| Since the 21 st century,agriculture,rural areas and farmers has always been one of the focuses of central government,and the key issues relating to agriculture is agricultural supply chain finance.To support agricultural production,the government has issued a series of policies to provide subsidies to farmers to promote agricultural production,guarantee household income and help them break down the financial constraints and enhance their financial situations.Nevertheless,the policies did not exert a satisfactory effect,funding problems in rural area still exists.And the reasons can be described as follows: China’s rural financial market has serious problem of information asymmetry,high transaction cost and high bad loans,which caused farmers lack collateral and difficult to obtain loans from formal financial institutions.In addition,the basic way of solving the problem of financing predicament of farmers is the rise of income and advance in agricultural economy.However,the existing rural financial reform is hard to promote the commercialization and sustainability of agricultural transformation,let alone helping smallholder farmers move up the supply chain(higher value-added).Bearing in mind the principle of "teaching one to fish is better than giving him fish",we try to establish the agricultural supply chain finance mode to improve the profitability of farmers.Although the agricultural supply chain finance is derived from un-farming area,there are essential differences between agricultural supply chain finance and other supply chain finance(such as manufacturing supply chain finance,etc.)in transaction cost,information transmission and production risk.Therefore,it should be treated differently from the general supply chain finance.In addition,unlike other supply chain,the weak part of the agricultural supply chain is the upstream,which needs companies or intermediary organizations to conduct effective market-production base docking in the pre-production and post-production.The operational organizations united by contracts have become the main form of agricultural integration.The connotation of supply chain finance is to use the transaction relationship of supply chain and closed,self-compensatory characteristics of capital flow to improve the integration,collaboration and risk pooling of supply chain.This paper constructs supply chain finance in agricultural field based on the transaction relationship between farmers and core enterprises in agricultural supply chain.The company participates the process of production and sales in agricultural supply chain by structural embedment and resource integration,which not only provides convenience for farmers,but also provides new ideas and methods for financing.In contract-farming supply chain mode,farmers bears production,operation and financing costs;In alliance contract mode,the company and farmer shares benefits and costs;Under the mode of land dividends,farmers and companies form an industrial consortium and sells agricultural products jointly to the external market;In the land rental mode,companies takes full responsibility for the operation in organizing business,management and decision-making.In addition,government subsidies can serve as an implicit guarantee mechanism to lower financing costs,so the synergistic effect of government subsidies is considered under the context of capital constraints.The specific contents are as follows:(1)Supply chain financing and operational decisions under the contract-farming.Contract-farming is a mode of agricultural production and operation that has emerged in recent years.The cooperation model between company and farmers is not limited to companies purchase agricultural products according to the order contract.With the trade credit become an effective way to solve the financing difficulty in agricultural supply chain,in the early stage of agricultural production,company will also provide financial support.In order to support farmers to develop agricultural production,the government provides various kinds of subsidy funds to farmers to help them break the financial constraints and enhance their ability to raise funds,bear risks and absorb technologies.We develop a two-echelon contract farming supply chain to analyze the optimal production inputs and interest rate decisions between each benefit in supply chain organization,address issues of which subsidy program to select.It is found that: Compared with non-subsidy in the same circumstances,subsidy always motivates farmers to plant more acres and bring down borrowing costs of farmers.(2)Supply chain financing and operational decisions under the contract of alliance.In alliance contract agriculture,the company and farmer builds up a contract of risk and benefit sharing.The results show that compared with alliance contract,the input-output ratio of subsidy under the target price protection program is higher in contract-farming,which is beneficial to the corresponding regions of agricultural products conducts price protection program(such as Bole City of Xinjiang,Yecheng county,etc.).To make higher input-output ratio of resource under the target price protection program,the farmer can joining contract-farming.Although alliance contracts can alleviate double marginal,improve farmers’ production input,it brings heavy financial burden to government.(3)Supply chain financing and operational decisions under the contract of land dividend.By embedding in agricultural supply chain,agricultural social enterprises can help farmers in two ways.On the one hand,they provide initial capital to farmers to negotiate the difficulties of funding into production;on the other hand,agricultural social enterprises offer producer services by establishing a revenue-sharing mechanism to bundle interests with farmers.In production process,agricultural social enterprises smoothed agricultural production by sharing production costs with farmers to achieve the goal of maximizing social welfare.Although agricultural social enterprises have the attributes of social enterprises,they also have specific economic goals and realized economic goals through the income sharing by farmers at the end of sales.It is found that compared with non-subsidy,target price protection and area subsidy always motivate farmers to plant more acres.Compared with the area subsidy,target price protection takes the average price level as the dynamic target subsidy price basis,linking the subsidy amount with the market price of agricultural products,which makes the subsidy more targeted and can achieve greater social welfare.The area subsidy can always improve farmers’ income and production input by adjusting the subsidy standard.Still,the area subsidy is specific for some agricultural products such as corn and soybean.In addition,the policy goal is to adjust corn and soybean planting area in a certain period.If the goal is achieved,whether the area subsidy is suitable for the subsequent policy goals needs further consideration.