The hold‐up problem in China's broiler industry: Empirical evidence from Jiangsu Province

Abstract

Using detailed survey data on broiler growers, we tested for the existence of holdup problems in the broiler industry in Jiangsu Province, China. We found that growers' investments in chicken houses, which are assets with a high degree of physical and location specificity, increased along with the number of potential buyers (integrators) nearby. Such an effect was particularly strong in proximity to leading industry buyers. These results support the existence of hold-ups in the Chinese broiler industry. However, we failed to find evidence that a longer-term contract led to higher grower investments in chicken houses, possibly because of the lack of a minimum purchase guarantee in a typical contract. A key policy implication of this study is that subsidies to growers, from the government or buyers, can alleviate the underinvestment problem caused by hold-ups.

Dynamic impacts of public health events on price fluctuations in broiler industry Chain in China: Evidence from COVID-19 epidemic

“…Similarly, broiler consumption in China reached 20.904 million tons, a 6.7% increase from the previous year. Therefore, stabilizing broiler prices not only protects the standard of living of the population, but also promotes the sustainable development of the broiler industry [ 5 , 6 ].…”

Essays on Antibiotic Awareness and Antibiotic Use among Farmers in East China

“…Jiangsu Province has a well-developed animal farming industry, with annual poultry output ranking ninth in China (China Yearbook, 2020). In Jiangsu, contract farming is a predominant form for farmers engaged in rearing chickens, which reduces the risks for broiler farmers due to price fluctuations and access to markets (Tang et al, 2021).…”

“…The Chinese Ministry of Agriculture (2018) aims to reduce antibiotic use in animal farms through educating farmers on the rational use of veterinary antibiotics, reducing the use of growthpromoting antibiotics, and promoting the use of alternatives to antibiotics. Our research area is in Jiangsu Province in East China, where antibiotic pollution from poultry farming is severe (Wei et al, 2011;Chen et al, 2015;Guo et al, 2016) and contract farming is a predominant arrangement for rearing broilers (Tang et al, 2021). The local agricultural department encourages the poultry companies to motivate their contract farmers to reduce antibiotic use, serving as a pilot of national measures to reduce the use of antibiotics in agriculture (Jiangsu Provincial Commission of Agriculture, 2018).…”

“…Contract farming is a predominant institutional arrangement for poultry farming in Jiangsu (Tang et al, 2021). In this study, we selected a poultry company in Jiangsu that integrates broiler breeding and trading, and cooperative production with the contract farmers.…”