The financing strategy of agricultural supply chain based on cost sharing and buyer guarantee is considered in smart agriculture

Abstract

Supported by the agricultural technology, the intelligent agricultural development is flourishing. However, due to the high technology cost and investment risk, intelligent agriculture in China is still in the exploration stage. This article designs the appropriate cost sharing mechanism under the two-stage supply chain system, which composes of a farmer, a core enterprise and a commercial bank. With the comparison between commercial bank financing model and the buyer guarantees financing model, this paper researches the optimal decisions of supply chain members and the influence of the cost-sharing ratio, technical input gain effect and the buyer guarantees ratio. The results show that the profit will increase with the add of technical input gain effect. Besides, only under certain conditions, cost sharing is valuable to each member. Finally, numerical examples show existing an optimal interest rate spread area that all members would benefit from the buyer guarantee financing model.