiler producers with high 
quality feeds. The transportation industry plays an important role as well, facilitating the 
movement of goods and services among the players of the of the bigger system. The processing 
industry collects the live birds from producers, process and relay the processed meat to the retail  
 
 
 
 
 
 
18 
 
Figure 2. 1 The Process of Producing Quality Broiler Meat  
 
Feed mills   Location  Operation Objective  
 
Parent stock 
 To produce high quality, fertile Parent management  eggs  
 stock  Egg 
 E gg storage  
 Transport  
 
 Egg hatchery  
 
Hatchery  Incubation  
 
 To produce high quality 
Hatching  chicks 
 
To maintain chick quality  
 Transport  
 
Broiler Brooding  To develop good feeding behavior  Disinfection  
farm 
To develop immune function 
s  
To allow optimum development of  
Growth 
 skeleton and cardiovascular 
management  system 
 To optimize carcass quality Cleanout  
Depletion  To maximize bird welfare 
 
 Transport  
Pro cessing plant  Processing  
 Retail  
 
 
Source: adapted from “Arbor Acres Broiler Management Guide,” 2009.  
 
19 
 
industry to transact with the consumers. The producers of the broiler are the centre unit which raise 
the day-old-chicks produced by the hatcheries using the feed from the feed mill industry, the 
processing unit to process for the market.  
2.4 Inputs Use in Broiler Production  
Broiler production is characterized by use two main inputs use, fixed and variable inputs. (Among 
the total cost of production which include fixed cost (housing, feeding and drinking troughs, water 
reservoirs, wellington boots, equipment, permanent labour, etc.), variable cost (feed, drugs, 
veterinary services charges, electricity etc.) feed cost is very high.  
Provision of quality inputs such as chicks, feed and medication aids the poultry farmers in quality 
chicken production. Inputs involved in the production of poultry can be realised from numerous 
perspectives. These could be either external (Non-Factor costs) or internal (Factor costs). The latter 
entails the control of the farming household, and that takes account of capital, labour, land and 
management. Either Cash (Paid) Costs or Non-Cash (Calculated) Costs marks the cash involved 
in production. A different way to group the inputs is to differentiate Variable inputs from Fixed 
inputs. Variable costs fluctuate with the level of operation and the size of the output. Variable 
inputs take into account items mainly feed, vaccination and casual labour. Cost of these could be 
reduced to a certain degree and not incurred in the absence of production. Variable costs mainly 
consist of day old chicks and feed, which accounts for a higher percentage. Labor cost accounts 
for mostly the least of the though not at all times but varies in contract and non-contract/ 
independent broiler farming (Kalamkar, 2012).  
Fixed inputs on the other hand accounts for items like taxes, insurance, interest, and depreciation 
on structures and equipment, its cost is incurred in the presence or absence of output.  
20 
 
 
2.5 Types of Feed Used in Broiler Production 
There are various forms of feed, which are pellet, mash and crumble. These are the known feed 
forms that are fed to broilers. The forms in which these rations come are the factors which critically 
and directly dictate how much it will cost to mix them and the performance the birds when the 
feeds are fed to them.  
Successful broiler growth is reliant on optimal feed consumption all through the growth period. A 
number of factors such as environmental temperature, and diet nutrient density, and physical feed 
quality is considered to have a very significant impact on broiler growth.  
In order to ensure maximum utilization of the diet consisting of energy, protein, and every nutrient, 
an accurate amount of these necessary nutrients is required for optimal growth of the fowls and for 
reduction of wastes which increases cost of production. The physical form in which feed comes 
be it mash or pelleted feed is a vital feature in meat yield of broiler.  
Feed mainly used in broiler production worldwide is mostly mash or pelleted. Mash feed is 
basically a type of a whole feed that is finely powdered and mixed so that ingredients are not 
separable by birds; every single gulp offers a balanced diet. Pellet feed on the other hand is really 
an improvement of the mash system. It basically involves mechanically pressing the mash into 
hard dry pellets or “artificial grains” of different grain sizes. It is mostly accepted that, in 
comparison to mash, pellet feed improves broiler. Good pellet quality is well-defined as the ability 
to bear up mechanical handling (bagging, transport etc.) devoid of separating or disintegrating, 
and to get to feeders devoid of producing a great quantity of fines. Pellet feed is made up of 
21 
 
complete feed which is compressed and extruded to about 1/8 inch in diameter and 1/4 inch long 
(Zakeri et al., 2013).  
Another type of feed is the crumble feed, basically made at the mill by pelleting of the mixed 
constituents and then crushing the pellet to a consistency rougher or less fine compared to the mash 
feed. In recent times, this type of feed has become common in poultry production owing to its ease 
of feeding (Jafarnejad et al., 2010).  
It is a generally conventional principle in poultry nutrition that dietary energy and the essential 
nutrients must be measured as an entity. Mash diet according to (Jafarnejad et al., 2010). 
contributes higher results of growth and less mortality hence is more cost-effective. Conversely, 
milled or ground feed is not so palatable and does not reserve its nutritive value so well as 
ungrounded feed. With regards to mash feed, (Amerah et al., 2007) available information suggests 
that medium and coarse grindings are expedient to advance the performance of broilers fed mash 
diets and that these favorable effects are greater in diets of enhanced particle uniformity. 
Pelleting feed is documented to improve weight gain, feed consumption and feed efficiency in 
broilers regardless of the source of grain. These improvements (Amerah et al., 2007) have been 
attributed among other things, to higher density, improved starch digestibility resultant from 
chemical variations during pelleting, increased nutrient intake, changes in physical form, reduced 
feed wastage and reduced energy spent for eating. On the other hand, disadvantages related with 
pelleting feeds take account of the upsurge in the cost of the feed owing to the pelleting and also 
the process may reduce the availability of some essential amino acids such as lysine and destroy 
certain vitamins (Fasuyi & Arire, 2015)  
22 
 
Broilers that were fed fine particle wheat mash had lesser weight gains and feed consumption 
compared to those fed with pelleted diets as observed by (Amerah et al., 2007.) It was also noted 
that the digestive tract of birds that were fed the powdered or fine particle mash diet turned out to 
be severely impacted, which is believed to may have been brought about by highly viscous digesta 
from finely ground wheat. Birds fed fine mash diets have been reported to have high digesta 
viscosity in comparison to those fed medium or coarse wheat diets. 
The greatest advantage associated with using pellet feed is that it minimizes waste in feeding. The 
drawback involved is that pelleting is costly; about ten percent (10%) costlier compared to feeds 
not pelleted. (Zakeri et al., 2013) stated that pellets had better-feed efficiency up to six-week age 
of birds and also noted that pelleting feed affected the body weight gain of the birds positively. It 
was also noted that feed intake of broilers could reach up to 10 per cent greater with crumble or 
pellets in comparison with mash (Zakeri et al., 2013).  
After the attainment of adequate gizzard development, development in performance with regards 
to the feeding of coarser, more uniform particles may be partly explained by the lower energy input 
required by birds when they ingest coarser particles. The number of pecks to consume a given 
amount of feed becomes reduced when particle size increases.  
2.5.1 Mash Feed  
The mash feed form is that which is ground, fine with all the needed ingredient in place and in 
their right proportions making it balanced for optimum growth of the broiler under production. 
Ingredients are not easily separated into its components but are not bound together into bigger 
particles. Fine particle feed is however not tasty, retain very less the nutritive values of the feed 
(Zohair et al., 2012).  
23 
 
2.5.2 Crumbled Feed   
Crumbles which can be termed as artificial grains but have the same nutritional value as the mash 
feed form (Zohair et al., 2012). The main drivers of the profitability of commercial broiler farms 
are feed related costs. It is really underpinned by an excellent nutrition for exponential growth rate 
(Neves & Neves, 2014). Though feedstuff is of important high economic aspect of rearing broiler 
for commercial purposes and primarily responsible for birds’ growth response, the major point of 
concern is it constitute the largest cost component in the production poultry (Albino et.al., 2012).  
The suggestion that broiler chicken associate with feeds’ physical characteristics was based on the 
observation that birds have not lost their natural capability to discriminate among different feed 
diets regardless of the high-level selection to arrive at fast-growing birds for domestication. Birds 
possess the ability to pick diverse sizes of feed particles even in the initial stages of life. The size 
and type of food the birds are likely to consume is determined by the setup and structure of beak 
and also the granulometry of the particle (Neves et al., 2014).   
Findings reported by (Gadzirayi et al., 2006) indicated that by using pelleted feed, which is not 
too far from the crumbled feed used in this experiment, it is possible to reduce waste by eighteen 
percent (18%) because of the increased particle aggregation and also the drastically minimized 
selection of preferred ingredients by birds. Crumbled feed significantly help in the development 
of the digestive tract, reduces time spent on feeding. By this, birds get enough resting time thereby 
using little energy to for maintenance and increasing energy available to for growth (Neves  & 
Neves, 2014). Moreover, time expended during feeding is dependent on the granulometry of the 
feed (Yo et al., 1997).  
According to (Briggs et al., 1999) pellet quality is the ability of a pellet to continue unbroken all 
through handling, supported by (Angulo et al., 1996) who threw light on the fact that the quality 
24 
 
is inversely proportional to the feed particle size; meaning, the smaller the particle size, the bigger 
the surface for absorbing dampness from steam, resulting in a better lubrication mixture and thus, 
an improved pellet quality. The quality of the pellets may be the subject of strong contention 
among researchers, and feed manufacturers because of how they affect animal performance and in 
the process, the cost-benefit ratio in feed processing. When the percentage of fines in the feed is 
high, it annuls the benefits of the pelleted or crumbled feed. This shoot the cost of production and 
making the process impracticable for the industry, since the benefits be enjoyed from the process 
practically vanishes in comparison to the mash feed (McKinney & Teeter, 2004).  
The use of high-quality pellets results in higher body weight (Lilly et al., 2011), shoot up broiler 
growth by twenty five percent and feed consumption was improved on the average, in comparison 
to low quality and mash diet rich in proteins (McKinney & Teeter, 2004). The interesting thing 
about the performance of mash and pelleted feed is that there is no difference in the weight gain 
by birds under the two different feeding regimes should the pellet quality be poor but with a higher 
feed consumption under the mash feed regime. Mash diets point toward a higher feed intake with 
a similar weight gain to low-quality pellets, signifying, in this sense, a better digestibility of low-
quality pelleted than mash diet (Lemme et al., 2006). 
2.6 Partial Budgeting:  
According to (Wander, 2016), anticipated changes to be implemented on a farm affect a business 
in part. So therefore, proposed adjustment in the business resulting in changes in income and cost 
is better captured by partial budgeting techniques. Partial budget is the suitable technique for 
analysing practical farm management problems like the substitution of one input to another say 
crop for livestock as crumble feed to mash feed in broiler production business, altering input levels 
or the type’s inputs, altering size of enterprises. Partial budget is a technique and a tool at the same 
25 
 
