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Effect of loss aversion coefficient on the level of optimal sustainable investment of loss-averse farmer.
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Compared with the traditional agri-food supply chain (AFSC) whose only goal is to maximize economic benefits, the sustainable agri-food supply chain (SAFSC) starts to attract more attention. Typical challenges faced by SAFSC development are unfair pricing of produce, yield uncertainty caused by adverse weather, as well as conflict and cooperation b...
Context in source publication
Context 1
... 4 shows the relationship between the loss aversion coefficient and the sustainable investment level. We can make an in-depth analysis of Proposition 4, the results of which is shown in Figure 5. Whether or not it is under GPM, the sustainable investment level always declines when the farmers' degree of loss aversion increases. ...
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Citations
... The uncertainty is mainly in outputs [5,6], purchasing prices [7], demand [8,9] of agricultural products as well as food safety problem, and the most typical one is output. Diseases and pests [10] and adverse weather [11] (warm winter, late spring coldness, etc.) are the two core factors affecting the outputs of agricultural products. While pests and diseases could be partially controlled, adverse weather is artificially uncontrollable in agricultural production. ...
... While pests and diseases could be partially controlled, adverse weather is artificially uncontrollable in agricultural production. At the same time, the uncertainty in outputs of agricultural products affects the income of farmers [2] and agriculture-related downstream companies in the agricultural supply chain [11], which should also be taken into consideration. Therefore, this paper, taking warm winter as an example, studies the increase of farmers' income and environmentally sustainable operation of the agricultural supply chain under the impact of uncertainty of agricultural outputs. ...
... Moreover, these papers also do not consider the source of uncertain yield. The yield uncertainty is mostly caused by crop diseases and pests [22], or by uncontrollable adverse weather (such as mild winter, cold spells in late spring, etc.) [11]. Compared with to some extent controllable crop diseases and pests, uncontrollable adverse weather must be taken into consideration in agricultural supply chain management, due to the fact that climate risks have a significant negative impact on supply chain participants' performance in the agricultural supply chain [23] and further make agricultural production face greater uncertainty and increase farmers' economic losses [24]. ...
This paper studies the environmentally sustainable investment of an agricultural supply chain composed of a farmer and a company, under three subsidy policies which are the non-subsidy policy, the fixed subsidy policy, and the Agriculture Risk Coverage (ARC) subsidy policy. Then, we analyse the impact of different subsidy policy and adverse weather on the costs of the government and profits of the farmer and the company. By comparing with the non-subsidy policy, we find that both the fixed subsidy policy and the ARC policy encourage the farmer to improve the environmentally sustainable investment level and increase the profit of the farmer and the company. We also find that both the fixed subsidy policy and the ARC subsidy policy lead to an increase in government spending. Our results show that the ARC subsidy policy has a significate advantage in encouraging the farmer's environmentally sustainable investment if the adverse weather is relatively serious, comparing with the fixed subsidy policy. In turn, our results also show that the ARC subsidy policy is more beneficial for both the farmer and the company than the fixed subsidy policy if the adverse weather is relatively serious, which then leads to a higher expenditure of the government. Therefore, our conclusion serves as a theoretical basis for governments to formulate agricultural subsidy policies and promote sustainable development of the agricultural environment.
... Many studies have focused on government power and regulations (e.g. Fu et al., 2018;Srivastava et al., 2015), coordination between channel members (e.g. Ye et al., 2018) and the structure of stakeholder networks as ways to control risk (e.g. ...
Purpose
This study aims to extend ambidexterity theory from the perspective of organisational learning and examine how process ambidexterity, which comprises operational flexibility and operational routine, responds to environmental uncertainty and ultimately reduces organisational risks.
Design/methodology/approach
This study tests the hypotheses by analysing 464 annual reports of 115 listed companies in the Chinese agricultural and food industry using content and secondary data analyses. Four case studies are also provided.
Findings
The results show that (1) environmental uncertainty has a positive effect on either operational flexibility or operational routine; (2) both operational flexibility and operational routine have negative effects on organisational risks, supporting the view that process ambidexterity mediates the relationship between environmental uncertainty and organisational risks; and (3) organisational slack plays the role of “double-edged sword” by negatively moderating the effect of environmental uncertainty on operational flexibility and positively moderating the effect of environmental uncertainty on operational routine.
