Author : Bui Van Quang

Summary : Pig production is considered a major source of livelihood in Nghe An Province,
Vietnam since it is its highest-grossing livestock commodity. At present, swine production
in the province is undergoing transitions in scale, from small- to large-scale production,
and in location, from residential to those outside residential areas. To encourage hog
production development, the government has enacted policies that focus on expanding
production scale and improving efficiency. However, studies on current economic
efficiency and returns to scale levels of pig production are limited. This study provides
information on economic efficiency level, returns to scale, and factors affecting efficiency
that could serve as reference for producers and policymakers.

Primal system approach was utilized to estimate cost efficiency. A total of 186 pig
producers from three Nghe An districts were interviewed. Variables used in estimation
included the following: Output (y) measured in terms of average weight of pig sold during
the last cycle, average quantity of feeds per pig (FEE), average weight of piglets grown
(BREE), and average of man-day labor per pig (LAB); average price of feeds (wi); average
price of piglets (wb); and average wage rate (wl).

Results showed that the variable average weight of piglets exhibited the highest
efficiency in terms of input use, followed by the average quantity of man-day, and average
amount of feeds. Both Marginal Rate of Technical Substitution (MRTS) ofbreedlfeed and
breedllabor were lower than the cost minimizing ratios. Meanwhile, the economics of scale
analysis indicated that, in general, pig producers experienced increasing returns to scale
(IRS) with a mean level of2.7l. The inefficiency of pig producers in cost minimization is
mainly driven by inefficiency in input allocations. On the average, costs increased by
73.7%, owing to a 73.6% allocative inefficiency and 0.48% technical inefficiency.
Regarding the impacts of socioeconomic indicators on efficiency, results indicated that
farmers' engagement in trainings and access to veterinary services improved efficiency.