Production efficiency analysis of indigenous pig production in Northwest Vietnam

ISSN 2588-1299  
VJAS 2020; 3(4): 882-891  
Vietnam Journal  
of Agricultural  
Sciences  
Production Efficiency Analysis of Indigenous  
Pig Production in Northwest Vietnam  
Tran Ba Tuan1, Tong Yin2, Tran Huu Cuong3, Nguyen Cong  
Tiep4 & Sven König2  
1North Vietnam College of Agriculture and Rural Development, Hanoi 134000, Vietnam  
2Institution of Animal Breeding and Genetics, Justus Liebig University Gießen, Gießen  
35390, Germany  
3Faculty of Accounting and Business Management, Vietnam National University of Agriculture,  
Hanoi 131000, Vietnam  
4Faculty of Economics and Rural Development, Vietnam National University of  
Agriculture, Hanoi 131000, Vietnam  
Abstract  
This research was conducted to investigate the production efficiency  
of Ban pig production in northwest Vietnam between October 2016  
and January 2017. Primary data obtained from 171 producers were  
analyzed by applying cost-benefit analysis and stochastic frontier  
production function. The benefit-cost ratio per litter was 1.24,  
indicating that the enterprise was profitable. Compared to other  
farms, the farms focused on farrow-to-finisher attained the highest  
net return (EUR 213.71/litter), while inputs were used most  
effectively by the mixed farms. The results from the Cobb-Douglas  
production function revealed that labour, feeding costs, stocking  
density, and pigpen structure had positive effects on the production  
output. Additionally, farms with the phase of farrow-to-nursery  
obtained less total revenue, while farms focused on the farrow-to-  
finisher phase achieved higher production outputs than the mixed  
farms. The level of technical efficiency for each farm ranged between  
0.62 and 0.98, with a mean of 0.88. The number of live-born piglets  
and depreciation cost had positive effects, whereas the nursery  
interval had a negative impact on the technical efficiency. Ban pig  
producers could increase technical efficiency by efficiently utilizing  
available resources and improving managerial skills.  
Keywords  
Stochastic frontier, economic efficiency, indigenous pig, production,  
North-west Vietnam  
Introduction  
Accepted: June 18, 2020  
Accepted: October 7, 2020  
The availability of different domesticated animals, e.g., pigs,  
cows, sheep, and chickens, enriches the household economy because  
livestock production is a significant element of livelihood strategies  
for the poorest people in the world (Anderson, 2003). In Vietnam, pig  
Correspondence to  
Vietnam Journal of Agricultural Sciences  
882  
Tran Ba Tuan et al. (2020)  
production plays a substantial role in livestock  
husbandry, and pork production accounted for  
75.9% of the total meat production in 2013  
(Dzung, 2014). Pigs are well known for their  
ability to convert different kinds of rough feed,  
including kitchen waste, to protein (Rahman et  
al., 2008). Additionally, pigs offer early  
maturity, a short generation interval, and  
relatively small space requirements (Ezeibe,  
2010). The pig sector is an integral part of  
mixed farming systems (VAC) in Vietnam as a  
way to utilize household leftover food and  
agricultural byproducts. ACIAR-ILRI-CAP  
(2008) and Hung et al. (2015) reported that the  
pig sector contributes to about 14% of the total  
household income and 25% of the total  
household income from agriculture. Pig  
production is an efficient way to improve protein  
utilization because, compared to cows, sheep,  
and goats, pigs grow faster and are more  
productive (Etim et al., 2014). In northwest  
Vietnam, one of the main development  
opportunities for small holders under conditions  
of increasing land scarcity and environmental  
degradation is pig production.  
to households, e.g., land, labour, and feed  
produced from agricultural products. Therefore,  
farmers have to utilize their resources as  
efficiently as possible. Efficiency is one of the  
crucial elements influencing productivity  
growth, especially in agricultural economic  
development, where resources along with  
opportunities for developing and adopting  
technology are limited (Ali & Chaudhry, 1990).  
The term efficiency of a farm can be defined  
as its ability to provide the largest possible  
amount of output from a given set of inputs  
(Palmer and Torgerson, 1999). The stochastic  
frontier is a helpful tool to approximate  
production efficiency in agriculture. This model  
was introduced by Aigner et al. (1977),  
Førsund et al. (1980). The principle of this  
model is based on the concept of the production  
function, depending on the relationship between  
the set of inputs and the set of outputs in  
production. From the classical perspective,  
producers produce the maximum achievable  
outputs based on a given technology and level  
of inputs. This is the definition of the production  
possibility frontier, which is identified by an  
optimal relationship between inputs and  
outputs, and the potentially sub-optimal  
production activities of the producers are  
modelled using the concept of technical  
efficiency. The definition of technical  
efficiency is the rate of the farm’s observed  
production and the optimal level of production  
at a given state of inputs and technology. The  
level of technical efficiency of a farm is  
identified by the relationship between the  
detected production and potential production.  