time best suited to small changes that we undertake in the business. The partial budget shows 
whether the changes will increase, decrease or have no effect on net income of the business. The 
partial budget has four clear-cut parts divided into two sections; left side, comprising of the added 
gain and saved costs and, the right-hand side comprising of the reduced income and additional cost 
(Lessley, 1991).  
2.6.1 Reduced Cost  
Substituting crumbled for mash feed in the proposed change to be implemented, the expenses 
associated with dropping the mash feed are the reduced costs. saved costs are either variable or 
fixed. Should the need for drugs, labour, the quantity of feed and mortality of Day Old Chicks 
reduce because we no longer use mash feed, we have reduced cost associated with mash feed. In 
case where investment in fixed assets such as some type of feeders are discontinued due to 
substituting crumbled for mash feed, we are then able to reduce the appropriate fixed costs of 
depreciation. However, profitable use must be found for those fixe cost items, and interest charges 
on average value and some repairs.  
There are some cases in which the costs for infrastructures, fences (farm structures) and other fixed 
items cannot be reduced, because the business is trapped with them. This can be true of labour 
should the change require less labour, but the supply is fixed with the business owner and full-time 
salaried held. If labour time is shortened and there is a useful use for this labour, we would take 
note of the labour value as an extra income.  
 
 
 
 
26 
 
Table 2 1: Structure of Partial Budget  
Additional income  Value  Reduced income  Value  
Birds sold under pellet feed   Birds sold under mash feed   
Difference in weight gained  Difference in weight gained  
(positive) (negative) 
Alternative use found for  Revenue loss due to saved  
saved labour  labour without alternative 
use  
Alternative use found for  Revenue loss due to saved  
saved inputs  inputs without alternative 
use 
Alternative use found for  Revenue loss due to saved  
saved fixed input(s)  fixed input(s) without 
alternative use 
Sum of the additional income  Sum of the reduced income 
∑ 𝒀𝒂𝒅𝒅. ∑ 𝒀𝒓𝒆𝒅 
Reduced costs   Additional costs   
Mash feed   Pellet or crumbled feed   
Reduced labour use   Additional labour   
Reduced inputs use   Additional inputs   
Fixed inputs not needed to  Additional fixed input  
execute changes  required  
Reduced number of days    
required to market weight  
Sum of the reduced costs  Sum of the additional costs  
∑ 𝑪𝒓𝒆𝒅.   ∑ 𝑪𝒂𝒅𝒅. 
= 𝑵𝒆𝒕 𝒊𝒏𝒄𝒐𝒎𝒆 𝒇𝒓𝒐𝒎 𝒄𝒓𝒖𝒎𝒃𝒍𝒆𝒅 𝒇𝒆𝒆𝒅 = (∑ 𝒀𝒂𝒅𝒅. +  ∑ 𝑪𝒓𝒆𝒅.) − (∑ 𝒀𝒓𝒆𝒅 +  ∑ 𝑪𝒂𝒅𝒅.)   
 
Source: Adapted from (Lessley, 1991)  
 
27 
 
2.6.2 Reduced Income  
A projected change in the farm business operation may likely reduce our farm income because of 
alterations in production practices that is, enterprises being removed, reduction in size or output. 
For instance, discontinuing the use of mash feed to produce the birds means forgoing the revenue 
generated through the use of the mash feed for raising the birds (Soha, 2014).  
2.6.3 Additional Cost  
Partial budget takes account of any new costs related with a proposed change. The substitution of 
crumbled feed for mash. These costs can be fixed of variable. The substitution of crumbled feed 
for mash means under additional costs we must take account of variable cost items such as 
crumbled feed cost, nutritionist advisory services, medicine, vitamins and transportation.  
2.6.4 Additional Income  
A projected change to be implemented in a farm business may bring additional income from the 
enterprise being added, the increase in the size of an enterprise or an input being substituted for 
another. For instance, income generated from raising broilers with crumble feed is the additional 
gain. That is when the birds raised with crumble feed attain heavier weight within the same period 
of production or less. The income resulting from the extra weight of birds is the additional income. 
Or, when the birds raised with crumble feed attain heavier weight (market weight) within a shorter 
period of time, the savings on feed cost, labour cost, drugs cost, veterinary services, are added to 
the reduced costs (Lessley, 1991).  
2.7 Comparison of Broiler Performance Under Mash, Pellet and Crumbled feed  
In a study by (Fasuyi & Arire, 2015) performance characteristics of broiler chicks fed mash 2mm 
pellet and crumble diet, the feed intake value obtained for birds on mash diet had the highest value 
28 
 
and was significantly different from the lowest value obtained from birds that fed 2mm pellet diet. 
It was recorded that the highest weight gain value was recorded for birds placed on pellets although 
similar to those on crumbles. They also recorded that the least and optimum feed conversion ratio 
was obtained for birds placed on pellets and this was significantly different from those placed on 
mash and crumbles. Generally, growth performance results from the above stated study showed 
that optimal performances were achieved in pelleted diets. 
This study was also consistent with another study conducted where weight gain was significantly 
greater in broilers fed crumble-pellet diets than mash diets when assessed over a trial period. Birds 
fed on crumble feed had the highest weight gain and the best FCR. The results were in accordance 
with those of (Pirzado et al., 2015) who based on their findings had this outcome. The broilers 
provided crumble feeding consumed more feed than that of birds provided mash. It was also stated 
that the overall feed intake of broilers fed crumble was higher than the broilers with mash feeding 
and the body weight of broilers with crumble feeding was observed higher from 2nd to 6th week 
than that of broilers with mash feeding. The overall live body weight was recorded significantly 
more in broilers with crumble feeding than the broilers with mash. The trend of weight gain (%) 
was also remained risen from 2nd to 6th week for the group of broilers fed crumbles in comparison 
of broilers with mash feeding. The overall Feed Convention Ratio was recoded to be comparatively 
better in broilers with crumble feeding than broilers with mash.  
In accordance with most other authors results, the feeding of pellets, compared to mash, improved 
broiler growth rate and increases weight gain, which is associated with an increased feed intake 
and improved feed conversion efficiency (Jahan et al., 2006).  
It is obvious that birds on the pellet diets have the highest and most profitable commercial value 
as the total net return is most favourable for commercial broiler starter production. 
29 
 
2.8  Reasons for Complementary Analysis 
The study’s experiment conducted was basically for the purpose of assessing the biological gain 
the crumbled feed technology is contributing to the broiler production; and then complement 
provide economic interpretation to the biological gain achieved.   
Most of the experiment conducted specifically on the influence of crumbled feed on broiler 
production performance is limited to the biological gain by the testing of significance differences 
among the mean values of the parameters of interest measured. The purpose of the biological and 
the statistical tests were less sufficient to recommend a technology to farmers for use. When a 
technology is evaluated based only on the statistical tests, potential technologies and innovations 
will be rejected and many were rejected in the pass. Taking a maize variety X for instance, which 
has been evaluated and the mean yields were significantly different between X and Y the current 
variety being used by the farmers (Anandajayasekeram et al., 2004).  
Anandajayasekeram et al., 2004 used the analogy similar to the following. Upon recommendation, 
farmers started growing X instead of Y. After harvest, the farmers realized that they can only keep 
this new variety for only four months, however, they use to keep Y for even more than a year. 
Apart from the shelf-life, another problem could be that when X is taken to the market, it has got 
very low patronage by consumers. Due to these challenges, economic analysis comes to answer 
the “and so what” question. My yield was increased and so what? Do I have market for these new 
variety of maize? What market price is there for this new variety of maize I am growing? Is my 
environment favourable for the expected outcome to be achieved? Are there associated costs that 
will swallow back the gains made?  
Failure to answer these questions properly and complement the biological tests with it, viable and 
helpful technologies and innovations will continue to be rejected. For instance, if a technology’s 
30 
 
contribution is saving cost of operations, adding value, improving quality of the harvest, etc. … it 
will be difficult to capture it with the test of significant differences. However, technologies making 
the contributions mentioned above are actually preferable to farm businesses depending on their 
objectives (Anandajayasekeram et al., 2004).  
In experiments conducted by (Pirzado et al., 2015); (Fasuyi & Arire, 2015) and (Jahan et al., 2006) 
the focus was on the parameters that measured the biological gain. These parameters were then 
tested for the significant differences between their means. No further analysis was conducted. This 
approach lacks the engine to drive recommendations when situated in a system framework 
(Anandajayasekeram et al., 2004) for the following reasons. For an industry like that of broiler, 
the relevance of a technology to its players must have significant market orientation, must have 
strong bearing on the core goals of its target and their manner of resource utilization. Also, 
agronomic information only displays the practical relationships deployed to estimating the 
practical best and is always better than the economic finest. It is just a step in the process of 
evaluation. Going further, decisions choices of farm businesses are made progressively and actions 
required to implement them with the support of scarce resources to attain goals 
(Anandajayasekeram et al., 2004).  
The approach of this study to combine statistical and economic analysis was in a way influenced 
by the work of (Anandajayasekeram et al., 2004) to be able to give recommendations about the 
technology in a system framework. (Anandajayasekeram et al., 2004) showed that it is imperative 
to follow statistical analysis up with relevant economic analysis for the worth of the biophysical 
experiments’ results to be greatly boosted.  
 
