Strategies for Enhancing Social Benefits in Agricultural Waste Management: A Game Theory Approach to Government Subsidy Policies

This paper explores a resource utilization governance model that uses concentrated industrial production to transform agricultural waste into energy and fertilizer, aiming to reduce surface pollution and support the agricultural Circular Economy (CE). However, challenges such as raw material collection difficulties, low stakeholder participation, and limited social benefits persist. To address these issues, we develop a decision-making game model for an agricultural waste recovery and organic fertilizer production supply chain involving farmers, manufacturing enterprises, and the government. We analyze three subsidy strategies—no subsidy, subsidies to farmers, and subsidies to enterprises—while considering regional factors such as waste density and road complexity. Our results show that subsidies to both farmers and enterprises increase waste recycling and social welfare. Specifically, in regions with high waste density and complex roads, subsidies should target manufacturing enterprises, while in areas with flat terrain and high waste density, subsidies should favor farmers. In regions with low waste density and complex terrain, farmers should be prioritized. These findings propose solutions and policy recommendations for enhancing government involvement in agricultural waste management and guiding corporate investment decisions.