Subsidy policies for the grain supply chain considering postharvest loss of grain and agricultural pollutant emission in China

Abstract

To reduce agricultural pollutant emission (APE) and postharvest loss of grain (PHLG), the Chinese government enacted a series of subsidy policies; however, the profit-oriented supply chain members are seriously lacking or reducing APE and PHLG efforts. To address this issue, we considered as the research objective a grain supply chain consisting of a producer, a retailer and the government. We proposed the concept and functional expressions of supply chain members' reduction efforts for APE and PHLG. We then proposed two main variables: the environmental innovation subsidy coefficient and the quantity attenuation factor of grain. According to the actual situation, four investment subsidy models were proposed. The results showed the following: i) supply chain members' equilibrium prices and incomes were negatively correlated with the degree of the producer's APE effort regardless of whether the supply chain members were investing in PHLG technology; ii) when the government subsidises APE and PHLG technology for other supply chain members, the government should stop subsidising the retailer's inputs in reduction loss technology to ensure that the government's own interests are not damaged; iii) the government's income was restricted by the degree of its subsidising of other supply chain members. This study provides a theoretical support for the government to formulate appropriate policies to reduce APE and PHLG, which is important for maintaining national food security.

Keywords

• agricultural non-point source pollution
• environmental innovation subsidy
• grain loss
• policy recommendations
• quantity attenuation factor