31 
 
CHAPTER THREE  
METHODOLOGY 
3.1 Introduction  
This chapter presents the details of the method of analysis used assess the contributions of 
crumbled feed technology to cost reduction. It covers the conceptual framework, theoretical 
framework, empirical analysis for estimating price competitiveness and the net effect of 
substituting one input for another by the partial budgeting technique. The experimental design and 
data gathering process are also outlined.  
3.2 Conceptual Framework  
The conceptual framework of the study is showing how the two forms of feed for broiler 
production are influencing the total cost of production. It reduces total cost of production directly 
and indirectly. The flowchart (Figure 3.1) illustrates the performance of the crumbled feed 
technology against the mash feed showing explicitly the resulting outputs on broiler production 
cost, feed conversion ratio, weight gained and number of weeks it took to grow the birds to market 
weight. The environment contains most of the factors that affect the broiler industry. The major 
ones are feed (sustainable crop sector and a vibrant feed mills industry), institutions, Cost of day-
old-chicks, utility charges and housing costs. Cost is the major factor that is influencing production 
of broiler in Ghana and this is as a result of the high cost of feed. The feeds get to the broiler 
farmers from feed mills that were fed by the maize and soybean sub-sectors. The other inputs 
combine with feed in the production process to generate the desired output (broiler) at a lower cost 
using the crumbled feed. This low cost of production is the start of the journey toward 
competitiveness.  
32 
 
Figure 3. 1 Flowchart Showing the Conceptual Framework  
COMPETITIVENESS LOW COST OF 
 Production cost of 
PRODUCTION   
a Kg: GHS 8.159 
 
Pro duction cost of 
a Kg: GHS 9.334  
  FCR: 1.75  
INPUTS  
FCR: 2.06 DOCs  Housing  
 Labour  
Drugs  Average weight: 
 
Veterinary service  2.312Kg  
Equipment and 
materials  
Aver age weight:  
1.968Kg  
 Birds are ready for  
market in 6 weeks  
 
Birds are ready for 
market in 8 weeks  
 
 Crumbled Feed 
Environment  
- Natural resources: land, water, sunshine,  
M ashed feed  
- Technologies, innovations, ICT,  
- Institutions and ministries,  
- Finance,  
 
- Technical know-how,  
- Market, domestic and international trade,  
 
Source: Author’s Own Construct  
The inputs including day-old-chick, Housing, Labour, Drugs, Veterinary service, Equipment and 
materials are supporting the feed in the production process to yield the desired output.  
33 
 
3.3 Experimental Design:   
The experiment was a farmer managed experiment, conducted from 25th April to 6th June of 2017 
in Oyarifa in the Greater Accra region of Ghana. The motive behind carrying out the experiment 
on the farm of the farmer was so that every activity undertaken was done within the capacity of 
the farmer and that the recommendations are actually practicable and geared towards strengthening 
the broiler industry in Ghana. This will enable the farmer to appreciate the information given him 
or her that is based on results from the experiment carried out.  
This was a two-factor experiment involving mash and crumbled feed and was completely 
randomized. A total of 294 birds (broiler day old chicks) were reared from day old to a target 
market weight of 2.5 kg over six weeks. All necessary and recommended broiler production 
practices were observed in practice on the farm as on a typical commercial broiler farm. The two 
hundred and ninety-four birds were divided into two groups A and B, being the control and 
treatment respectively. Group A birds were fed with the mash feed for the growing period, whilst 
group B birds were fed with crumbled feed. Conditions (same geographical location, water, time 
of feeding, biosecurity measures, management practices, vaccinations, etc.) of production were the 
same for groups A (control) and B (treatment). The only difference was the feed forms.  
The nutritional values of the two forms of the feed were the same for consistent and non-
discriminatory results. This was achieved through the following process. The formulated feed was 
dived into two, one was bagged as mash and the other was pelleted, then crumbled and was also 
bagged appropriately. The feeds used for the experiment were supplied by AGRICARE LIMITED. 
Laboratory analysis of the two forms of feed were carried out by three different laboratories and 
the results showed that the nutritional values of the feed forms were the same. Brooding was done 
for ten days. The brooding period is one of the key production management phases during which 
34 
 
the young birds need extra attention and care for survival. The birds were given glucose for the 
first two days of their lives and were provided with heat to keep them warm. The birds were put 
under two phase feeding regimes, the starter and the finisher. Ad libitum feeding programme was 
adopted. This is the process where feed was made available at all times with the quantity and 
frequency of consumption being the free choice of the animal, without restrain. Broiler 
performance was recorded for six weeks through well-designed data collection sheets to gather 
extensively varied data regarding the performance of the birds for better understanding of the 
influences of the factor (crumbled feed) under evaluation for its contribution to cost reduction in 
broiler production. The performance measurements were in terms of daily feed consumption, 
weekly live weight, drugs administered and mortality. Every dead bird was taken to the laboratory 
for analysis to determine the cause of death. Drinker troughs were washed every morning before 
water was given to the birds. Feeders were also cleaned every morning before providing birds with 
feed. The pens were cleaned every morning and dead birds were not kept on the farm. The 
environment and the surroundings of the farm were kept clean. There were three-foot baths on the 
farm for biosecurity purposes, one of which was put at the entrance of the pen where the 
experiment was carried out. These were all done to ensure optimum hygienic conditions for the 
birds. Vitamins and drugs were administered to the birds following the recommended practices. 
We had daily tally cards nailed to the post of each pen to keep record of every activity carried out 
as well as all the occurrences in each pen.  
The performance indicators included feed conversion ratio (FCR), weekly body weight and the 
final live weight of the birds. The average live weight of birds under both groups, weekly feed and 
water intake were consolidated from the daily consumption of the birds. In addition, weekly feed 
waste in both the control and treatment groups were measured. Quantity of feed given to the birds 
35 
 
everyday was weighed and values recorded per pen. The final average feed quantity consumed by 
each bird in each group was determined. The number of man-days utilised was accounted for. All 
these parameters measured were converted into monetary terms for costs and return estimations in 
addition to parameters which are already measurement in monetary terms, such as medication cost 
and veterinary service charges.  
The average weights of the birds were measured weekly as follows: Empty weighing baskets were 
weighed first. All the birds were then put in the weighing basket then put on the weighing scale 
and readings recorded. The reading was divided by the number of birds in the replication alive at 
the time of weighing to find the average weight for the replication. This was repeated for all the 
replications for the six weeks of the experiment.  
These parameters were same for both control and the treatment group.  
1. Feeding system  
2. Watering system  
3. Heat 
4. Time of feeding  
5. Number of time feeding is done  
6. Medication  
7. Veterinary services  
8. Labour hours  
9. Heat   
 
36 
 
The control group’s specific parameter was mash feed and the treatment group’s specific parameter 
was crumbled feed.  
The measurement parameters the experiment focused on were the following:  
Labour was measured by recording the log in and log out time of the farm hands. The monetary 
values of inputs were then summed up to determine the total cost of production. The same labour 
was used for the two treatments.  
It must however be noted that the feed formulation and ingredient in the feeds for the mash and 
crumbled feed are the same. The feed is packaged in 50Kg bags each.  
3.4 Method of Analysis    
The study adopted descriptive statistics in the form of means and standard deviations, to describe 
the outcomes of the experiment under the control and the treatment groups. T-test will be carried 
out to test for the significance of the mean values obtained from the experiment. The t-tests will 
be conducted at 0.1 level of confidence. The results of the t-tests will inform the next steps of the 
analysis, which analysis to be carried out should the mean differences of the controlled and the 
treatment groups are not significantly different. Statistical Package for Social Sciences (SPSS) and 
Microsoft excel software were used to analyse the data collected. Sensitivity analysis was also 
carried out to test for the variation that are likely to occur in the total cost of production when the 
prices of the crumbled feed vary and how it affects return on investment.  
3.4.1 Effects of Crumbled Feed on Broiler Production Indicators   
To assess the effects of the proposed technology on broiler production, the outcomes of the 
experiment were presented by means, percentages and also in the form of graphs. The t-test was 
carried out to establish whether there are significant differences between the means of the 
37 
 
controlled and treatment groups of the various parameters measured. The following hypotheses 
were formulated and tested to determine whether there were significant differences between the 
means:  
i. H0: There is no difference in the mean weekly body weight of the control and the 
treatment groups.  
H1: The mean weekly body weight of the control groups is lower than that of the 
treatment group.  
ii. H0: There is no difference in the mean weekly feed consumption of the control and the 
treatment groups.  
H1: The mean weekly feed consumption of the control groups is lower than that of the 
treatment group.  
H0: The mean weekly bird mortality of the control and the treatment groups are not 
different.  
H1: The mean weekly bird mortality of the control groups is higher than that of the 
treatment group.  
H0: The mean weekly aggregate Feed Conversion Ratio (FCR) of the control and the 
treatment groups are not different.  
H1: The mean weekly aggregate Feed Conversion Ratio (FCR) of the control and the 
treatment groups are different, higher for the treatment group and lower for the control 
group.  
38 
 
A simple t-test was used to test for the differences in mean value of the average body weight, 
average feed consumption, weekly aggregate feed conversion ratio (FCR) and average mortality 
of birds in control and treatment groups of broiler production under the experiment. The value of 
the test statistic for X1 – X2 was computed as:  
[(𝑥1−𝑥2)−(𝑢1−𝑢2)]𝑡𝑐𝑜𝑚𝑝𝑢𝑡𝑒𝑑 =           (3.1)  𝑆𝑝 1 1
√ +
𝑛1 𝑛2
(𝑛1−1)𝑠
2
1 +(𝑛2−1)𝑠
2
𝑆𝑝 = √ 2          (3.2)  
𝑛1+𝑛2−2
where, 
𝑛1and 𝑛2 = Sample size of the control and the treatment groups. 
x1 = Sample means of average body weight, average feed consumption, average stock density, 
weekly aggregate feed conversion ratio (FCR) and average mortality of the control group.  
x2 = Sample means of average body weight, average feed consumption, average stock density, 
weekly aggregate feed conversion ratio (FCR) and average mortality of the treatment group.  
s1 = Sample standard deviation of average body weight, average feed consumption, average stock 
density, weekly aggregate feed conversion ratio (FCR) and average mortality of the control group.  
s2 = Sample standard deviation of average body weight, average feed consumption, average stock 
density, weekly aggregate feed conversion ratio (FCR) and average mortality of the treatment 
group.  
39 
 
u1 = Population means of average body weight, average feed consumption, average stock density, 
weekly aggregate feed conversion ratio (FCR) and average mortality of the control group.  
u2 = Population means of average body weight, average feed consumption, average stock density, 
weekly aggregate feed conversion ratio (FCR) and average mortality of the treatment group.  
In the evaluation process of a technology (crumbled feed in this study) to be recommended for 
farmers’ (broiler producers) adoption, test for significance is carried out at 10% confidence levels. 
When this test shows significant differences in the means, it will be an indication that the 
technology’s contribution is in the returns it is bringing the farmer however, if the proposed 
technology shows no significant differences between the means, the technology will not be 
rejected outright. It however means that the contribution of such technology is in the cost saved. 
The next step then is to carry out a minimum cost analysis to determine whether the technology 
offers the lowest cost or a lower cost option of operation (Anandajayasekeram, et al., 2004).  
3.4.2 Minimum Cost Analysis  
To carry out the minimum cost analysis, the first step was the estimation of the total cost of the 
control and the treatments given that:  
TC = FC +  VC               (3.3)  
where TC is the Total Cost, VC is the Variable Cost and FC is the fixed cost.  
Table 3.1: Illustration the minimum cost estimation process  
Budget components  Control Group Treatment Group 
Fixed cost elements  Total fixed cost (Cfc) Total fixed cost (Cft) 
Variable cost elements  Total variable cost (Cvc) Total variable cost (Cvt) 
Total cost  A = Cfc + Cvc B = Cft + Cvt 
Source: Adapted from Anandajayasekeram et al. 2004.  
40 
 
