Effect of Target Price Insurance for Agri-food under Competition Between Primary Markets

doi:10.3969/j.issn.1007-7375.e16-2145

Abstract

Abstract: Target price insurance policy can give farmers a certain compensation when market price is too low, but it also affects farmers' production decision. Assuming that the buyer decides the purchase price, the game models are constructed in an agri-food supply chain consisting of two farmers and a buyer, considering whether the government launches target price insurance or shares the planning information. Comparing two indexes of social welfare and farmer's average profit for five schemes, it is observed that one scheme can maximize social welfare when just a government launches target price insurance and disclose planning information later, as well as the buyer takes discriminatory pricing strategy. Another scheme will minimize social welfare when the two governments don't disclose planning information and the buyer takes uniform pricing strategy. Being such a case, it makes little difference whether one or two governments launch target price insurance.

Key words: agri-food supply chain, social welfare, target price insurance

CLC Number:

F253.4

CHEN Jun, MA Yongkai, CAO Qunhui. Effect of Target Price Insurance for Agri-food under Competition Between Primary Markets[J]. Industrial Engineering Journal , 2017, 20(1): 20-26.

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