IDEAS home Printed from https://ideas.repec.org/a/plo/pone00/0341465.html

Financing strategies for contract agricultural supply chain considering government subsidized interest

Author

Listed:
  • Jialuo Wang
  • Changhong Li
  • Yifan Shi

Abstract

This paper examines the financing strategy of capital-constrained farmers (traditional banking financing or e-commerce platform financing) and the government’s subsidy strategy (whether to subsidize) in the contract agricultural supply chain. The optimal decisions, profits, and social welfare are compared and analyzed under different scenarios, and the hybrid financing model is further extended. The study found that when the probability of normal production is low, it is optimal for the farmer to choose bank financing. The farmer’s choice of bank financing or platform financing is more profitable than the hybrid financing strategy in all cases. The platform can provide a short-term interest-free financing strategy to ensure the production and marketing of agricultural products. This study provides guidance on how to choose the financing strategy for the capital-constrained farmer and how the government implements subsidy policies.

Suggested Citation

  • Jialuo Wang & Changhong Li & Yifan Shi, 2026. "Financing strategies for contract agricultural supply chain considering government subsidized interest," PLOS ONE, Public Library of Science, vol. 21(2), pages 1-21, February.
    • Handle: RePEc:plo:pone00:0341465
    DOI: 10.1371/journal.pone.0341465
    as

    Download full text from publisher

    File URL: https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0341465
    Download Restriction: no
    File URL: https://journals.plos.org/plosone/article/file?id=10.1371/journal.pone.0341465&type=printable
    Download Restriction: no
    File URL: https://libkey.io/10.1371/journal.pone.0341465?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Zelong Yi & Yulan Wang & Ying‐Ju Chen, 2021. "Financing an Agricultural Supply Chain with a Capital‐Constrained Smallholder Farmer in Developing Economies," Production and Operations Management, Production and Operations Management Society, vol. 30(7), pages 2102-2121, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mandal, Prasenjit & Basu, Preetam & Choi, Tsan-Ming & Rath, Sambit Brata, 2024. "Platform financing vs. bank financing: Strategic choice of financing mode under seller competition," European Journal of Operational Research, Elsevier, vol. 315(1), pages 130-146.
    2. Wu, Jianghua & Wang, Xin & He, Yuhong, 2025. "Design of Blockchain and Strategic Financing Service under the Platform Economy," Omega, Elsevier, vol. 131(C).
    3. Zhang, Xing & Jin, Hong, 2025. "Financing constraints of listed agricultural companies, agricultural product processing output value, and supply chain finance," Finance Research Letters, Elsevier, vol. 86(PB).
    4. Yiwen Bian & Shuai Yan & Zelong Yi & Xu Guan & Ying‐Ju Chen, 2022. "Quality Certification in Agricultural Supply Chains: Implications from Government Information Provision," Production and Operations Management, Production and Operations Management Society, vol. 31(4), pages 1456-1472, April.
    5. Ma, Chenglin & Li, Xiang & Zhao, Ruiqing & Song, Zhendong, 2025. "Cooperative financing mode in a capital constrained supply chain," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 199(C).
    6. Ying Hu & Guoxuan Huang & Yefei Yang, 2026. "Brand marketing strategy with social responsibility: product line design and pricing," Electronic Commerce Research, Springer, vol. 26(2), pages 2153-2209, April.
    7. Jiang, Zhong-Zhong & He, Na & Huang, Song, 2021. "Government penalty provision and contracting with asymmetric quality information in a bioenergy supply chain," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 154(C).
    8. Shilin Cai & Qiang Yan, 2023. "Online sellers’ financing strategies in an e-commerce supply chain: bank credit vs. e-commerce platform financing," Electronic Commerce Research, Springer, vol. 23(4), pages 2541-2572, December.
    9. Bae, Sang Hoo & Saberi, Sara & Kouhizadeh, Mahtab & Sarkis, Joseph, 2025. "Examining blockchain's role in supply chain finance structure and governance," International Review of Financial Analysis, Elsevier, vol. 99(C).
    10. Escamilla, Rafael, 2023. "Managing the nanostore supply chain : Base-of-the-pyramid retail in emerging markets," Other publications TiSEM 7518aa1a-4ba1-45af-8d73-d, Tilburg University, School of Economics and Management.
    11. He, Mengyu & Kang, Kai & Wei, Xuguang & Li, Yongjian, 2023. "Financing strategy of transnational supply chain with vertical shareholding under tax system difference: Creditor or guarantor?," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 169(C).
    12. Li, Hongping & Zha, Yong & Bi, Gongbing, 2023. "Agricultural insurance and power structure in a capital-constrained supply chain," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 171(C).
    13. Abdul Samed Muntaka & Isaac Akurugu Apike & David Antwi, 2024. "Antecedents of sustainable agricultural supply chain financing for achieving food security in resource‐constrained developing economies: A complex adaptive systems theory perspective," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 68(4), pages 868-890, October.
    14. Kumawat, Govind Lal & Papier, Felix & Roy, Debjit, 2026. "Dynamic capacity allocation under service-dependent demand and market exit risk," European Journal of Operational Research, Elsevier, vol. 335(1), pages 152-165.
    15. Boshi Tian & Liangwei Yu & Xiaoxing Chang, 2026. "Risk spillovers and coordination under credit guarantees in a capital constrained supply chain with multiple risk-averse agents," Operational Research, Springer, vol. 26(1), pages 1-55, January.
    16. Monica Laura Zlati & Andrei Mirel Florea & Valentin Marian Antohi & Marius Sorin Dinca & Florentin Bercu & Costinela Fortea & Stanciu Silvius, 2023. "Financing Romanian Agricultural Cooperatives’ Investments for the 2023–2027 Horizon," Sustainability, MDPI, vol. 15(3), pages 1-28, January.
    17. Xie, Wei & Yu, Huilin & Zhong, Yuanguang & Zhou, Yong-Wu, 2024. "Impact of loss aversion on financing mechanism preference under consignment: Direct vs. Guarantee," European Journal of Operational Research, Elsevier, vol. 314(1), pages 206-228.
    18. Liao, Changhua & Lu, Qihui & Shi, Victor & Liu, Yuxuan, 2026. "Collaboration strategies for technology investment in agricultural supply chains: The value of platform financing," European Journal of Operational Research, Elsevier, vol. 334(2), pages 466-480.
    19. Li, Yanhai & Ou, Jinwen & Gu, Chaocheng, 2023. "Buyer guarantee and bailout in supplier finance with bankruptcy cost," European Journal of Operational Research, Elsevier, vol. 305(1), pages 287-299.
    20. Ghosh, Kirit & Basu, Sumanta & Avittathur, Balram & Govindan, Kannan, 2025. "Agency or reseller: The role of supply chain finance in deciding E-commerce channel under product return risk," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 201(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:plo:pone00:0341465. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: plosone (email available below). General contact details of provider: https://journals.plos.org/plosone/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.