The fixed cost for the controlled group (Cfc) is different from the fixed cost of the treatment group 
(Cft). The total fixed cost of the experiment was divided into two equal parts for the groups and the 
allocation to each group is less the salvage value, divided by the lifespan the assets in years. The 
value obtained is further divided by the output to determine the contribution each unit of the output 
is making towards the recovery of the fixed cost.  
In carrying out the minimum cost analysis, the following procedure was adopted:  
1. Identify and write down all the inputs that differ across treatments, the feeds (crumbled 
feed for the treatment group and mash feed for the controlled group)  
2. Quantify the level of input in each treatment and then  
3. Estimate the price of inputs.  
The cost of the input to the farmer on the field is always higher than its price on the market. 
Monetary Field Price = Purchased Price + Marketing Cost.  
The minimum cost analysis involved the computation of the total costs of the various groups A 
and B by compiling and summing up the values of the components of the variable and fixed costs. 
The group that offered the lower option of production cost was selected for further analysis.  
Decision rule: If A > B then further analysis will be carried out on the treatment group. and if A 
< B then then further analysis will be carried out on the control group.  
We may also need additional investments in the design of new feeders, increasing the number of 
drinkers. This also includes yearly fixed costs of depreciation, repairs and maintenance. However, 
if changes can be made without additional investment required, additional cost as a result of the 
change is zero. Total reduced income and total additional costs have the same negative effect on 
farm business net income. Table 3.2 outlines the format of a partial budget.  
41 
 
3.4.3 Sensitivity Analysis of the Total (TC) 
The sensitivity analysis followed a minimum cost analysis carried out to test whether the 
contributions of the crumbled feed is worth further economic analysis. It was performed to 
understand the extent to which the risk associated with use of the crumbled feed will influence its 
financial acceptability due to market price variations. The sensitivity analysis was also carried out 
to assess the behaviour of the total cost of production due to increase in the price of the crumbled 
feed. It tests the ability of the crumbled feed recommended to farmers to stand the influence of its 
own price variation on the market. To successfully implement the sensitivity analysis, we first 
have to conduct the minimum cost analysis and then determine the contribution of crumbled feed 
to lowering cost of production. The technique appropriate for the analysis of changing an input in 
farm operations is partial budgeting (Horton, 1982). The sensitivity analysis is then conducted 
from the total variable cost of operating the farm using the proposed technology with the minimum 
cost of operation. The sensitivity was performed by assigning arbitrary values to the new prices of 
the crumbled feed and the total cost of production is then computed to determine how it varies per 
the degree of increase in the price of crumbled feed.  
The following are the steps involved in carrying out successfully a sensitivity analysis:  
1. Construct and perform a marginal analysis with the most likely price  
2. Repeat the analysis with a range of prices - normally one price that is lower than most 
likely price and another which is higher than the most likely price and  
3. Compare the results against the minimum acceptable rate of return.   
 
 
 
42 
 
Table 3.2: Sensitivity Analysis for Crumbled Feed 
 Control Treatment 
Average yield (kg/bird) W Y 
Revenue at market price  Z R 
Cost of mash feed  E -  
Cost of crumbled feed  -  V 
Other costs associated with crumbled feed use  F K 
Total cost of feed  G XX 
Net revenue  (Z-G) (R-XX) 
Source:  Adapted from Anandajayasekeram (2004).  
MRR (switching from mash to crumbled) = (((R-XX)- (Z-G))*100)/(XX-G))                   (3.4) 
If MRR (switching from mash to crumbled) > MARR (Minimum acceptable rate of return for cash investment) 
then the technology is accepted. The minimum acceptable rate of return (MARR) was determined 
by estimating the average interest charges applicable to the agriculture industry in Ghana, 32.1% 
as of July 1st, 2017 (Banks interest rates, July 2017).  
3.4.4 Competitiveness of Broiler Production Under the Experiment  
A comparative cost-price analysis was done to check the conditions of the broiler business when 
they are to sell at the minimum prevailing market price of imported chicken. Finally, Marginal 
Value Product (MVP) of broiler was determined with respect to the limited resources situation to 
check the relationship between the unit contribution of the crumbled feed and its unit price. The 
MVP is the market value of the output obtained as a result of an additional unit of input.  It 
calculated by finding the product of the marginal product and the unit market price of the additional 
output. It is also called marginal revenue product. 
Estimation of the competitiveness of broiler production was achieved using the following 
mathematical model:  
43 
 
Pmb = Av.C + M              (3.5) 
or  
Pmb > TC               (3.6)  
where Pmb is the market price of the broiler meat,  
Av.C is the average cost of production and  
 M is the margin of the producer  
The fact that the cost of an input to the broiler producer on his or her farm is higher than the market 
price of the input was taken into account while estimating the total cost of production. Using 
prevailing / market price of the broiler meat implies that processing and marketing costs must be 
included in the total cost of production to fully account for the cost of production to get the product 
to the market. The cost of cold storage was included in the total of production because the product 
was kept in cold room before delivery to clienteles.  
There may be the temptation to reject the crumbled feed use on the basis that it fails to make the 
broiler business more competitive on the domestic market should Pmb < AvC. However, a further 
analysis such as MVPcrumbled feed (Marginal Value Product of the crumbled feed) tells a better story 
about the performance of the technology.  
MVPcrumbled feed  (Marginal Value Product of broiler) is a powerful supplementary analysis of cost 
competitiveness of broiler production using crumbled feed.  
𝑀𝑉𝑃𝑏𝑟𝑜𝑖𝑙𝑒𝑟  = 1           (3.7)  
𝑃𝑏𝑟𝑜𝑖𝑙𝑒𝑟∗𝑀𝑃𝑏𝑟𝑜𝑖𝑙𝑒𝑟  
𝑀𝑉𝑃𝑏𝑟𝑜𝑖𝑙𝑒𝑟  = 𝑀𝑃𝑏𝑟𝑜𝑖𝑙𝑒𝑟  ∗ 𝑃𝑏𝑟𝑜𝑖𝑙𝑒𝑟            (3.8)  
44 
 
Where: 𝑀𝑉𝑃𝑏𝑟𝑜𝑖𝑙𝑒𝑟   is the Marginal Value Product of broiler.  
 𝑀𝑃𝑏𝑟𝑜𝑖𝑙𝑒𝑟  is the Marginal Product of broiler meat.  
𝑃 𝑏𝑟𝑜𝑖𝑙𝑒𝑟  the Price of broiler meat.  
Broiler production in Ghana is characterised by high cost of production.  
𝑴𝑽𝑷𝒃𝒓𝒐𝒊𝒍𝒆𝒓  > 𝟏.              (3.9)  
𝑷𝒄𝒓𝒖𝒎𝒃𝒍𝒆𝒅 𝒇𝒆𝒆𝒅 
When the ratio of the marginal value product of the broiler meat is greater than the price of the 
crumbled feed, it means the adoption of the crumbled feed is economically viable.  
𝑷𝒄𝒓𝒖𝒎𝒃𝒍𝒆𝒅 𝒇𝒆𝒆𝒅  is the price of the crumbled feed.  
The feed conversion ratio (FCR) is an indication of how efficiently the birds converted the feed 
consumed into body mass. It is computed by dividing the actual quantity of feed consumed by 
birds by the weight gained.  
𝑄𝑈𝐴𝑁𝑇𝐼𝑇𝑌 𝑂𝐹 𝐹𝐸𝐸𝐷 𝐶𝑂𝑁𝑆𝑈𝑀𝐸𝐷 (𝐾𝐺) 
𝐹𝐶𝑅 =         (3.10) 
𝑊𝐸𝐼𝐺𝐻𝑇 𝐺𝐴𝐼𝑁𝐸𝐷 (𝐾𝐺) 
(Arbor Acres Broiler Management Handbook, 2014).  
3.5 Data and Study Area  
Data for the study was collected from a farmer managed economic experiment during which broiler 
birds were raised for six weeks under the settings of commercial broiler production for accurate 
data to be obtained to meet the demands of the study. Data collection tools were designed to 
facilitate the collection of data on all farm activities. Records were kept on all costs elements the 
market price of the matured birds per weight.  
45 
 
This study used the combination of field experiment data and production cost and prices of inputs 
and output. The output prices were collected by interviewing chop bar operators and retailers of 
frozen chicken at the Madina market.  The experiment was managed by a poultry production 
manager assisted by a veterinary officer, the researcher and a skilled farm hand from AMASS 
FARMS.  
Oyarifa is a small town in the Ga Esat Municipal Assembly. Its population is diverse with varied 
occupation. The geographical Coordinates of Oyarifa are: 5°46′14″N 0°10′50″W and (72 m) above 
sea level.  
The Ga East Municipal Assembly is situated at the north-West part of Greater Accra Region. Its 
total land area is ninety-six squared kilometres (96 sq Km). The assembly shares border in the 
West with the Ga West Municipal Assembly (GWMA), on the east with the La-Kkwantanang 
Municipal Assembly (LaNMA), the south with Accra Metropolitan Assembly (AMA) and finally 
in the north with the Akwapim South District Assembly. The Municipality was established by 
Legislative Instrument (L.I) 1864. Per the population and housing census carried in 2010, the 
district is home to 147,742 with 72,987 males and 74,755 females. Abokobi is its district capital.  
AMASS Farms was established in 1996 with a few layers in one of the communities of Oyarifa 
known as Special Ice owing its name to the Special Ice water company located in the community. 
From 1998, AMASS Farms started the production of broilers production in 2000.  
  
