Research on the optimization of supply chain decisions for green agricultural products based on farmers' risk preferences and disaster year subsidies

Li, F.; Du, Y.; Gui, Y.; Wen, J.

Growing Science » International Journal of Industrial Engineering Computations » Research on the optimization of supply chain decisions for green agricultural products based on farmers' risk preferences and disaster year subsidies

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International Journal of Industrial Engineering Computations

ISSN 1923-2934 (Online) - ISSN 1923-2926 (Print) Quarterly Publication Volume 16 Issue 2 pp. 275-294 , 2025

Research on the optimization of supply chain decisions for green agricultural products based on farmers' risk preferences and disaster year subsidies Pages 275-294 Download PDF

Authors: Fuchang Li, Yadong Du, Yutong Gui, Jing Wen

DOI: 10.5267/j.ijiec.2025.2.005

Keywords: Agricultural insurance, Government disaster year subsidies, Conditional Value-at-Risk (CVaR), Green agricultural products

Abstract: This study focuses on optimizing supply chain decisions under two scenarios: government subsidies during disaster years and farmers with varying risk preferences. An order-agriculture supply chain model is constructed, involving three parties: farmers, distributors, and insurance companies. Farmers cultivate agricultural products with varying levels of greenness. A three-stage game model is employed to derive the optimal planting scale for farmers, the optimal wholesale price for distributors, and the optimal premium rate for insurance companies. The results indicate that government disaster year subsidies directly increase the Conditional Value-at-Risk (CVaR) of farmers, although a maximum subsidy rate exists to prevent inequity. Enhancing the greenness of agricultural products has a positive impact on agricultural production. As the probability of disaster years increases, loan guarantee insurance becomes more effective in expanding farmers' planting scales, while yield guarantee insurance demonstrates superior performance in improving farmers' CVaR. The practical value of this study lies in providing farmers with optimal decision-making frameworks and profit calculations for loan guarantee insurance and yield guarantee insurance under varying disaster-year probability scenarios. Additionally, it explores the impact of government subsidies during disaster years, the greenness level of agricultural products, and the risk of crop failure on changes in farmers' value. These findings contribute to the optimization of farmers' decision-making processes, enhancement of their economic welfare, and the promotion of sustainable agricultural development, ultimately improving the livelihoods of farmers.

How to cite this paper

 Li, F., Du, Y., Gui, Y & Wen, J. (2025). Research on the optimization of supply chain decisions for green agricultural products based on farmers' risk preferences and disaster year subsidies.International Journal of Industrial Engineering Computations , 16(2), 275-294.

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