Originality/value
In an uncertain environment, companies are exposed to greater risk. This study contributes to risk management in three ways: first, it extends ambidexterity theory to process management and proposes how process ambidexterity balances operational flexibility and routines. Second, it distinguishes between the different conditions under which flexibility or routines are superior. Third, it explains the mechanisms related to how organisations can resolve environmental uncertainty into risk through process ambidexterity.
... 2021). To achieve a win-win situation under the influence of adverse weather, it is suggested that a guaranteed price mechanism-based risk-reward contract should be signed between farmers and wholesalers (Fu et al. 2018), enabling extreme weather conditions to be hedged and farmers' profits to be guaranteed. To reduce the risk of uncertain exchange rates to an acceptable level, Nyamah et al. (2017) suggest building collaborative relationships with financial companies and using a range of financial instruments such as financial hedges and operational hedges. ...
Agri-food supply chain (AFSC) resilience is receiving increasing attention as AFSC stakeholders perceive its benefits in recovering from unexpected disruptions. However, which resilience capabilities are more effective in mitigating AFSC risks remains unclear. To address this gap, this article presents a novel AFSC risk and resilience analysis based on a systematic literature review (SLR). In total, 95 journal articles on AFSC risk and resilience management published between 2004 and 2020 are analyzed to identify key risks and resilience capabilities in AFSCs, the relationships, correlations and causalities between them, and research gaps and future research directions in the field. Our SLR reveals eight types of AFSC risk and seven types of AFSC resilience capability, and enables us to develop a one-to-one resilience-risk correspondence model. Suggestions for future research include: cross-country comparative analysis to gain a deeper understanding of risk and resilience management; identification of risk and resilience strengthening strategies through a multi-sectoral approach; longitudinal studies to determine the long-term effects of resilience capabilities; research to understand resilience from the perspectives of supply-chain collaboration, traceability, redundancy, knowledge management, innovation, leadership, and flexibility; investigations of the positive effects of AFSC risks in triggering resilience capabilities; and cross-disciplinary research to understand the relationships between resilience and other disciplines.
... Although different types of contracts are discussed in the literature for managing sustainable supply chains (e.g., [47,48]), no contractual regulations on environmental and social aspects are used in the examined supply chain after the raw material production and import stage. Instead, sustainability standards are ensured via certificates. ...
The food industry is one of the main drivers of climate change, with serious impacts on the living and working conditions in developing countries. Due to these sustainability issues, consumers, governments, and non-governmental organizations are pressuring food companies to rethink their current business concepts of food production. Food companies rely on supply chain governance and its mechanisms to implement sustainability standards across all tiers of their supply chains. This study examines the sustainability governance at all stages of a cocoa supply chain, from the raw material production to the retailer, by using a qualitative case study approach. The results show a differentiation of the sustainability governance according to the different supply chain stages. At the raw material production stage, sustainability is mainly improved using contracts, extensive and frequent knowledge sharing, and audits. After the raw material production stage, environmental and social sustainability is almost exclusively coordinated by certificates, while other governance mechanisms are used to foster long-term economic business relationships. This study gives detailed insights into the application intentions and the functioning of sustainability governance mechanisms and provides propositions on how to efficiently improve sustainability in food supply chains.
... Combined with weather-based market information, agricultural price and weather insurance schemes could help protect farmers and food traders against extreme weather events that affect crop productivity and final food availability, both on local and international markets (Fu et al., 2018). Weather risk-based price insurance could ensure consistent revenues for value chain actors, minimize price volatility and maintain adequate levels of investment in agrifood production and trade in the face of extreme weather events and climate change (Mirzabaev and Tsegai, 2012). ...
The report highlights the role of climate services in sustaining climate resilience as one of numerous potential investment options for enhancing climate risk management across agrifood value chains. The final outputs and outcomes of the report are, therefore, aimed at multiple stakeholders, including policymakers, climate-related finance mechanisms, international development organizations and the private sector. The report calls on academic researchers to conduct further research on the topic and on national and international funds to invest in the design and development of projects dedicated to supporting the climate-proofing of agrifood value chains worldwide.