46 
 
CHAPTER FOUR 
RESULTS AND DISCUSSIONS  
4.1 Introduction  
The focus of this chapter is the presentation of results and discussion of the study. It comprises the 
outcome of the experiment and the t-statistics testing for significant differences among the means 
of the parameters of interest measured under the control and the treatment groups. It also includes 
the minimum cost estimation, sensitivity analysis marginal analysis, average cost estimate, 
marginal value product, and the estimate of cost competitiveness.  
4.2 Summary of the Outcome of the Experiment  
A field experiment was conducted where 294 Day Old Chick were reared for 6 weeks using mash 
and crumbled feed. The performance of the control group under the experiment conducted in terms 
of live weight and weight gain shows that prior to the experiment, the day-old-chicks’ average 
weight was 43.200 g. At the end of week one, the average live weight of the birds was 0.156 Kg, 
0.399 Kg for week two, 0.694 Kg for week three, 1.109 Kg for week four, 1.504 Kg for week five 
and 1.967 Kg for week six. The weekly live weight gain under mash feed (control group) followed 
an increasing pattern. At the end of week one, the average live weight gain was 0.113 Kg. 
However, at the end of the second week, the live weight gain more than doubled to 0.243 Kg. The 
weight gain during the third week registered a 51 g additional weight gain to 0.294 Kg. During 
week three, the performance was really poor for the control group. Week four recorded a live 
weight gain of 0.416 Kg while the fifth week recorded the poorest performance of 0.395 Kg, which 
is a decrease in performance. An increase in the live weight gain to 0.463 Kg was recorded for the 
last week. Comparative to the results obtained by (Pirzado et al., 2015), the birds of control group 
47 
 
of the present experiment performed better, yielding 1.967 Kg against 1.885 Kg as presented in 
Table 4.1.   
Table 4.1: Weekly Live Weight and Weight Gained under the Control Group 
WEEKS Weekly live body Standard Weekly live Standard Percentage of 
weight under Deviation weight gain under Deviation weight gain  
mash feed (Kg)  mash feed (Kg)  
(control) (Kg) (control) (Kg) 
WEEK 0 0.043 0.001 0.043 0.001 -  
WEEK 1  0.156 0.016 0.113 0.017 0.072 
WEEK 2  0.399 0.013 0.243 0.022 0.061 
WEEK 3  0.694 0.010 0.295 0.057 0.042 
WEEK 4  1.109 0.020 0.416 0.024 0.037 
WEEK 5  1.504 0.075 0.395 0.062 0.026 
WEEK 6  1.967 0.103 0.463 0.048 0.024 
Source: experimental/agronomic data, 2017./Appendix 6 
For the treatment group (the birds fed with crumbled feed), the day-old-chick weight was 40.530 
g while week one, two and three recorded respective weights of 165.230 g, 431.070 g and 747.520 
g. Week four recorded 1184.650g, 1645.760 g in week five and 2311.700 g in week six. At the 
end of week one, live body weight was 124.700 g followed by 265.840 g, 316.45 g and 437.130 g 
respectively for weeks two, three and four. For the treatment group, week five recorded a poor 
performance of 461.110 g however, the last week saw a significant increment to 665.940 g in live 
weight. The birds fed with the crumbled feed (treatment group) of the present experiment 
performed better with a weight of 2311.700 g against 2080.700 g as reported by (Pirzado et al., 
(2015). The percentage of weight gain described the weight gain pattern of the control group (Table 
48 
 
4.2). the difference in the weight of the DOCs (Day-Old-Chicks) cannot be explained by the study. 
It was the recorded values after the birds were randomly divided in the various pens.  
 
Table 4.2: Weekly weight gain of the treatment group 
WEEKS Weekly live body Standard Weekly live weight Standard Percentage of 
weight of the Deviation gain of the Deviation weight gain  
treatment (Kg)  (Kg) treatment (Kg)  (Kg) 
WEEK 0 0.041 0.001 - 0.001 0.000 
WEEK 1  0.165 0.009 0.125 0.007 0.075 
WEEK 2  0.431 0.008 0.266 0.016 0.062 
WEEK 3  0.748 0.019 0.316 0.018 0.042 
WEEK 4  1.185 0.061 0.437 0.051 0.037 
WEEK 5  1.646 0.069 0.461 0.021 0.028 
WEEK 6  2.312 0.244 0.666 0.180 0.029 
Source: experimental/agronomic data, 2017.Appendix 6  
The comparison of the weekly live weight of the control and the treatment (Table 4.3) shows the 
performance of the treatment group vis-à-vis the control group. Though the mash feed had a head 
at day-old-chick age, the live weights for the treatment group (birds fed with crumbled feed) 
throughout the six weeks were better than those of the control group (birds fed with mash feed). 
The weekly live weight differences of the two groups followed the same pattern; giving a head 
start to the control group. However, the treatment group led the chart at the end of the first week 
through to the end of sixth week. The differences in weight gain between the treatment and control 
groups were 9.170 g for week one and 31.920 g, 55.740 g, 75.190 g, 141.420 g, and 344.100 g for 
weeks two, three, four, five and six respectively.   
49 
 
The agronomic data from the experiment carried out revealed differences in the weight gained by 
the birds at the end of the six weeks. The final average live weight of the birds fed with mash feed 
was 1.968 kg against 2.312 kg for the birds fed with crumbled feed. The difference in final live 
weight of bird was determined to be 0.344 kg at the end of the six weeks of the experiment (Table 
4.3). this difference was not significantly different at 90% confidence interval. The sample size of 
controlled and the treatment groups 147 birds each.  
Table 4.3: Weekly live weight  
WEEKS Weekly live weight for Weekly live weight for Weekly differences in 
Mash (g) crumbled (g)  live weight (g)  
WEEK 0 43.200 40.533 -2.667 
WEEK 1  156.067 165.233 9.167 
WEEK 2  399.153 431.070 31.917 
WEEK 3  693.777 747.520 53.743 
WEEK 4  1109.465 1184.653 75.188 
WEEK 5  1504.347 1645.763 141.417 
WEEK 6  1967.607 2311.704 344.097 
Source: experimental/agronomic data, 2017./Appendix 6 
The birds of both groups (control and treatment) consumed the same quantity of feed. Having 
consumed the same quantity of feed and yielding different weight gain is somewhat beyond the 
economics and could only be explained by the animal scientists for scientific appreciation of the 
technology’s performance being complemented by the economic analysis. Variations in the live 
weight gain by the control and treatment groups are outlined in.  
 
50 
 
The feed conversion ratio (FCR) for the controlled group was 2.060 and for the treatment group 
was 1.750. This means that in the treatment group, the birds fed with crumbled feed performed 
better in terms of feed conversion than birds in the controlled group (Table 4.5).  
Table 4.4: Feed conversion ratio of control and treatment groups 
 Control group Treatment group 
Feed Conversion Ratio (FCR) 2.060 1.750 
Source: experimental/agronomic data, 2017/Appendix 4   
The feed conversion ratio (FCR) is an indication of how efficiently the birds converted the feed 
consumed into body mass. The lower the FCR value the better the performance of the birds, 
meaning the birds of the treatment group consumed 1.750 kg of feed to produce 1.000 kg of live 
weight bird and the control group consumed 2.060 kg of feed to produce 1.000 kg of live weight 
bird. The crumbled feed birds, the treatment group, had a better FCR. This outcome on feed 
conversion ratio is in line with (Samarasinghe & Lanka, (2012).  
The t-test results revealed that none of the influential parameters of interest listed in Table 4.5 
tested for both the control and the treatment groups showed significant statistical differences in 
their means except for the feed conversion ratio (FCR) which was significant at 10% for replication 
one (REP1), (P < 0.061) and replication three REP3, (P < 0.095). This implies that the treatment 
group for replication one and replication three had better feed conversion ratio (FCR) than the 
control groups of the same replications one and three. The negative sign is telling the direction of 
the values.  
Almost all experimental research carried out on the performance of broiler production with respect 
to crumbled feed reported significant differences among the mean values of parameters such as 
51 
 
weight gain and feed conversion ratio (Dozier et al., 2010; Zohair et al.,  (2012); Arbor Acres 
Broiler Management Handbook, 2014.).  
It was observed during the feeding process over the six weeks that the fine particles in the crumbled 
feed were more than thirty percent (30%) of the total quantity. Literature reports that the presence 
of fine particles in the crumbled or pelleted feed reduces the performance of the broiler birds 
(Neves et al., 2014). It could also be that the poor health and/or physiological conditions of the 
day-old chicks could have impeded the exhibition of their full genetic potential. This is the reality 
farmers face every now and then.  
Table 4.5: Results of t-test 
 Mean Standard Sample t- P-
values Deviation size statistics values 
BODY WEIGHT OF THE BIRD REP 1 1.003 0.730 98 -0.342 0.739 
BODY WEIGHT OF THE BIRD REP 2 0.979 0.708 98 -0.176 0.864 
BODY WEIGHT OF THE BIRD REP 3 0.932 0.625 98 -0.227 0.825 
AGGREGATE_LIVE_WGHT  0.971 0.687 294 -0.253 0.805 
AGGREGATE_WGHT_GAINED  0.320 0.130 294 -0.621 0.548 
MORTALITY_P1MSH1 0.500 0.836 98 0.877 0.401 
MORTALITY_P16MSH3 0.167 0.408 98 0.000 1.000 
MORTALITY_P23MSH2 0.500 0.836 98 -0.222 0.828 
REP1_ FCR  1.575 0.387 98 -2.112* 0.061 
REP2_ FCR  1.767 0.416 98 -0.391 0.704 
REP3_ FCR  1.538 0.289 98 -1.844* 0.095 
AGGREGATE FINAL FCR  1.671 0.356 294 -1.343 0.209 
Source: experimental/agronomic data, 2017/Appendix 4  
52 
 
