Short supply chain participation and market performance for vegetable farmers in China

Abstract

The fresh food supply chain in China has begun to reduce the number of intermediaries that connect producers and consumers. Using farm-level data, this paper investigates the impacts of short supply chain participation on vegetable farmers’ market performance, including profits, productivity, production cost, price and price risk. The results show that the participation in a short supply chain is a profit-maximising strategy and risk management tool for farmers. The increase in profit is attributed to productivity advantages, farm size expansion, and risk reduction rather than because of price premiums or cost savings. A policy implication is that short supply chain promotion has many benefits, but the government should be more concerned about the sustainability of short supply chains.