Production efficiency analysis of indigenous pig production in Northwest Vietnam

UR 213.71 
per litter, while the profit decreased to EUR 
75.46 per litter if farms only concentrated on the 
phase of farrow-to-nursery. However, the rate of 
return in the farms that mixed both phases (0.35) 
was higher than the farms only undertaking one 
phase, i.e., farrow-to-finish (0.28) or farrow-to-
nursery (0.17). Also, the gross ratios of the three 
types of farms were 0.74, 0.78, and 0.85, 
suggesting that for every EUR 1 return from the 
pig production system, EUR 0.74, EUR 0.78, and 
EUR 0.85 were spent by the farmers in the 
mixed, farrow-to-finish, and farrow-to-nursery 
farms, respectively. This implies that pig 
producers from mixed farms used inputs more 
efficiently than others. 
Parameters of the production factors 
Parameters estimated from the stochastic 
frontier production function are presented in 
Table 4. The results revealed that the coefficients 
of most of the inputs were statistically significant 
at different levels, except for the health care 
costs. The coefficient of labour was positive with 
a value of 0.07, which was significant at 10%. 
This means that a 1% increase in the man-day 
increased the total revenue by 0.07% when other 
factors were kept constant. This finding is in line 
with research on the profitability and technical 
efficiency of pig production in Ekiti State 
(Aminu and Akhigbe-Ahonkhai, 2017), and the 
study on efficiency in small-scale pig production 
in Akwa Ibom State (Etim et al., 2014). The 
Production efficiency analysis of indigenous pig production in Northwest Vietnam 
888 Vietnam Journal of Agricultural Sciences 
Table 3. Average costs, returns, and profitability of Ban pig production in EUR/Litter in farms focused on the phases of farrow-to-
nursery, farrow-to-finish, or a mixture of both 
Variable Farrow-to-nursery Farrow-to-finish Mixed farm 
Total revenues (TR) 488.64 986.13 786.91 
Variable costs (VC) 403.18 753.11 561.20 
- Feed costs 301.30 619.09 439.88 
- Labour costs 90.15 121.36 109.56 
- Medication costs 7.06 7.35 6.89 
- Other costs 4.67 5.31 4.87 
Fixed costs (FC) 13.80 19.32 21.25 
Total costs TC 416.98 772.43 582.45 
Gross margin (GM) 85.46 233.03 225.71 
Net revenues (NR) 71.66 213.71 204.47 
Return rate (RR) 0.17 0.28 0.35 
Benefit-cost ratio (BCR) 1.17 1.28 1.35 
Gross ratio (GR) 0.85 0.78 0.74 
coefficient of the feeding cost was 0.27, which 
was significant at 1%, indicating that every 1% 
increase in the feeding cost raised the total return 
by 0.27%. The large elasticity of feed costs is an 
indicator of the importance of concentrates in pig 
production. These results conform to prior 
studies by Adetunji & Adeyemo (2012) and Etim 
et al. (2014). The health care costs had a negative 
coefficient but was not significant, even at the 
10% level. 
The elasticity of the stocking density was 
0.03 and positively significant at the 10% level, 
suggesting that a 1% increase in the stocking 
density increased output by 0.03%. In contrast, a 
significant negative coefficient of the stocking 
density was reported in pig production in Akwa 
Ibom State (Etim et al., 2014). The positive value 
of the stocking density coefficient in this study 
suggested that increasing the stock of animals 
tended to increase the timeliness of resources 
used, as a result leading to an increase in 
technical efficiency. 
Additionally, the type of pigpen and 
operation had significant impacts on the total 
revenue of pig production. The production 
elasticity concerning the pigpen style was 
positive with a value of 0.04 and significant at 
5%, indicating that the better the pigsty 
conditions, the higher revenue farmers earned 
from pig production. The coefficient of farms 
with the phase farrow-to-nursery was negative, 
while farms focused on the farrow-to-finisher 
phase had a positive coefficient, and both were 
significant at the 1% level. The elasticity of -0.30 
implied that the farrow-to-nursery farms tended 
to get 0.30% less in total revenue than the mixed 
farms. In contrast, higher output (0.10%) were 
achieved for farms with farrow-to-finisher 
compared with the mixed farms. 
Determinants of technical efficiency in Ban 
pig production 
The estimated coefficients of the 
inefficiency model are listed in Table 4. The 
coefficient of the nursery interval (0.01) was 
positive and significant at the 5% level, 
suggesting that technical inefficiency effects 
increased with an increase in the nursery interval.