Anandajayasekeram, (2014) noted that in the traditional settings of research by scientists such us 
biologists and agronomists, technologies or innovations are rejected after they have failed to pass 
the t-statistical test at one, five and ten percent (0.010, 0.050 and 0.100) confidence levels. The 
technology is not considered further.  
Farm businesses that adopt technologies and innovations evaluate them in a different manner, they 
do not limit themselves to the science. Instead, they combine it with the business to improve. The 
business evaluates technology based on its objectives to increase revenue or to reduce cost. When 
the mean output of a technology is significantly different from an existing one it is being compared 
to, it means the contribution of the technology is directly related to business returns. However, 
when the t-statistics reveals no significant difference between the means of what the farmer is 
already obtaining and what the technology or the innovation is contributing, it means it is likely 
that the contribution of the technology is in a form different from returns or it is making no 
contribution at all. It could be in cost reduction, savings, or better still, it could be in quality 
improvement. The improvement could also be in longer storability characteristics, meeting the 
preference of market and more. Among all the variables tested for, the feed conversion ratio (FCR) 
for replications one (REP 1) and two (REP 2) were significantly different, however, FCR for 
replication three was not significantly different. Further analysis is therefore required and this is 
critical in deciding whether to reject the technology or to recommend it to businesses and farmers 
(Anandajayasekeram, 2014).  
4.3 Minimum Cost Analysis 
Based on the results of the minimum cost analysis, it is clear that the treatment group has a lower 
cost of production as a result of the better weight gain by the birds though the mean differences 
were not significant statistically. Under the controlled group, the total cost of production of a 
53 
 
kilogram live weight of broiler is GHS 7.134 while under the treatment group we can produce a 
heavier bird of average live weight of 2.312 kg at a cost of GHS 6.101 per kilogram of live weight 
(Table 4.7). Having observed from the minimum cost analysis that the crumbled feed offered the 
better production frontier, the crumbled feed technology qualifies to be considered for further 
analysis.  
Table 4.6: Total cost of production 
Production cost components Cost under mash feed Cost under crumbled feed 
(control group) per kg of (treatment group) per kg of 
live weight produced  live weight produced  
Fixed Cost per kg of Bird 0.128 0.109 
Feed Cost per kg of bird produced 4.262  3.642  
Labour Cost per kg of bird produced  0.342 0.291 
DOCs (Day-Old-Chicks)  1.779 1.514 
Cost of drug, vitamins, glucose 0.216 0.184 
Transportation 0.091 0.078 
bedding materials & Water 0.078 0.066 
Technical assistance 0.100 0.100 
Electricity 0.137 0.117 
Veterinary service charges 0.120 0.081 
Total Cost Production 7.134  6.101  
Source: experimental/agronomic data  
The next further analysis to be carried out is the partial budget analysis. The partial budget 
technique was employed to measure the net contribution of a change in the farm business with 
54 
 
respect to cost reduction when the technology of crumbled feed is adopted in broiler production 
(Table 4.8). 
From the partial budget analysis, as a broiler producer changed from mash feed to using crumbled 
feed, the broiler business made an additional gain of GHS 25.432 while reduced income was to 
the tune of GHS 21.648 per bird. Additional and reduced costs were GHS 7.875 and GHS 7.855 
respectively per bird.  
Table 4.7: Partial budget analysis of crumbled feed net contribution 
Revenue added  Value (GHS) Sacrificed gain  Value (GHS) 
Birds sold under crumbled 
Birds sold under mash feed  
feed    
2.312*11 25.430 1.968*11 21.640 
    
    
Sum of the additional 25.432 Sum of the reduced gain  21.648 
income  
Saved costs  Value (GHS) Added costs  Value (GHS) 
Mash feed   Crumbled feed   
 7.850  7.870 
    
    
    
Sum of the reduced costs  7.850 Sum of the additional costs  7.870 
Total 33.280  29.520 
Net gain per bird 3.764 
Net gain per Kg 1.630 
Source: experimental/agronomic data, 2017. Appendix 6 and 7   
The net contribution due to crumbled feed was GHS 3.764 per live bird produced. Therefore, on a 
kilogram basis, GHS 1.629 was obtained as net contribution of crumbled feed to the farm business. 
55 
 
Yield from experimental work carried out to test for the viability of a technology are always 
different from the actual yield farm businesses achieved after adopting.  
4.4 Sensitivity of Total Cost to Increasing Price of Crumbled Feed and its effects on ROI  
The minimum acceptable rate of return (MARR) was determined by estimating the average interest 
charges applicable to the agriculture industry in Ghana, 32.100% as of July 1st, 2017 (Appendix 
2), therefore the minimum acceptable rate of return (MARR) was to be 32.100% for broiler 
production businesses in Ghana. This is the prevailing rate at the time the experiment was 
conducted.  
Table 4.8: Marginal rate of return of crumbled feed switching from mash to feed 
  Control Treatment 
Average yield (kg/bird) 1.967 2.312 
Revenue at GHS 11.00 per kg of meat  21.637 25.432 
Add cost by switching from mash to crumbled feed  - 0 
Added cost associated with crumbled feed use - 1.439 
Total cost that vary due to moving from mash to - 1.439 
crumbled feed 
Net Benefit 21.637 23.993 
Source: experimental/agronomic data and field interview on price information, 2017.  
The higher net benefit obtained for the treatment group was as a result of the better weight gained 
by the birds of the treatment group, generating a net benefit of GHS 23.990 while the control group 
generated a net benefit of GHS 21.637.  
56 
 
Results showed that MRR (switching from mash to crumbled) is 241.892% and MARR is 32.100%. Adoption 
of the crumbled feed is stable because 241.892% > 32.100%. Soha, (2014) arrived at the same 
conclusion evaluating sorghum farms and obtaining (MRR) > (MARR).  
When the market price of the crumbled feed increases by 5, 15, and 30% what then will happen to 
the broiler production farm business? Or, what will be the stability of the broiler production 
business?  
Table 4.9: Sensitivity of the of total cost to price variation of crumbled feed using marginal rate of 
return analysis  
 
  Control Treatment 5% 15% 30% 
increase   increase  increase  
Average yield (kg/bird) 1.967 2.312 2.312 2.312 2.312 
Gross revenue at GHS 11.00 per kg 21.637 25.432 25.432 25.432 25.432 
Addition in cost due to price change - 0 0.409 1.227 2.455 
of crumbled feed  
Other cost associated with crumbled - 1.110 1.110 1.110 1.110 
feed use 
Total cost that vary due to moving - 1.110 1.519 2.337 3.565 
from mash to crumbled feed 
Net Benefit  21.637 24.322 23.913 23.095 21.867 
Source: Experimental/agronomic data, 2017.  
From the marginal analysis, the additional costs due to the increment in the price of the crumbled 
feed were computed (row named Total cost that vary due to moving from mash to crumbled feed 
in table 4.10). The new total cost of production was computed (Table 11) showing how the total 
costs varied accordingly with respect to the percentage increase in the price of the crumbled feed. 
57 
 
The trend of price variation was informed by the likelihood of inputs’ prices to go up. Therefore, 
the study used this as a basis to opt for more of price increase rather than balancing it with equal 
cases of decrease in price.  
 
Table 4.10: New total cost as a result of crumbled feed price variations 
  Control Treatment 5% 5% 15% 30% 
decrease  increase   increase  increase  
Total cost that vary due to moving 0 1.110 0.701 1.519 2.337 3.565 
from mash to crumbled feed 
Total Cost Production before 6.800 5.810 - - - - 
increment  
Net Benefit 21.637 25.432 25.432 25.432 25.432 25.432 
New total Cost Production  13.370 13.440 14.140 14.960 15.780 17.010 
Source: experimental/agronomic data, 2017.  
The effects of increase in the price of crumbled feed, is directly observed in the new total cost of 
the trend of production. A 5% increase in the price of crumbled feed results in the addition of GHS 
1.520 which pushes the total cost of production to GHS 14.960. A 15% increase adds GHS 2.340 
to the cost of feed to produce one bird which pushes the total cost to GHS 15.780. A 30% increase 
leads to a total cost of production to assume a new value of GHS 17.01 (Table 4.12). 
 
 
 
58 
 
Table 4.11: Return on investment analysis showing how feed price variations affect the ROI 
 Control Treatment 5% 5% 15% 30% 
decrease  increase   increase  increase  
Farm benefit  21.637 25.432 25.432 25.432 25.432 25.432 
New cost due to price 13.370 13.440 14.140 14.960 15.780 17.010 
increase of crumbled feed 
ROI (Rate on investment) 1.620 1.890 1.790 1.700 1.610 1.490 
% ∆ in total cost due to P - 0  -3.043 3.043 9.132 18.266 
∆ of crumbled feed  
Source: experimental/agronomic data, 2017.  
The return on investment analysis provided a clearer understanding of the implication of the 
variations in the price of the crumbled feed. A gradual decrease was observed in the return on 
investment (ROI) with respect to increase in crumbled feed price. The increase in price of the 
crumbled feed to 5%, 15% and 30% resulted in decrements in return on investment by 1.7, 1.61 
and 1.49 respectively. When the price of the crumbled feed decreases by 5%, the total cost also 
decreases by 3.04% when the price increase by 5%, 15% and 30% the total cost of production 
increase by 3.040%, 9.130% and 18.270% respectively.  
4.5 Competitiveness of Broiler Produced Under the Experiment at the Prevailing Market 
Price  
Using the market price of the most competitive broiler meat on the Ghanaian market, the selling 
price of GHS 8.000 per kilogram was obtained from the Madina market by interviewing the cold 
store operators and the chop bar operators. Broiler production business in Ghana switching from 
the use of mash to crumbled feed resulted in a production cost that is equal to the market price of 
the imported chicken meat. The difference is shown as follows: GHS 8.000 < GHS 8.182 this is 
really a great indication that the Ghanaian poultry industry can sustainably transform and grow 
59 
 
with great economic impact. The producer will then have to reduce further his total cost of 
production by GHS 0.182 to be able to sell at this competitive price with zero margin for the 
business. The purpose of business is to make profit so if the current cost of production does not 
allow for profit, further means of reducing production costs must be explored or getting increased 
output out of the same level of inputs.   
Table 4.12: Production budget from rearing of birds through processing to market including 
Production cost components Cost under mash Cost under crumbled PCompetitive 
feed (GHS)  feed (GHS)  (GHS) 
Fixed Cost per kg of Bird 0.128 0.109  
Feed Cost per kg of bird produced 4.262 3.642  
Labour Cost per kg of bird produced  0.342 0.291  
DOCs (Day-Old-Chicks)  1.779 1.514  
Cost of drug, vitamins, glucose 0.216 0.184  
Transportation 0.091 0.078  
bedding materials & Water 0.078 0.066  
Technical assistance 0.100 0.100  
Veterinary service charges  0.100 0.100  
Electricity 0.137 0.117  
Processing cost 1.017 0.865  
Marketing cost 1.000 1.000  
Management  0.300 0.300  
Total Cost Production 9.334 8.182 8 
Source: experimental/agronomic data, 2017.  
PCompetitive is the Price of the most competitive broiler meat on the Ghanaian market. 
 