... Kaipia et al. (2013) used three pilot case studies to identify increased availability of information and knowledge necessarily leads to improved production, post-harvest decisions by the farmers, as well as improved decision-making by all other stakeholders in FSC. Fu et al. (2018) identify that a stable price mechanism support and weather risk-sharing for farmers can enable them to invest in more sustainable innovations. Chauhan et al. (2019) identify the importance of awareness programs for farmers as a key driver of sustainability in agrisupply chains. ...
The sustainable food supply chain (SFSC) is a research area of global significance. The increasing number of research articles in SFSC justifies this. With 80% of publications in SFSC coming up in the last 7 years, this field is expanding and diversifying at a rapid rate. The research on sustainable food supply chain (SFSC) covers a wide variety of areas and has a wide range of research themes in FSC. To facilitate the theoretical understanding of SFSC, we have conducted a review of the literature on SFSC. With the aim to define prominent research themes in SFSC, we follow an integrated review approach of structured literature review (SLR), bibliometric analysis, and thematic analysis. Bibliometric analysis was conducted using the vosviewer software version 1.6.16. The thematic analysis identified- “Waste management”, “SC sustainability and impact assessment”, “Decision support”, “Operations management and optimization”, “Food quality and safety”, “Sustainable business models”, “Innovation and technological solution”, “SC strategy”, and “Social sustainability” as the key emergent themes. We discuss the conceptual and theoretical basis of each of these themes. “SC sustainability and impact assessment” is identified as the most dominant theme in SFSC. Innovation and technological solution is an emerging theme with many new publications related to disruptive technologies coming up. Research in collaboration and decision theory-based approaches is important to enable sustainability in FSC. Quantifying waste streams, identifying hotspots are important future directions of research in SFSCM. Circular economy, AFSC, and the use of advanced technologies to enable circularity and sustainability also have great scope. The review aims to help researchers and academicians understand the boundaries and domain of SFSC and the future scope of these themes about how they can enhance the sustainability in SFSC.
... Fairness in agri-food SCs is critical for reaping the benefits of trade liberalization, particularly in emerging nations' rural areas. It makes agri-food services such as organic training and premium marketplaces more accessible [36,37]. Co-operatives -A co-operative is a self-governing group of people that band together to obtain economies of scale and compete with major businesses in the marketplace. ...
The connection of the agri-food sector with the agenda of sustainable development comes naturally, as the chain from production to processing, trading, distribution and consumption is directly connected with significant issues in environmental, economic, and social realms. Today’s challenge for businesses is not whether to embrace sustainability, but rather how to effectively establish sustainable supply chains. Therefore, a solid grasp of the move from “conventional” to “sustainable” supply chains is necessary. In this paper, we focus on the supply chain management of the agri-food sector, seeking to shed light on practices which may contribute to the transition of the sector towards sustainability. In this vein, we extend the conceptual framework which was proposed by Beske and Seuring (2014) so that it accommodates the contemporary particularities of agri-food supply chains.
... Several factors, including quality and safety certification, green supplier evaluation and selection, marketing channel management, and government regulation, can influence the quality behavior of participants in the agri-food supply chain [28][29][30][31]. In a two-echelon decision-making model consisting of a loss-averse farmer and a loss-neutral company, Fu et al. [32] found that a high guaranteed price decided by the company can reduce the losses of farmers caused by price uncertainty; however, such pricing may breed laziness among the farmers in sustainable agricultural practice and reduce their activeness in supplying agri-foods. As an important indicator of the quality of fresh produce, freshness preservation also influences the quality of agri-foods and revenue of participants [33]. ...