However, the stochastic frontier model’s major  
weakness is its failure to provide an explicit  
distribution assumption for the inefficiency  
term (Sharma et al., 1999).  
Pig production, especially of the indigenous  
pig (Ban pig), significantly contributes to the  
economic income, and social and cultural life for  
most communities in northwest Vietnam. Ban  
pigs can be readily converted into cash, which  
helps meet the regular financial demands of the  
households, such as expenditures for education  
and spending on basic daily necessities (Hung et  
al., 2017). As one of the cultural symbols, pork  
from the Ban pig is also an important food supply  
at traditional events. Furthermore, manure from  
pig production is an excellent source of fertilizer  
to enrich poor soils, and consequently, to  
improve plant cultivation for farmers. However,  
the development of Ban pig husbandry is  
hampered by diseases and lack of village  
veterinary staff, instability and fluctuations in  
prices, inadequate technical assistance from  
extension services, high-fat proportion, low  
growth rate, low fertility, and poor infrastructure  
facilities.  
Over the last few decades, stochastic frontier  
models have been widely used in agricultural  
2016). Capturing random variables that are  
beyond the producer’s control is the main  
advantage of this model because the estimation is  
Small-scale Ban pig production is a  
widespread pork production system in northwest  
Vietnam because of limited resources available  
883  
Production efficiency analysis of indigenous pig production in Northwest Vietnam  
more in accordance with the potential output  
under “normal” working circumstances (Belete  
et al., 2016).  
district); and Che Cu Nha, Khao Mang, Pung  
Luong (Mu Cang Chai district).  
The pig farms with at least one sow at the  
data collecting time were selected. The farms  
were chosen with the assistance of field  
extension officers from the Department of  
Agriculture. Veterinary staff of the communities  
were also included, especially in offering  
logistics. Recently, no censuses of Ban pig  
breeds have been carried out in the study areas.  
Hence, snowball sampling was used to identify  
the households that raised local pigs in the  
communities. This method was used previously  
in studies of Taenia solium cysticercosis  
(Sikasunge et al., 2007). The veterinary staff  
recognized the first few farmers who raised local  
pigs, and afterwards, other farms were found  
based on the information from the first farmers.  
Several studies were conducted to  
investigate productive efficiency in pig farming  
systems using the stochastic frontier production  
(2017). However, indigenous pig breeds were not  
considered in these studies. Hence, it is necessary  
to analyze the socio-economic factors  
influencing the economic efficiency of Ban pig  
production and identify the most efficient source  
from pig producers in the local farms.  
Specifically, the objectives of the present  
research were (1) to examine the costs and  
returns from the perspective of local Ban pig  
farmers; (2) to approximate the level of  
technical efficiency for Ban pig producers; and  
(3) to investigate the factors that influence the  
technical efficiency of Ban pig farms in  
northwest Vietnam. The findings in this study  
should be applied in the studied areas to  
improve the production efficiency of local  
breeds.  
Single-person interviews with a semi-  
structured questionnaire were conducted for 180  
native pig farmers distributed across nine  
communities in the three divisions from  
November 2016 to January 2017. The number of  
farms was 69, 49, and 62 in Van Ho, Tan Lac,  
and Mu Cang Chai, respectively, and they were  
approximately in line with the proportion of the  
total population size of pigs in each area in 2015  
(GSO Vietnam, 2016). The main features  
reflected in the interviews were socio-economic  
characteristics, management practices, labour  
use, availability of housing and equipment,  
capital, and output. A preliminary assessment of  
180 questionnaires led to deleting nine  
respondents because crucial information was  
missing for those respondents. As a result, 171  
farms were kept in the analyses.  
Materials and Methods  
Study area and data collection  
Fieldwork was conducted in three provinces,  
Son La, Hoa Binh, and Yen Bai, which contain a  
high density of commercial and local pigs, and  
are stratified into the three main climatic zones  
of the Northwest area. One district in each  
province was selected after consulting with  
official staff from the Department of Agriculture  
(Van Ho district - Son La, Tan Lac district - Hoa  
Binh, and Mu Cang Chai district - Yen Bai). In  
every district, three communes were chosen  
purposively based on the following two criteria.  
