Operation Decision Analysis Of Contract-farming Supply Chain Under The Premium Subsidy Provided By The Government

Given the random yield of agricultural products and the characteristic of risk aversion of the farmer,the contract-farming supply chain urgently needs to buy agricultural insurance to transfer risk.At present,China's agricultural insurance has reached an unprecedented scale in history.The premium subsidy policy of agricultural insurance plays an important role in promoting the development of agricultural insurance industry.The production decision and pricing decision,which made by the contract-farming supply chain when agricultural insurance and premium subsidy are available,have been a hot topic.However,the premium subsidy policy of agricultural insurance has both advantages and disadvantages.The study and analysis of the effect,which produced by the premium subsidy policy of agricultural insurance,will help us identify the advantages and disadvantages of the premium subsidy policy of agricultural insurance,so as to promote the healthy development of China's agriculture.Based on this,for a contract-farming supply chain consisting of one risk-averse farmer and one risk-neutral buyout firm,this paper introduces the conditional value-at-risk(CVa R).A two-stage game model including a farmer and a buyout firm is constructed under the premium subsidy,and the optimal decision making behavior of the farmer and the buyout firm are solved.On this basis,by theoretical solution and numerical analysis,this paper further discusses the impact of farmers' degree of risk aversion on balanced decision-making and subject income,and studies the impact of premium subsidy policy on the contract-farming supply chain.The research of this paper comes to the following conclusions.First of all,when making decision on insurance output rate,the farmer does not need to consider the order price decision of the buyout firm,but only considers the combined influence of the degree of risk aversion of the farmer,the profit margin of the insurance company and the premium subsidy rate of the government.Specifically,with the increase of risk aversion degree of the farmer,the reduction of profit margin of the insurance company,the increase of government premium subsidy rate,the farmer's willingness to insure under the balanced decision increase.Secondly,the characteristic of the farmer's risk aversion has no positive effect on the buyout firm and the whole system,and has no negative effect on the farmer.When the premium subsidy rate of the government is larger,the risk aversion characteristic of the farmer has no influence on the expected profit of the farmer.Otherwise,there is a critical value of risk aversion degree of the farmer to maximize the farmer's expected profit.Finally,the research shows that the subsidy rate is too high or too low to do good for the development of the agricultural insurance industry.If the government aims to promote the development of the agricultural insurance industry through the premium subsidy policy of agricultural insurance,the government should make the premium subsidy rate as close as possible to the net interest rate of the insurance company.The study also shows that the main beneficiary of premium subsidy policy is the buy-out firm,rather than the farmer who initially sought help.If the government aims to help the farmer to increase income through the premium subsidy policy,if and only if the profit margin of the insurance company is smaller,the government should provide premium subsidy,and the rate of premium subsidy should not be particularly small;Otherwise,in any other case,the government should not provide premium subsidy.