Digital Traceability and Contract Coordination for Sustainable Agri-Food Supply Chains

Abstract

Agri-food supply chains are highly exposed to freshness deterioration, demand uncertainty, and information asymmetry. In practice, upstream suppliers may strategically misreport freshness-related information to influence downstream procurement decisions, which can amplify inefficiency and increase food loss and waste. This study develops an analytical framework that integrates (i) strategic freshness misreporting by an informed supplier, (ii) endogenous investment in blockchain-enabled traceability that improves information credibility at a cost, and (iii) contract design for supply chain coordination. We consider a two-echelon agri-food supply chain with stochastic demand and freshness-dependent valuation, and characterize equilibrium operational decisions under centralized and decentralized settings. The results reveal how misreporting reshapes optimal order quantities, wholesale prices, and profit allocation, and identify conditions under which misreporting increases expected waste and undermines sustainability performance. We then examine how traceability investment changes the incentives of both parties, leading to adoption thresholds and potential incentive misalignment under decentralization. Finally, we design revenue-sharing, cost-sharing, and combined contracts and derive parameter regions that coordinate the blockchain-enabled agri-food supply chain and generate Pareto improvements for both the supplier and the retailer. Numerical experiments illustrate the comparative statics and quantify the trade-offs among profitability, transparency, and waste reduction. Relative to existing blockchain-enabled agri-food supply chain models, the framework jointly endogenizes supplier misreporting of freshness, blockchain-based traceability investment, and contract parameters, thereby uncovering new adoption thresholds and coordination regions that tightly link transparency decisions to food loss and waste. The findings provide actionable guidance for using digital traceability and contract mechanisms to curb opportunism, enhance coordination, and support sustainable agri-food supply chains.