 
60 
 
However, when the broiler farmer produces with the mash feed, the relationship between his or 
her total production cost and the prevailing market price of the competitive imported chicken meat 
is as follow: GHS 8.000 < GHS 9.334. This means that per every kg of dressed broiler, this 
producer will have to further reduce the total cost of production by GHS 1.334 to be able to sell at 
the prevailing competitive market price with zero margin for his or her broiler production business 
(Table 4.12).  
Though the crumbled feed technology is not able to solely drive the price competitiveness of 
broiler production, it should not be rejected on this basis. It offers a better option compared to the 
existing one. Therefore, many other means of costs reduction should be explored to turn the broiler 
industry into a competitive one. One of the ways to reduce broiler production cost is to have the 
capacity to increase stock size. By increasing the stock size, the per unit cost of producing a bird 
or a kilogram of meat drastically reduces.  
This market price information was from cold store and chop bar operators in the Madina Market.  
The total production cost at this level included the transportation cost, processing cost and the 
marketing cost because the value of the output is measured against the prevailing market price. 
Therefore, production cost at this level must include transportation cost to convey the meat to the 
point of sale, processing cost and the marketing cost.  
The crumbled feed technology contributes to cost reduction in broiler production. It reduces the 
(average) cost of production to equal the market price of the most competitive broiler meat on the 
market, suggesting zero margin on investment. The use of crumbled feed led to savings in the cost 
of production of GHS 3.760 per live bird weight produced.  
61 
 
The Marginal Value Product (MVP) analysis was carried out to help to evaluate the contribution 
of the crumbled feed technology.  
Table 4.13: Marginal value product analysis of crumbled feed 
 Price of 1 Kg Amount of meat produced by Price of 1Kg of 
of feed (GHS)  1 Kg of feed or MP (Kg)  meat (GHS)   
Crumbled feed  2.022 0.571 8 
    
1
MVP =  ∗ 𝑃𝐶𝑓   4.571  𝐹𝐶𝑅
 
𝑴𝑽𝑷 𝒎𝒆𝒂𝒕
 2.261   
𝑷𝒄𝒓𝒖𝒎𝒃𝒍𝒆𝒅 𝒇𝒆𝒆𝒅 
Source: experimental/agronomic data, 2017.  
 
𝑴𝑽𝑷𝒄𝒓𝒖𝒎𝒃𝒍𝒆𝒅 𝒇𝒆𝒆𝒅 = 𝟐. 𝟐𝟔𝟏 > 𝟏.  
𝑷𝒄𝒓𝒖𝒎𝒃𝒍𝒆𝒅 𝒇𝒆𝒆𝒅 
The ratio of Marginal Value Product of crumbled feed to the unit price of crumbled feed was 
computed as 2.261 which means that the adoption of the crumbled feed is economically viable.  
62 
 
CHAPTER FIVE  
SUMMARY, CONCLUSIONS AND POLICY RECOMMENDATIONS  
5.1 Introduction  
This chapter provides a summary of the major findings, the conclusions and then the policy 
recommendations of the study.  
5.2 Summary of the Major Findings of the Study  
The objective of the study was to assess and evaluate the contributions of crumbled feed to 
reducing cost of production and to investigate its economic viability. The findings showed that the 
mean differences for the feed conversion ratios (FCRs) of replication one and three of the control 
and treatment groups were statistically significant at 0.100 percent confidence level. At the end of 
the six weeks of the experiment, the birds were harvested. Based on the feed conversion ratio, the 
cost of per unit weight of production, the treatment group (birds fed with crumbled feed) performed 
better than the controlled group (birds fed with mash feed) The final average live weight of the 
birds of the controlled group was 1.967 kg while the treatment group recorded 2.312 kg, 
outperforming the controlled group by a difference in mass of 0.344 kg. The feed conversion ratio 
(FCR) of the controlled group was 2.060 and 1.750 under the treatment group.  
It was clear from the minimum cost analysis that using the crumbled feed for producing broiler 
gave the lowest cost of production option. The crumbled feed (treatment group) cost option was 
GHS 6.100 to produce 2.312 kilograms of live weight bird. The mash feed (controlled group) cost 
of production option was GHS 7.130 to produce 1.967 kilograms of live weight bird.  
In the partial budget analysis estimating the net addition to the net income of a broiler business, 
the crumbled feed usage contributed an additional of GHS 3.764 to the business per bird produced 
63 
 
or GHS 1.629 per 1 kg of live weight of broiler produced. This contribution of GHS 3.764 per bird 
raised was considered cost saving achieved through the use of the crumbled feed in the experiment. 
The sensitivity analysis threw much light on how the total cost of production also varied with 
respect to the varied prices of the crumbled feed. The corresponding rates of return also provided 
much understanding on how return on investment was also affected as a result. A five percent (5%) 
increment in the price of feed led to a three percent increase in the total cost of production 
(Appendix three).  
The experimental broiler production was short by GHS 0.080 (eight Ghana pesewas) to be able to 
sell at the prevailing minimum market price of imported chicken with zero margin. This means 
that the crumbled feed has made tremendous contributions to the price competitiveness of broiler 
production in Ghana. However, there remains a lot more opportunities to be explored to bring 
down further the cost of production, and increase the value of production at a minimum possible 
cost frontier.  
5.3 Conclusion  
This study therefore concludes based on its findings that the evaluation of the crumbled feed 
technology has made meaningfully contributions to cost reduction in broiler production. The 
crumbled feed has reduced the cost of production to equal the market price of the most competitive 
broiler meat on the market. Thus, at this point, the producer is making zero margin on investment. 
These contributions were however not enough to enable the broiler producer to sell at the 
prevailing competitive price of imported frozen chicken. There therefore remains the call to further 
explore other means of cost reduction to make broiler production more competitive. To supplement 
this outcome, the ratio of the unit marginal value product to the price of a unit of the crumbled 
feed was determined. The result obtained (2.216 >1) show that the crumbled feed makes significant 
64 
 
contribution to broiler production and must therefore be recommended for use by broiler farmers 
in the country.  
Birds of the treatment group performed better than those of the controlled group. The treatment 
group that fed the birds on crumbled feed, recorded additional weight gains of 0.344 kilograms. 
Also, the feed conversion ratio of 1.750 for the treatment group was better than the feed conversion 
ratio achieved by the controlled group. The use of crumbled feed therefore led to savings in total 
cost of production of GHS 3.760 per live weight bird produced.  
5.4 Policy Recommendations  
Based on the conclusion of the study, the following policy recommendations are made for policy 
actions to be taken in order to influence the cost-effective production of broilers and set the 
Ghanaian broiler industry on a new direction towards competitiveness.  
The study recommends that the feed mill industry should carry out a sensitization program 
targeting to introduce crumbled feed to broiler producers in Ghana. Public Private Partnerships 
should be developed to support the replication of more of this demonstrations in other parts of the 
country to encourage the farmers through participation.  
There is a major cost incurred by the farmers after the birds have reached market weight as a result 
of them keeping the birds on their farms because the birds must be fed daily. This is an additional 
cost going into production with no return to be realised on it. Learning from this experiment, where 
all the birds were harvested after reaching the market weight, it is recommended that same should 
be adopted nationwide by broiler businesses to dress the birds into ready to use form for market 
segments such as fast foods vendors, hotels, restaurants, chop bars and khebab and grilling joints.  
65 
 
Government should develop and implement policies that are geared towards making the broiler 
industry a more integrated industry since it is directly linked to the maize and soybean sub-sectors 
and also to the feed mill industry. The Ghana National Poultry Farmers Association should 
collaborate with government to invest in researches that will come up with lower cost input options 
and techno-innovation options that will lead the poultry industry into a sustainably competitive 
level. Processing centres should be established at vantage points within the poultry-intensive zones 
of the country to boost cheaper poultry production for domestic consumption and probably for 
export in the near future.  
The sensitivity analysis conducted revealed that at the current economic condition, and at current 
prices of crumbled feed, the adoption of the crumbled feed technology by broiler producers in 
Ghana should be encouraged by Ghana Poultry Farmers Association.   
As a country prone to heavy price fluctuations of commodities, government should implement 
farmer business enterprise policies that will drive the development of self-sustaining maize and 
soybean sectors as a consistent support for the broiler industry. Other means of cost reduction to 
make broiler production more competitive are needed.   
66 
 
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Appendices 1: 
Data collection tools on the experiment  
CONTRIBUTION OF CRUMBLED FEED TO COST REDUCTION AND COMPETITIVENESS OF BROILER PRODUCTION  
DATA COLLECTION TOOL FOR THE CONTROL AND TREATMENT GROUPS  
 
  Mash  Crumbled_Wo (Normal water)  
 
DAY:  DATE:   
 Parameters  MORNING  MID-MORNING  AFTERNOON  MID-AFTERNOON  EVENING  Total  
Time: Time: Time: Time: Time:  
1 Initial body weight       
2 Number of time feeding is done per day       
3 Time of feeding       
4 Daily feed consumption        
5 Daily body weight       
6 Daily body weight gain        
7 Daily water consumption        
10 Number of time watering is done per day       
11 Mortality of Day Old Chicks       
12 Heat provision        
13 Daily Feed wasted        
14 Feeding system        
15 Watering system        
Daily and weekly activities records sheet  
74 
 
CONTRIBUTION OF CRUMBLED FEED TO COST REDUCTION AND COMPETITIVENESS OF BROILER PRODUCTION 
DATA COLLECTION TOOL FOR THE CONTROL AND TREATMENT GROUPS  
 
 
  Mash  Crumbled_Wo (Normal water) 
 
WEEK:  DATE:  
 Parameters  DAY 1  DAY 2  DAY 3  DAY 4  DAY 5  DAY 6  DAY 7  Total  
 
