Coordination for contract farming supply chain with stochastic yield and demand under CVaR criterion

Ye, Fei; Lin, Qiang; Li, Yina

doi:10.1007/s12351-017-0328-3

Cited by 51 publications

(51 citation statements)

References 30 publications

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“…In another study, Ye et al . () show that contract farmers decrease production quantity (focus on quality) as farmers face higher yield uncertainty and subsequently increase the retail price in the market.…”

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confidence: 99%

Impact of contract farming on yield, costs and profitability in low‐value crop: evidence from a low‐income country

Mishra

Kumar²,

Joshi³

et al. 2018

Aus J Agri & Res Econ

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Lentils, a low‐value and highly nutritious crop, are Nepal's largest pulse cash crop. However, the majority of the nation's smallholders produce lentils on very small plots of land. The large gap in lentil yields between Nepal and other lentil‐producing countries underscores the importance of improving yields and income of smallholders. When it comes to the financial viability of small farms, particularly in developing countries, and globalisation, contract farming (CF) may prove useful in achieving efficiency and profitability in smallholder lentil farms in Nepal. This study employs the propensity score matching approach to examine the effects of the adoption of CF on yields, profitability and costs of smallholder lentil farms in Nepal. Findings from this study reveal that contrary to popular belief, CF adoption by lentil producers in Nepal has a positive and significant effect on per‐hectare revenues, profits and yield and a negative impact on variable and transportation costs. The study finds that only very smallholder lentil farms (0.01‐0.05 ha) benefit from CF.

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mentioning

confidence: 99%

Impact of contract farming on yield, costs and profitability in low‐value crop: evidence from a low‐income country

Mishra

Kumar²,

Joshi³

et al. 2018

Aus J Agri & Res Econ

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“…This paper studies the coordination of two-level agricultural products supply chain system consisting of a single company and a single farmer in developing economies. Our work extends the study of supply chain coordination and agricultural products supply chain risk management, including Ye et al [4], Zhao and Wu [5], and Chen and Yano [8]. Taking stormy weather as an example, we analyze the impact of severe weather on the optimal decision making and performance of the company and the farmer.…”

Section: Discussionmentioning

confidence: 91%

“…Ye et al design an RPG (revenue sharing + production cost sharing + guaranteed money) mechanism to facilitate the coordination of contract farming supply chain under stochastic yield and demand [4]. Our work differs from Ye et al [4] in the following aspects. First, we focus on investigating the effects of disastrous weather on optimal decisions and coordination mechanism, whereas they focus on the uncertainty of demand and yield on optimal decisions and coordination mechanism.…”

Section: Literature Reviewmentioning

confidence: 92%

“…Our work is most closely related to three of these studies, including Ye et al [4], Zhao and Wu [5], and Chen and Yano [8]. Ye et al design an RPG (revenue sharing + production cost sharing + guaranteed money) mechanism to facilitate the coordination of contract farming supply chain under stochastic yield and demand [4].…”

Section: Literature Reviewmentioning

confidence: 97%

“…In 2008, China suffered from low temperature, sleet, and freeze disaster and the affected arable land reaching 1431.8 × 10 4 hectares, resulting in a loss of crop yield of 197.1 × 10 4 hectares [3]. On the other hand, agriculture in developing economies tends to be dominated by small-scale farmer economies, and weather changes bring huge challenges to the agricultural production activities of "small farmers and big markets" [4]. Especially, the frequent severe weather such as heavy rain and cold wave will not only directly affect the production of upstream farmers in the agricultural products supply chain but also make downstream agriculture-related companies face a challenge: How to match a random output with random demand?…”

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Risk Transfer Mechanism for Agricultural Products Supply Chain Based on Weather Index Insurance

et al. 2018

Complexity

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The risk management for agricultural products supply chain is more complex than that for typical manufacturing supply chain. Agricultural production is vulnerable to severe weather such as heavy rain, cyclones, and cold wave, which challenges the matching of random output with random demand for agricultural products supply chains. The goal of this paper is to design an effective risk transfer mechanism for managing severe weather risks so as to ensure the stable operation of the agricultural products supply chain. We study the coordination of two-level agricultural products supply chain with a single company and a single farmer under the influence of severe weather. Taking rainstorm weather as an example, this paper designs a risk transfer mechanism based on weather index (rainfall) insurance: "rainfall index insurance + revenue sharing + risk transfer fee." It is found that this risk transfer mechanism can overcome distortion of the farmer's agricultural investment level under the influence of severe weather. When the contract parameters meet certain conditions, using the risk transfer mechanism can achieve the supply chain coordination and a win-win situation. More importantly, weather change does not affect the Pareto improvement of the company and the farmer under the risk transfer mechanism. In addition, we also find that the company can incentivize the farmer to purchase weather index insurance and use the insurance market to shift the severe weather risk encountered during the agricultural production to protect the company's and farmer's income and the stable operation of the supply chain.

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Digital technology adoption strategies for a contract farming supply chain under CVaR criterion

Liao,

2024

Manage Decis Econ

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This study considers a contract farming supply chain consisting of a platform and a risk‐averse farmer with yield uncertainty. It establishes game theory models with and without digital technology under CVaR criterion and analyzes three digital cooperation mechanisms. We find that when the wholesale price is moderate, both parties will choose a cost‐sharing contract; when the wholesale price is high, both parties will choose to let the farmer bear the cost of digital investment; when the farmer uses digital technology to grow agricultural products, the platform should not provide the farmer with a low wholesale price, especially for the farmer with low risk aversion.

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Coordination for contract farming supply chain with stochastic yield and demand under CVaR criterion

Cited by 51 publications

References 30 publications

Impact of contract farming on yield, costs and profitability in low‐value crop: evidence from a low‐income country

Impact of contract farming on yield, costs and profitability in low‐value crop: evidence from a low‐income country

Risk Transfer Mechanism for Agricultural Products Supply Chain Based on Weather Index Insurance

Digital technology adoption strategies for a contract farming supply chain under CVaR criterion

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