Tran Ba Tuan et al. (2020) 
https://vjas.vnua.edu.vn/ 889 
Table 4. Coefficient, standard error, and Z-value of parameters estimated from the stochastic frontier production function for Ban pig 
production 
Variable Parameter Coefficient Standard error Z value 
Production function 
Constant term β0 4.91
*** 0.21 23.03 
Labour β1 0.07
* 0.04 1.78 
Feeding costs β2 0.27
*** 0.03 8.35 
Health care costs β3 -0.002
ns 0.003 -0.77 
Stock density β4 0.03
* 0.02 1.66 
Pigpen structure βpp 0.04
** 0.02 2.09 
Farrow-to-nursery βD1 -0.30
*** 0.03 -8.64 
Farrow-to-finisher βD2 0.10
*** 0.04 2.73 
Inefficiency model 
Constant term δ0 1.06
ns 1.69 0.63 
Age δ1 0.004
ns 0.02 0.20 
Education level δ2 0.001
ns 0.05 0.01 
Disease frequency of piglets δ3 0.02
ns 0.25 0.08 
Nursery interval δ4 0.01
** 0.05 2.21 
Number of live-born piglets δ5 -0.78
*** 0.2 -3.96 
Depreciation cost δ6 -0.04
** 0.02 -1.99 
Vaccination for piglets δ7 -0.47
ns 0.43 -1.10 
Log-likelihood function 86.20 
 Note: *, **, and *** show statistical significance levels at 10%, 5%, and 1%, respectively; ns: no statistical significance. 
Hence, every one-day increase in the nursery 
interval declined output by 0.01% in Ban pig 
production. The results also revealed that 
technical inefficiency was reduced with an 
increase in the number of live-born piglets per 
litter. This suggests that the farms that had a 
higher number of live-born piglets per litter 
achieved a higher level of technical efficiency. 
The variable depreciation had a coefficient of -
0.04 and was significant at the 5% level, 
indicating that technical efficiency rose with an 
increase in the expenditures for housing and 
equipment in pig production. Consequently, this 
points to the importance of investments in 
accommodations in Ban pig production. 
Interestingly, the coefficient of age and 
education level of the household’s head in this 
research was not statistically significant even at 
the 10% level as reported in the previous studies 
by Adetunji & Adeyemo (2012), and Aminu & 
Akhigbe-Ahonkhai (2017). 
Distribution of respondents by technical 
efficiency 
The specific level of technical efficiency for 
pig producers obtained from the stochastic 
Production efficiency analysis of indigenous pig production in Northwest Vietnam 
890 Vietnam Journal of Agricultural Sciences 
frontier model is presented in Table 5. 
Substantial differences in technical efficiency 
scores among Ban pig producers were identified. 
The predicted levels of technical efficiency for 
each farm ranged from 0.62 to 0.98, with a mean 
of 0.88, which agreed with the previous findings 
by Aminu & Akhigbe-Ahonkhai (2017) but were 
lower than the estimations by Etim et al. (2014) 
and Umeh et al. (2015). Two-thirds of the farms 
(78%) operated at levels of technical efficiency 
below 0.95, while 22% of the pig producers 
achieved levels of technical efficiency from 0.95 
to 0.98. This indicated that none of the pig farms 
could produce on the frontier of the pig 
production function. In contrast, Ly et al. (2016) 
reported that 8% of households were fully 
efficient. 
The average technical efficiency of pig 
breeders was 0.88, suggesting that the Ban pig 
farmers in northwest Vietnam were producing at 
88% of their potential production levels. 
Therefore, on average, the level of technical 
efficiency could be increased by 12% for the Ban 
pig producers through efficiently utilizing 
available resources with the current state of 
technology. The least efficient producer could 
save costs by 35% (1-63/98) if production could 
be as efficient as the farm with the maximum 
technical efficiency. 
Conclusions 
The profitability and technical efficiency of 
Ban pig production in northwest Vietnam were 
estimated using the cost-benefit analysis and the 
stochastic frontier production function. Inputs 
were utilized the most effectively by the mixed 
farms, while farms focused on the farrow-to-
finisher phase attained the highest net returns. 
The production inputs, e.g., feeding costs, labour, 
stocking density, and pigpen style, contributed 
positively to the output from the Ban pig 
production. Farms focused on the farrow-to-
finisher phase achieved the highest economic 
efficiency, while the farms with the farrow-to-
nursery phase had the lowest economic 
efficiency. 
The main factors that affected technical 
efficiency in indigenous pig enterprises were 
nursery interval, number of live-born piglets, and 
the investments in housing and equipment. The 
findings of the present study revealed that all of 
the pig farms operated below the frontier 
threshold. The results showed that on average, 
the technical efficiency of Ban pig producers 
could be raised by 12% through improving 
managerial skills, housing, and equipment for pig 
production. Therefore, the local extension 
organizations should provide training courses on 
pig production management for the breeders to 
increase technical efficiency. 
 Table 5. Efficiency distribution of the Ban pig producers 
Technical efficiency level Frequency Percentage 
0.62 - 0.80 30 17 
0.81 - 0.90 60 35 
0.91 - 0.94 44 26 
0.95 - 0.98 37 22 
Minimum efficiency 0.62 
Maximum efficiency 0.98 
Mean efficiency 0.88 
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Acknowledgments 
We are thankful for the communities in the 
research areas in Van Ho district (Son La), Tan 
Lac district (Hoa Binh), and Mu Cang Chai 
district (Yen Bai) for sharing their knowledge 
on their pig farming and allowing us to work 
with them. 
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