(4)Supply chain financing and operational decisions under the contract of land rental.Agricultural crowdfunding is a new business mode in which agricultural production organizations act as initiator of crowdfunding projects,aggregate geographically dispersed fundraisers through crowdfunding platforms and then produced according customer demand.Compared with the traditional circulation mode of agricultural products,the circulation of crowdfunding for agricultural products omits the intermediary wholesalers and resellers,realizing direct sales from farm to family.From the perspective of consumers,pre-sale crowdfunding for agricultural products can effectively make use of the Internet crowdfunding platform to meet consumers’ increasing demand for green and natural agricultural products.From the perspective of the initiators,pre-sale crowdfunding for agricultural products can not only effectively solve the problem of low efficiency of the traditional sales and circulation mode of agricultural products,but also make initiators have easy financing.Agricultural crowdfunding is developing rapidly in China,but most of them have to face the problems such as small-scale business and low success rate,thus proper production and pricing policies is an important factor in the successful of the project.In this paper,we discuss the optimal production and pricing policies in the pre-order crowdfunding of strategic consumers under yield uncertainty and compares the optimal strategies under the AON and KIA mechanisms.It is shown that,when the target financial amount is high,the initiator not only can gain more profit but also can reach a higher pre-sale price under the KIA mechanism.Therefore,initiator can set a higher target financial amount when they adopt the KIA mechanisms.Otherwise appropriate financing target amount should be set to guarantee a certain amount of revenue.In this paper,we combined the random output of agricultural products with the contract agriculture mode which have singularly Chinese characteristics.To solve the financing difficulties in the supply chain,we design an agricultural supply chain composed of multiple farmer with financial constraints and a single firm according to the resource endowment of core enterprises in different contract modes.In addition,to support agricultural production,the government has issued a series of policies to provide subsidies to farmers.So compared with the previous research of agricultural supply chain finance,this research possesses great innovation and pertinence,and has significant theoretical meaning and practical value.Firstly,this study develops a model of a contract-farming supply chain consists of multiple farmers with financial constraints and a single firm with sufficient capital with yield uncertain,which have enriched the theoretical model of agricultural supply chain.The previous literature about internal financing in supply chain mostly consists of a single farmer with financial constraints and a single firm with sufficient capital.But in practice,multiple farmers obtains loans from a single company.We develop a model of a contract-farming supply chain consists of multiple farmers with financial constraints and a single firm with sufficient capital.The firm not only purchase agricultural products according to the order contract but also provide financial support.The government provides subsidy funds to farmers,which have enriched the theoretical model of internal financing in agricultural supply chain.Second,improving the performance of the supply chain by establishing the risk sharing mechanism between farmers and companies,introducing intermediary organizations.In previous approaches,farmers organizes and arranges the production according to the requirements of the contracts.However,the company who have signed contracts with farmers is focused on maximizing the profit and unwilling to provide the productive services to meet the demand of production funds and improve the efficiency of agricultural supply chain without institutional incentives.The solution to this problem is as follows: firstly,we have established the risk sharing mechanism between farmers and companies,such as alliance contract agriculture.Secondly,by introduce an intermediary organization,such as the contract-farming dominated by financial institutions,“agricultural social enterprise + farmer” mode and the land rental model dominated by crowdfunding platforms.In the contract-farming contract,the financial institution provides basic financing services and distributes the product for farmers as the core enterprise in supply chain.Under the “agricultural social enterprise + farmer” mode,the social enterprise provides initial capital to farmers to alleviate the difficulties of funding into production,offer producer services by established a revenue-sharing mechanism to bundle interests with farmers.In the land rental contract,the platform solves the problem of low efficiency of the traditional sales and circulation mode of agricultural products,make initiators have easy acess to receive financing.Third,we discuss the optimal production and pricing policies in the pre-order crowdfunding of strategic consumers under yield uncertainty and compares the optimal strategies under the AON and KIA mechanisms.The pre-order crowdfunding can reduce the financing transaction costs,reach the combination of industry and finance business models,and realize integration of manufacturing and marketing.Different from general industrial products,agricultural products have the features of the perishable and short sales cycle,which will lead to a high risk of unsalable or out of stock in circulation process.While pre-order not only can forecast the market demand and update the output in advance through the consumption information,but also enforce price discrimination and thus bring a higher profit for retailers.Therefore,advance sale has been widely applied in practice for it can effectively alleviate the uncertainty risk in the circulation process of agricultural products and improve the operational efficiency of the supply chain.This paper develops a two-stage game theory model to analyze the optimal production and pricing policies in the pre-order crowdfunding of strategic consumers under yield uncertainty and compares the optimal strategies under the AON and KIA mechanisms,which will provide a reference for the sponsors.Fourthly,we intend to study which subsidy policies play a more effective role in promoting agricultural production and bringing more income to farmers.To support agricultural production,the government has issued a series of policies to provide subsidies to farmers to promote agricultural production,guarantee household income and help them break down the financial constraints and enhance their financial situations.To develop agricultural planting,the Chinese government launched the target price protection program for cotton in northeast Xinjiang and soybeans in Inner Mongolia in 2004 to address the international oversupply market of the competitive landscape.In the same year,the central finance allocated 32.5 billion yuan for the "soybean target price subsidy fund",and the subsidies rose to 60.11 billion yuan in 2016.Nevertheless,the policies did not exert a satisfactory effect.To explore a more effective subsidy policy,the government has adjusted the "soybean target price protection program" in 2017,operating a producer direct subsidy policy purchased at a price by market combined with an area subsidy program.In essence,both the area subsidy and the target price subsidy are price mechanisms formed by the market,and the main aim is to boost agricultural activity.In practice,the farmers get some of the proceeds from the target price protection but would not be made whole.The area subsidy program is provided according to the actual farmland area,and the target price protection program is triggered when the market price is lower than the government’s price.We intend to identify and analyze subsidy policies that play a more effective role in promoting agricultural production and boosting the income of farmers.The government identified the best subsidy program to bring the subsidies into full play.Overall,supply chain finance is a new way of financing in the field of agricultural,with the proceeding of agricultural industrialization and the encroaching of Internet financial on the field of agriculture,the form of contract farming is also changed.The financing cost and credit risk can be effectively reduced if actively adjusting the resource endowment and power distribution under the different contract,which will eventually make the information flow,capital flow and logistics interaction of the whole supply chain system become more coordinated and efficient. |
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