The quality of agri-foods in e-supply chains confronts more threats than that in the traditional agri-food supply chain. However, most of the existing studies focusing on the quality problems of fresh agri-products are mainly cases studies and statistical analyses, and they do not take into account the farmers’ willingness to comply with safe agri-food supply procedures. To solve the supply quality problems of fresh agri-foods and help participators make a better choice, the decision-making behavior on the supply quality of agri-foods in the e-supply chain was deeply studied in this paper using game theory. Some factors related to the decision behavior of the supply chain were analyzed, including the supervision intension of the government, the rights protection consciousness of consumers, and the intensity of punishment for poor-quality agri-foods. These factors have an important influence on the farmers’ willingness to provide high-quality products and e-business’ probability of inspection. Compared with three different decision models of agri-food e-supply chains, the results show that the decentralized decision model is better than the centralized model from the view of quality protection. The behavior of members of the supply chain is as follows: the farmers’ willingness to supply high-quality agri-foods increases with the increase in the consumers’ consciousness of their rights and the government's supervision intensity. The “experience deviation” phenomenon also occurs when a new e-business makes a decision about its quality inspection behavior in this e-supply chain where the quality information is traceable. As such, e-business enterprises should reduce their quality inspection behavior based on the increase in the government's supervision intensity. This happens to be opposite to the traditional experience where quality information is not traceable. This study not only extends the research framework of the novel electronic supply chain, but also provides a certain reference for the subsequent research and e-business practices of fresh produce in developing countries.
... This concept has been taken into consideration when evaluating socioeconomic activities from different perspectives. For example, Fu et al. [28] studied the risk-reward contract for the agri-food supply chain from the holistic sustainability perspective. The above suggests that a multifaceted perspective is needed to define sustainability. ...
Microfinance institutions (MFIs) have attracted great attention, due to their significant role in poverty reduction. Given the features of MFIs, this paper proposes a novel hybrid model of soft set theory, and an improved order preference by similarity to ideal solution (HMSIT) to evaluate the sustainability of MFIs, considering accounting ratios, corporate governance factors, and macro-environmental factors, from a cross-country perspective. This setting enables the examination of the role of macro-environmental factors in the sustainability of MFIs. For this purpose, soft set theory is adopted to select optimal criteria. An improved order preference by similarity to ideal solution method, in which the weight of each criterion is determined by soft set theory, is proposed to rank the sustainability of MFIs. This algorithm enables HMSIT to make full use of various types of information. The case study uses cross-country samples. Results indicate that macro-environmental factors are significant in evaluating the sustainability of MFIs from a cross-country perspective. Particularly, they can play a key role in distinguishing MFIs with low sustainability. The results also indicate that HMSIT has strong robustness. Ranked results, produced from the proposed HMSIT are reliable enough to provide some managerial suggestions for MFIs and help stakeholders make decisions.
... In the partnership between the manufacturer and the retailer, the manufacturer decides the wholesale price w of a specific product, the retailer decides the product sales price p p , and then the manufacturer and retailer decide their extended warranty service price p sm and p sr , respectively. e inverse solution method, which has been widely used by Zhang et al. [28] and Fu et al. [29], is adopted. e optimal profit functions of the manufacturer and retailer are given as follows: ...
This paper examines optimal pricing in a two-tier product and service supply chain consisting of a manufacturer and a retailer in the context of vertical competition in extended warranty in two cases: one considering the retailer’s fairness concerns and one without considering the retailer’s fairness concerns. A manufacturer-dominated product and service supply chain game-theoretic model on the Stackelberg model is developed to analyse how the level of vertical competition in extended warranty service and the intensity of a retailer’s fairness concerns influence the optimal pricing of products and extended warranties for the manufacturer and retailer. This study finds the following: (i) Two parties of the supply chain employ differential pricing strategies for extended warranties when the retailer has fairness concerns. (ii) Compared to the same pricing strategies for extended warranty service when the retailer has no fairness concerns, the increase of competition intensity of vertical extended warranty service will enlarge the price difference of extended warranty service. Meanwhile, it is the intensity of fairness concerns that determines the influences of retailer’s fairness concerns on the price difference of extended warranties. (iii) If no fairness concerns are raised, an increase in the level of vertical competition in extended warranty service would benefit both supply chain parties, rather than hurting their profit. If the retailer is fair-minded, its fairness utility increases when the intensity of the fairness concerns rises in a reasonable range and decreases when the intensity exceeds the reasonable range, but for the manufacturer, its profits will be damaged as long as the retailer raises fairness concerns.
