Study On Supply Chain Coordination Of Agricultural Products Under Order Agriculture Mode

On the basis of relevant research on contract-farming, this thesis analyzes contract-farming which as a special system of supply chain, by using the methods of Contract theory and Game Theory. It establishes corresponding mechanism of contract price purchase and of supply-demand risk sharing from the view of the factors of price fluctuation and supply-and-demand risk, which intends to protect famer’s benefits and to avoid the default as well as to improve the stability and efficiency of contract-farming supply chain.Firstly, the study object is contract-farming with the characteristic of "company+ farmer", which regards company and farmer as retailer and supplier respectively, forming the basic model of contract-farming supply chain. Given that there exists fluctuation risk in wholesale price, contract mechanisms need to be structured separately, which containing the contract mechanism of fixed wholesale price and of the protection price. Meanwhile the thesis also makes comparison with two different contract mechanisms in the changing of decision behavior and of profits.The study finds out that famer’s enthusiasm for production can be barely affected if the mechanism of supply chain is designed from the perspective of price. What’s more, if the farmer takes advantage in negotiation, the company has more inclination to purchase in the protection price so that the whole supply chain can make more profit. Therefore, the transformation from "famer" to "agricultural association" guarantees sound development of contract-farming.Secondly, the thesis goes further on the analysis on the model of supply chain with mechanism of the protection price and sets up a model of supply chain under centralized decision. Without the risk-sharing mechanism, a famer’s optimized investment under the model of distributed decision is less than the one of entire supply chain under the model of centralized decision, which illustrates that there is double marginal effect. In this case, the gross profit of the normal supply chain is less than the one of centralized supply chain. Therefore, agricultural investment is able to improve through risk-sharing mechanism in order to make coordination in contract-farming supply chain.Finally, the thesis forms two models of corresponding risk-sharing mechanism for both individual and company have the mutual-responsibility of risk-sharing. A numerical example proves that the farmer’s agricultural investment can be fostered into a higher standard with the company taking a part of over-production risk, and the company can also make more interests. But the supply chain cannot be coordinated with its limited improvement. However, if the farmer takes a part of less-demand risk for the company, the agricultural investment can reach to the optimized result by regulating factors of risk-sharing, which is equivalent to the one in the centralized supply chain, to have coordination with the supply chain.