Abstract: Price volatility as well as the pork safety are the two major issues in China's pork industry,in order to address the root causes,we must improve the farming size,establish direct and stable relationship between the farmers and the company.We study what is the optimal farm size,to make hog supply chain under contract farming model stability,and protect the pork safety.There have mutual investment in specific assets between the company and farmers in contract farming.According to the relationship among the cost and breeding size and cooperation term,transaction costs of companies and farmers (including specific assets investment) is divided into four categories,and build the cost-benefit function.The qualitative analysis shows both for farmers and for businesses,individual farmers must meet certain size.If the single farmer size is too small,the long-term contracts cannot be guaranteed,and the pork safety is also cannot be guaranteed.Quantitative solving quadratic programming,and numerical simulation show that: The individual farmers with larger scale,the company and farmer cooperation period is longer,fanner's product quality is higher;the reason is that the individual farmers with larger scale,asset specificity mutual investment is high,the more willing to establish and maintain long-term contract relationship and farmer's specialized assets are equal to half of the sum of enterprise's specialized assets and farmer's marginal cost.
Publication Year: 2013
Publication Date: 2013-01-01
Language: en
Type: article
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