AN ESTIMATION OF PROFIT AND COST FUNCTION AND ECONOMIC EFFICIENCY OF BROILER PRODUCTION PROJECTS IN THE MIDDLE OF IRAQ (A CASE STUDY) FOR 2019

Abstract

This study aimed to estimate the profit and cost functions as well as economic, price, cost, and technical efficiencies besides the other economic indices at actual, optimal and profit-maximizing production of broiler projects. A random sample of 84 fields was selected from total 524 in central Baghdad (Qadisiyah, Babil and Wasit) province during 2019. From efficiency scales of profit function, it was shown that the production price had the greatest impact on the profit compared to other variables (average production costs and production quantity). According to the cost function, the optimal cost-minimizing production level was 21.54 ton. This average is greater than that of actual production (18.27 tons) by 3.27 tons. Economic analysis showed the product level which maximizes the profit was 28.02 tons which was higher than the optimal production level (21.54) by 6.94 tons. As for technical efficiency, it reached 84.82%, while cost efficiency was 0.85. This implies that resources were not optimally exploited. From these results, it can be concluded that government support is required for productive inputs, through facilitating loans, preventing poultry importing, and adoption of strategic policy for the agricultural sector in general and poultry production in particular.