Strategy of Tax Reduction Followed by Subsidy for Agricultural Products Supply Chain Under Extreme Weather Affecting Freshness

Under extreme weather affecting freshness, this paper establishes dynamic game models for two-echelon agricultural products supply chain in five cases, which are tax reduction for seller and based on tax reduction followed by order or sale subsidy for processor and seller. The optimal tax reduction followed by subsidy strategy is analyzed in terms of operation of agriculture products supply chain, government’s financial performance, and public welfare construction. The results show as follows. Firstly, seller performing public welfare can mitigate the negative impact of extreme weather and tax reduction intensity, but too intense public welfare will hurt own profits. Secondly, compared to the government implementing only tax reduction, the tax reduction followed by subsidy can increase supply chain profits and enhance the effectiveness of public welfare performance. Finally, tax reduction and order subsidy for processor is the optimal strategy in terms of optimizing the decision-making of agriculture products supply chain, boosting government tax revenues, enhancing fiscal incentives, improving consumer surplus, increasing the overall social welfare, and strengthening public welfare; tax reduction and order subsidy for seller is the optimal strategy in terms of increasing capital efficiency.