Research on Contract Coordination Mechanism of Contract Farming Considering the Green Innovation Level

Abstract

Green agriculture is an important issue in agricultural development. The farming cooperative frequently chooses to improve its green innovation level of agricultural products to support the growth of green agriculture. Based on the characteristics of contract farming, this paper establishes a decision-making objective function for agricultural cooperatives considering the level of green innovation and uses the Stackelberg game method to analyze the decision-making behavior of contract farming supply chain participants. The research found that the green innovation level of the cooperative increased with the increase in yield per mu, and that the optimal contract price and planting area increased with the expansion of the market size. In particular, the planting area and green innovation level under the decentralized decision-making situation were lower than those under the centralized decision-making situation. Therefore, to better achieve supply chain coordination and improve the green innovation level, this paper proposes a “Cost sharing + Alliance expense” contract coordination mechanism. Numerical analysis shows that the contract coordination mechanism can effectively improve the green innovation level and realize the Pareto improvement in the profits of the cooperative and the enterprise.