1 Initial body weight          
2 Weekly feed consumption          
3 Weekly water consumption          
4 Weekly body weight         
5 Weekly weight gain          
6 Mortality of DOCs          
7 Weekly Feed wasted         
8 Weekly feed wasted (% of the total feed)         
9 Weekly FCR          
10 Weekly water to feed ratio          
11          
12          
13          
Daily and weekly activities records sheet 
 
  
 
75 
 
 
CONTRIBUTION OF CRUMBLED FEED TO COST REDUCTION AND COMPETITIVENESS OF BROILER PRODUCTION  
DATA COLLECTION TOOL FOR THE CONTROL AND TREATMENT GROUPS  
  Mash  Crumbled_Wo (Normal water)  
 
FINAL (WHOLE PRODUCTION PERIOD) DATE:     
 Parameters  WEEK 1  WEEK 2  WEEK 3  WEEK 4  WEEK 5  WEEK 6  WEEK 7  Total  
 
1 Initial body weight          
2 Final feed consumption          
3 Final water consumption         
4 Final body weight (live weight)         
5 Final weight gain          
6 Final average FCR          
7 Final water to feed ratio          
8 Final feed wasted         
9 Feed wasted (% of the total feed)         
10 Mortality of DOCs          
11 Slaughter weight          
12 Dressing percentage          
13 Breast muscle percentage          
14 Hematological parameters          
15 Biochemical parameters            
Daily and weekly activities records sheet 
 
  
 
76 
 
Appendix 2:  
Detailed bank charges applicable to industries in Ghana by individual banks  
 
Source: https://www.sikasem.org/banking-services/interest-rates-banks-ghana/banks-interest-rates-july-2017/ 
 
 
77 
 
 
 Appendix 3:  
Detailed Estimation of Added Cost Due to Crumbled Feed Price Increase 
Cost increase stats due to crumbled feed price 
increase starter finisher increase/kg Consumption in kg cost/bird 
(GHS) 
   starter finisher starter finisher  
5% 5.35 5.15 0.107 0.103 1.959 2.013 0.416952 
15% 16.05 15.45 0.321 0.309 1.959 2.013 1.250856 
30% 32.1 30.9 0.642 0.618 1.959 2.013 2.501712 
 
T-Test Estimation Values for the Feed Conversion Ratio  
 
 
 
 
 
 
 
 
 
 
78 
 
Appendix 4:  
Detailed results of the t-test  
Group Statistics
Std. Std. Error 
Is it a control or treatment group? N Mean Deviation Mean
What is the fcr for the six weeks Treatment 6 1.6711 .35638 .14549
Control 6 1.9450 .35028 .14300
Which week is this? Treatment 7 4.0000 2.16025 .81650
Control 7 4.0000 2.16025 .81650
What is the fcr for week 1 Treatment 6 1.5750 .28891 .11795
Control 6 1.9250 .28494 .11633
What is the fcr for week 2 Treatment 6 1.7667 .41659 .17007
Control 6 1.8450 .25967 .10601
What is the fcr for week 3 Treatment 6 1.5383 .38737 .15814
Control 6 2.0650 .58243 .23778
 
 
 
 
 
 
 
 
79 
 
Appendix 4 Continued:  
T-Test Estimation Values for the Feed Conversion Ratio 
  
Independent Samples Test
Levene's Test for 
Equality of Variances t-test for Equality of Means 95% Confidence 
Sig. (2- Mean Std. Error Interval of the 
F Sig. t df tailed) Difference Difference Lower Upper
What is the fcr for the six weeks Equal 
.009 .927 -1.343 10 .209 -.27389 .20400 -.72844 .18066
variances 
Equal -1.343 9.997 .209 -.27389 .20400 -.72845 .18068
Which week is this? vEaqruiaanl ces 
0.000 1.000 0.000 12 1.000 0.00000 1.15470 -2.51588 2.51588
variances 
Equal 
0.000 12.000 1.000 0.00000 1.15470 -2.51588 2.51588
variances 
What is the fcr for week 1 nEoqtu al .041 .844 -2.113 10 .061 -.35000 .16566 -.71911 .01911
variances 
Equal -2.113 9.998 .061 -.35000 .16566 -.71912 .01912
variances 
What is the fcr for week 2 Equal 1.042 .331 -.391 10 .704 -.07833 .20041 -.52487 .36820
variances 
Equal 
-.391 8.376 .706 -.07833 .20041 -.53689 .38022
variances 
What is the fcr for week 3 Equal 
.541 .479 -1.844 10 .095 -.52667 .28557 -1.16295 .10961
variances 
Equal 
-1.844 8.700 .099 -.52667 .28557 -1.17608 .12274
variances 
  
not 
80 
 
 
Appendix 5:     
Feed Conversion Ratio Details  
FCR
REP1 REP2 REP3 Aggregate 
Control 1.81 1.45 1.6 1.62
Treatment 1.29 1.03 1.04 1.12
Control 1.41 1.89 1.71 1.67
Treatment 1.37 1.5 1.48 1.45
Control 1.97 2.3 2.19 2.153333333
Treatment 1.73 1.9 2.1 1.91
Control 2.11 2.25 2.15 2.17
Treatment 1.79 1.81 2 1.866666667
Control 2.05 2.07 2.62 2.246666667
Treatment 2.01 2.11 2.15 2.09
Control 2.2 2.5 2.35 2.35
Treatment 2.01 2.02 2.15 2.06
Control 2.035
Final FCR
Treatment 1.749444444   
 
 
81 
 
Appendix 6:  
Detailed information on feed consumption, feed cost, stock and live weight of birds for control and treatment group on daily basis   
 FEED CONSUMPTION  Feed Cost per Group  Stock per Group Live weight of Birds per Group   
Per bird for Per bird for Treatment 
Days  Mash Crumbled  mash  crumbled  Control  Treatment  Control  Treatment  Control Group   Group  
0 600.0 600.0 0.004 0.004 0.01 0.01 147 147 43.20 40.53 
1 1777.5 1777.5 0.01 0.01 0.03 0.03 147 147 56.67 54.93 
2 3425.4 3425.4 0.02 0.02 0.05 0.05 147 146 67.87 73.87 
3 5825.4 5825.4 0.04 0.04 0.09 0.09 145 145 82.67 86.13 
4 9062.1 9062.1 0.06 0.06 0.13 0.13 145 144 101.20 102.00 
5 13239.3 13239.3 0.09 0.09 0.20 0.20 145 143 111.33 120.20 
6 17439.3 17439.3 0.12 0.12 0.26 0.26 145 143 129.07 136.40 
7 22239.3 22239.3 0.15 0.16 0.33 0.33 144 143 156.07 165.23 
8 27639.3 27639.3 0.19 0.19 0.41 0.41 143 143 190.79 203.21 
9 33615.3 33631.3 0.24 0.24 0.50 0.50 143 143 225.52 241.19 
10 40505.3 40531.3 0.28 0.28 0.61 0.61 143 143 260.25 279.16 
11 49489.3 49527.3 0.35 0.35 0.74 0.74 143 143 294.97 317.14 
12 58465.3 58489.3 0.41 0.41 0.87 0.88 143 143 329.70 355.12 
13 68965.3 68989.3 0.48 0.48 1.03 1.03 143 143 364.43 393.09 
14 76773.3 77797.3 0.54 0.54 1.15 1.16 143 143 399.15 431.07 
15 88581.3 89605.3 0.62 0.63 1.33 1.34 143 143 433.88 469.05 
16 100389.3 101413.3 0.70 0.71 1.50 1.52 143 143 468.61 507.02 
17 110697.3 111721.3 0.77 0.79 1.66 1.68 143 142 503.33 545.00 
18 121305.3 122329.3 0.85 0.86 1.82 1.84 143 142 550.94 595.63 
19 133113.3 134137.3 0.93 0.95 1.99 2.04 143 141 598.55 646.26 
20 148221.3 149245.3 1.04 1.06 2.22 2.27 143 141 646.16 696.89 
82 
 
21 161529.3 162553.3 1.13 1.15 2.42 2.47 143 141 693.78 747.52 
22 176337.3 177361.3 1.23 1.26 2.64 2.69 143 141 741.39 798.15 
23 194145.3 193669.3 1.36 1.37 2.91 2.94 143 141 789.00 848.79 
24 210453.3 208477.3 1.47 1.48 3.15 3.16 143 141 836.63 899.42 
25 226761.3 222285.3 1.59 1.58 3.39 3.37 143 141 904.84 970.73 
26 242069.3 238093.3 1.69 1.69 3.62 3.61 143 141 973.05 1042.04 
27 260877.3 257401.3 1.82 1.83 3.90 3.91 143 141 1041.26 1113.35 
28 279685.3 276209.3 1.96 1.96 4.19 4.19 143 141 1109.47 1184.65 
29 299993.3 296517.3 2.10 2.10 4.32 4.33 143 141 1165.87 1250.53 
30 312301.3 309825.3 2.18 2.20 4.50 4.53 143 141 1222.28 1316.40 
31 332109.3 329633.3 2.32 2.34 4.78 4.82 143 141 1278.69 1382.27 
32 352917.3 350941.3 2.47 2.49 5.08 5.13 143 141 1335.10 1448.15 
33 373725.3 372249.3 2.61 2.64 5.38 5.44 143 141 1391.51 1514.02 
34 394033.3 393057.3 2.76 2.79 5.68 5.74 143 141 1447.92 1579.89 
35 413841.3 412865.3 2.94 2.93 6.05 6.03 141 141 1504.35 1645.76 
36 434649.3 433673.3 3.08 3.08 6.35 6.34 141 141 1569.22 1710.64 
37 456957.3 455981.3 3.26 3.23 6.72 6.66 140 141 1634.10 1775.52 
38 475765.3 473789.3 3.40 3.36 7.00 6.92 140 141 1698.98 1840.39 
39 495573.3 494597.3 3.57 3.51 7.34 7.23 139 141 1763.85 1905.27 
40 512881.3 517905.3 3.69 3.67 7.60 7.57 139 141 1828.73 1970.14 
41 533689.3 541213.3 3.84 3.84 7.91 7.91 139 141 1893.60 2035.02 
42 549997.3 560021.3 3.96 3.97 8.15 8.18 139 141 1967.61 2311.70 
  
 
 
83 
 
Appendix 7:  
Market Price information on domestic and imported chicken  
Chicken meat by origin  Price of dressed chicken (GHS) Price of live chicken 
Ghanaian chicken  14.00 11.00 
Brazilian chicken  8.00 - 
US chicken  9.50 - 
  
84