First, the study areas were crucial and high-  
intensity regions for Ban pig production. Then,  
to reduce logistic constraints for data collection,  
the selected regions were relatively easy to  
access. Hence, the study areas were Chieng  
Khoa, Van Ho, Long Luong (Van Ho district);  
Phu Cuong, Phu Vinh, Dich Giao (Tan Lac  
Data analysis  
The survey data were analyzed using Stata  
version 12. The stochastic frontier production  
function model was applied to estimate the level  
of technical efficiency and its determinants in  
Ban pig production. The descriptive statistics of  
the variables (Table 1), such as means, standard  
deviations, frequencies, and percentages, were  
used to interpret the socio-economic  
Vietnam Journal of Agricultural Sciences  
884  
Tran Ba Tuan et al. (2020)  
characteristics of the farmers, as well as the  
inputs and outputs of the local farms.  
(measurement error; environment, and diseases,  
etc.), it follows a normal distribution with  
N(0,σ2v); and ui is the one sided-error component  
that reflects technical inefficiency and is  
assumed to be independently and identically  
Cost-benefit analysis  
The cost-benefit analysis was applied to  
approximate the farm net revenue for Ban pig  
production systems. Theoretically, net revenue  
(NR) is the difference between the total revenue  
(TR) and the total costs (TC):  
distributed as  
a
half-normal distribution  
N+(0,σ2u).  
The technical efficiency (TE) of the ith  
sample farm can be estimated by:  
NR = TR − TC (1)  
(
)
y
i
i
i
i
TEi =  
=
F x ;β exp(v −u ) = exp(−ui) (9)  
( )  
F x ;β exp(v )  
i i  
Total cost is the accumulation of the entire  
variable costs (VC) and fixed costs (FC) items:  
∗
y
TE ranges from 0 to 1, indicating the  
minimum to the maximum level of technical  
efficiency.  
TC = VC + FC (2)  
The variable costs came mainly from the  
feeding costs, labour costs, and health care costs.  
Two functional forms, i.e., log-linear Cobb-  
Douglas and Translog production forms, can be  
applied for the stochastic frontier production  
function. In this paper, the log-linear Cobb-  
Douglas form was adopted. The model was:  
Total revenue was identified as the total  
amount of money that a producer received from  
the sale of fattening pigs and piglets:  
TR = ∑PnQn (3)  
lny = β0 + ∑βjlnxij + βppPPstructi +  
βD D1i + βD D2i + (vi − ui) (10)  
where P is the price per 1 kg live weight of the  
pig nth and Q is the live weight of the pig nth. The  
total revenue came mainly from the selling of  
nursery pigs, finisher pigs, and culled sows.  
1
2
where yi denoted the total revenue of pig  
production per litter (EUR); xij was the input  
quantities jth used by the ith pig farm, including  
labour (man/days), feeding costs (EUR), health  
care costs (EUR), and stocking density  
(animal/m2). PPstructi was the type of pigpen  
structure (1 for temporary, 2 for semi-permanent,  
and 3 for permanent); and D1i and D2i were  
dummy variables of operation. For D1i, values of  
1 were assigned for farms focused on the farrow-  
to-nursery phase, and 0 was given for other  
farms. For D2i, farms with the farrow-to-finishing  
phase were assigned as 1, and the other farms  
received a 0.  
Gross margin (GM) is the total revenue  
minus the total variable costs:  
GM = TR − VC (4)  
The return’s ratio was used to calculate the  
amount of return on an investment relative to the  
investment costs. It is presented by three  
formulas:  
Rate of returns (RR):  
RR = NR/TC (5)  
Gross ratio (GR):  
GR = TC/TR (6)  
The inefficiency model (ui) was specified as:  
Benefit-cost ratio (BCR):  
BCR = TR/TC (7)  
ui = δ0 + δ1Agei + δ2Edui + δ3DisPL  
+
i
δ4NurIni + δ5NumPig_Alivei + δ6CAP +  
i
The stochastic frontier production function  
δ7Vac_PLi (11)  
The general stochastic frontier production  
function can be defined as:  
where Age was the age of the farmer (in  
years); Edu was the educational level of the  
household’s head (in school years); Dis_PL was  
the disease frequency of the pigs (Dis_PL = 1, 2,  
and 3 for none, low, and high disease  
frequencies, respectively); NurIn was the nursery  
interval (in days); Numpig_Alive was the  
number of live-born piglets (in number); CAP  
(
)
yi = f xi; β exp(vi − ui) (8)  
where yi denotes the output of the ith sample  
farm (i =1, 2, …n); xi is a vector of the inputs  
used by the ith farm; β is a vector of the  
parameters to be estimated; vi represents a  
random error not under the control of the farmers  
885  
Production efficiency analysis of indigenous pig production in Northwest Vietnam  
was depreciation (in EUR); and Vac_PL was a  
vaccination for piglets (dummy).  
