Government Subsidy Mechanism of Contract Farming Supply Chain under Uncertain Acquisition Price

Abstract

Against the backdrop of deep integration between the digital economy and rural revitalization strategies, agricultural supply chains face dual challenges of uncertain purchase prices and insufficient production funding. This study constructs a two-tier supply chain Stackelberg game model integrating agricultural cooperatives and e-commerce platforms, analyzing the impact of government production cost subsidies on supply chain decisions and profitability. The findings reveal that centralized decision-making yields higher social welfare than decentralized approaches. While government subsidies incentivize increased production, they may depress purchase prices, creating a U-shaped effect on farmers 'and e-commerce platforms' profits with a critical subsidy intensity threshold. The paper recommends implementing targeted subsidies and enhancing supply chain coordination to improve overall efficiency and farmers' income.