Subsidy strategies of grain supply chain considering stakeholder efforts on post-harvest loss reduction and pollution emission reduction

Abstract

For Chinese government, designing appropriate subsidy policies to mobilize chain members’ reduction effort about agricultural pollution emission (hereafter, PE) and grain post-harvest loss (hereafter, GPHL) is an urgent problem to be solved. Therefore, a grain supply chain with one producer, one retailer and government were chosen as our study subject. We proposed concepts and function expressions of stakeholders’ reduction efforts on PE and GPHL, and the demand function was modified. Four investment and subsidy models were analyzed. Findings: 1) stakeholders’ reduction efforts about GPHL and PE are positively related to their incomes. In the future, government can try to subsidize chain members’ reduction efforts on GPHL and PE. 2) Within a certain range, the government’s variable subsidy will motivate the producer and the retailer to reduce their PE and GPHL, otherwise, the government should adopt a fixed subsidy. 3) No matter whether supply chain members invest in GPHL reduction technology or not, both the equilibrium prices and revenues of stakeholders have a positive relationship with the effort level of PE reduction.