total cost per litter was EUR 510.99, and the  
average total revenue was EUR 634.64. The total  
cost consisted of the variable costs and the fixed  
costs, in which the average variable cost  
accounted for 97%, and the fixed cost accounted  
for 3%. Additionally, the feed costs variable was  
the most important because it covered the highest  
proportion of the variable costs of production  
(78%), followed by the labour costs of 20%, the  
health care costs of 1%, and other costs of 1%.  
The parameters of the log-linear Cobb-  
Douglas and inefficiency model were estimated  
simultaneously by the maximum likelihood  
method. The variables used in the model are  
listed in Table 1.  
Results and Discussion  
Costs and returns for pig production  
The average gross margin and the net  
revenue per litter were EUR 139.97 and EUR  
123.65, respectively. The rate of return on  
investments in Northwest Vietnam was 0.24,  
Table 2 shows the full information in detail  
about the costs, returns, and profitability of Ban  
pig production in the research area. The average  
Table 1. Descriptive statistics (standard deviation: SD; minimum: Min; maximum: Max) for revenue, inputs, production management,  
disease management, type of operation, and socio-economic information  
Variable  
Total revenues per litter  
Total net revenue per litter  
Labour  
Unit  
EUR  
Mean  
634.64  
123.65  
19.88  
281.59  
7.07  
Std. Dev.  
233.15  
131.11  
7.18  
Minimum  
278.60  
-227.82  
10  
Maximum  
1382.55  
597.96  
50  
EUR  
Man day  
EUR  
Feeding costs  
157.56  
7.27  
69.63  
0.00  
980.35  
39.80  
3.00  
Health care costs  
Stock density  
EUR  
Pigs/m2  
1.28  
0.68  
0.29  
Pigpen structure  
2.51  
0.77  
1.00  
3.00  
Farm location  
1.95  
0.85  
1.00  
3.00  
Age  
Years  
School years  
Days  
41.02  
5.72  
10.11  
4.09  
24.00  
0.00  
65.00  
12.00  
240.00  
10.60  
82.11  
3.00  
Educational level  
Nursery interval  
138.13  
7.47  
40.28  
1.10  
60.00  
5.20  
Number of live-born piglets  
Depreciation  
Number  
EUR  
16.32  
2.18  
12.72  
0.76  
0.84  
Disease frequency of pigs  
Vaccination for piglets  
Vaccination for sows  
Farrow-to-nursery operation  
Farrow-to-finisher operation  
Times  
1.00  
0.28  
0.45  
0.00  
1.00  
0.46  
0.50  
0.00  
1.00  
0.62  
0.49  
0.00  
1.00  
0.16  
0.37  
0.00  
1.00  
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886  
Tran Ba Tuan et al. (2020)  
Table 2. Average costs, returns, and profitability of Ban pig production in EUR/Litter  
Variable  
Amount (EUR)  
634.64  
494.67  
383.32  
99.46  
% of TC  
Total revenues (TR)  
Variable costs (VC)  
- Feed  
0.97  
0.78  
0.20  
0.01  
0.01  
0.03  
- Labour  
- Medication  
7.07  
- Other costs  
4.82  
Fixed costs (FC)  
Total costs (TC)  
Gross margin (GM)  
Net revenues (NR)  
Return rate (RR)  
16.32  
510.99  
139.97  
123.65  
0.24  
Benefit-cost ratio (BCR)  
Gross ratio (GR)  
1.24  
0.81  
indicating that for every EUR 1 invested, EUR  
0.24 was gained from pig production as a profit.  
This result is lower than that of studies on pig  
production in Ekiti State (Aminu & Akhigbe-  
Adeyemo 2012), where the rates of return on  
investments were 0.34 and 0.82, respectively.  
The benefit-cost ratio of 1.24 depicted that Ban  
pig production was a profitable business in  
northwest Vietnam as it was greater than one.  
The gross ratio was 0.81, implying that EUR 0.81  
was spent for every EUR 1 return in the  
production.  
