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METHODS article

Front. Sustain. Food Syst.
Sec. Agricultural and Food Economics
Volume 8 - 2024 | doi: 10.3389/fsufs.2024.1434711

Does Cooperative Intervention Affect Pricing Decisions in the Agricultural Supply Chain?

Provisionally accepted
Jiabin Han Jiabin Han Zhentian Sun Zhentian Sun *
  • School of Business Administration, Liaoning Technical University, Huludao, China

The final, formatted version of the article will be published soon.

    In global agricultural markets, farmers often face profit squeezes due to low bargaining power, which affects the sustainability of agriculture and the livelihoods of farmers. Cooperative intervention is seen as a key solution to improve bargaining power and optimize profit distribution in the agricultural supply chain. In this study, a two-stage dynamic game model is adopted to focus on bargaining power and compare the effects of linear pricing and double charging system under cooperative intervention. It is found that the cooperative is better when it has full bargaining power or when it faces downstream sellers with comparable bargaining power, and the dual-charging system is more favorable. When cooperatives bargain with sellers, the degree of differentiation of agricultural products affects the cooperatives' profitability and cooperatives tend to maintain the two-part tariff when the bargaining power is less than a threshold condition containing the degree of differentiation of agricultural products; discounts exceeding the threshold, cooperatives shift to linear pricing to safeguard their profitability. Numerical analysis validates the theory and reveals the changing pattern of cooperative profits under market forces. This paper not only provides theoretical support for the study of supply chain pricing strategies under the condition of considering the bargaining power of producers (farmers), but also provides management insights for the stability and sustainable development of agricultural supply chains. Its novel dynamic game framework is cross-culturally applicable to help farmers' cooperatives cope with the challenge of profit distribution in a global context, and emphasizes the importance of differentiation strategies to enhance bargaining power and to promote fairness and efficiency in global agricultural supply chains.

    Keywords: Cooperatives, Bargaining power, Agricultural supply chain, linear pricing, two-part fee system

    Received: 18 May 2024; Accepted: 12 Jul 2024.

    Copyright: © 2024 Han and Sun. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.

    * Correspondence: Zhentian Sun, School of Business Administration, Liaoning Technical University, Huludao, China

    Disclaimer: All claims expressed in this article are solely those of the authors and do not necessarily represent those of their affiliated organizations, or those of the publisher, the editors and the reviewers. Any product that may be evaluated in this article or claim that may be made by its manufacturer is not guaranteed or endorsed by the publisher.