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  
study on efficiency in small-scale pig production  
in Akwa Ibom State (Etim et al., 2014). The  
The differences in costs, returns, and  
profitability of pig production for farms among  
three types of operations are presented in Table  
3. The farms focused on the phase of farrow-to-  
finish achieved the highest profit of EUR 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  
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Production efficiency analysis of indigenous pig production in Northwest Vietnam  
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  
Total revenues (TR)  
Variable costs (VC)  
- Feed costs  
Farrow-to-nursery  
488.64  
403.18  
301.30  
90.15  
Farrow-to-finish  
986.13  
753.11  
619.09  
121.36  
7.35  
Mixed farm  
786.91  
561.20  
439.88  
109.56  
6.89  
- Labour costs  
- Medication costs  
- Other costs  
7.06  
4.67  
5.31  
4.87  
Fixed costs (FC)  
Total costs TC  
13.80  
19.32  
21.25  
416.98  
85.46  
772.43  
233.03  
213.71  
0.28  
582.45  
225.71  
204.47  
0.35  
Gross margin (GM)  
Net revenues (NR)  
Return rate (RR)  
Benefit-cost ratio (BCR)  
Gross ratio (GR)  
71.66  
0.17  
1.17  
1.28  
1.35  
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  
et al. (2014). The health care costs had a negative  
coefficient but was not significant, even at the  
10% level.  
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.  
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.  
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.  
Additionally, the type of pigpen and  
operation had significant impacts on the total  
Vietnam Journal of Agricultural Sciences  
888  
Tran Ba Tuan et al. (2020)  
Table 4. Coefficient, standard error, and Z-value of parameters estimated from the stochastic frontier production function for Ban pig  
production  
Variable  
Production function  
Constant term  
Parameter  
Coefficient  
Standard error  
Z value  
β0  
β1  
4.91***  
0.07*  
0.21  
0.04  
0.03  
0.003  
0.02  
0.02  
0.03  
0.04  
23.03  
1.78  
8.35  
-0.77  
1.66  
2.09  
-8.64  
2.73  
Labour  
Feeding costs  
β2  
0.27***  
-0.002ns  
0.03*  
Health care costs  
Stock density  
β3  
β4  
Pigpen structure  
Farrow-to-nursery  
Farrow-to-finisher  
Inefficiency model  
Constant term  
βpp  
βD1  
βD2  
0.04**  
-0.30***  
0.10***  
δ0  
δ1  
δ2  
δ3  
δ4  
δ5  
δ6  
δ7  
1.06ns  
0.004ns  
0.001ns  
0.02ns  
0.01**  
1.69  
0.02  
0.05  
0.25  
0.05  
0.2  
0.63  
0.20  
0.01  
0.08  
2.21  
-3.96  
-1.99  
-1.10  
Age  
Education level  
Disease frequency of piglets  
Nursery interval  
Number of live-born piglets  
Depreciation cost  
Vaccination for piglets  
Log-likelihood function  
-0.78***  
-0.04**  
-0.47ns  
86.20  
0.02  
0.43  
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  
Akhigbe-Ahonkhai (2017).  
Distribution of respondents by technical  
efficiency  
The specific level of technical efficiency for  
pig producers obtained from the stochastic  
889  
Production efficiency analysis of indigenous pig production in Northwest Vietnam  
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  
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.  
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.  
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.  
Table 5. Efficiency distribution of the Ban pig producers  
Technical efficiency level  
0.62 - 0.80  
Frequency  
Percentage  
30  
60  
44  
37  
17  
35  
26  
22  
0.81 - 0.90  
0.91 - 0.94  
0.95 - 0.98  
Minimum efficiency  
Maximum efficiency  
Mean efficiency  
0.62  
0.98  
0.88  
Vietnam Journal of Agricultural Sciences  
890  
Research and Investment. 1: 48-54.  
Acknowledgments  
Førsund F. R., Lovell C. K. & Schmidt P. (1980). A survey  
of frontier production functions and of their  
relationship to efficiency measurement. Journal of  
Econometrics. 13: 5-25.  
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.  
GSO (General Statistical Office) (2016). Statistical  
Yearbook Vietnam 2015. Statistical Publishing House,  
Hanoi, Vietnam.  
Hung P. V., Nga N. T. D. & Lapar L. (2015). Improving the  
livelihood of small farmers in the pig value chain:  
Experiences in the north of Vietnam. Regional seminar  
on "Agriculture Development for the Mekong Delta:  
How to Increase the Livelihood of Farmers", Can Tho  
City, Vietnam, April 24, 2015. Hanoi, Vietnam:  
Vietnam National University of Agriculture.  
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