Poverty alleviation schemes for high escaping poverty probability: Contract-only, compensation, and capacity-building

Hang Xie, Shihao Huang and Chun-Hung Chiu

Transportation Research Part E: Logistics and Transportation Review, 2024, vol. 181, issue C

Abstract: In this paper, we examine the minimum procurement price and government subsidies for the successful implementation of three Poverty Alleviation Schemes (PASs): Contract-Only Scheme (CO), Contract with Compensation Scheme (CS), and Capacity-building with Training (CT). We consider an agricultural supply chain with a pro-poor enterprise and a group of impoverished farmers who grow, harvest, and sell the product to the pro-poor enterprise, and the government decides to subsidize the pro-poor enterprise for poverty alleviation. The price of the agricultural product and the harvest output are uncertain and negatively correlated. We consider a new type of poverty alleviation objective: the poor farmer escapes poverty if their profit exceeds the poverty line (PEP) and establishes a higher probability of escaping poverty (EPP). We use real coffee and tea prices to capture the skewness of the distribution of product prices in a numerical analysis. We find that (i) the impoverished farmers would benefit from PASs, but the pro-poor enterprise would incur risks because both parties share the uncertainty of harvest output in PASs; (ii) the local government should provide subsidies to the pro-poor enterprise to implement PASs better; (iii) CT and CS have a lower bound for the procurement price as well as local government compensation; and (iv) if the product price exhibits a left-skewed distribution, then the EPP becomes crucial, and a higher procurement price is required to increase the EPP.

Keywords: Poverty alleviation; Contract-only; Compensation; Capacity-building; Escaping poverty probability (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1366554523003526
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:transe:v:181:y:2024:i:c:s1366554523003526

Ordering information: This journal article can be ordered from
http://www.elsevier.com/wps/find/journaldescription.cws_home/600244/bibliographic
http://www.elsevier. ... 600244/bibliographic

DOI: 10.1016/j.tre.2023.103364

Access Statistics for this article

Transportation Research Part E: Logistics and Transportation Review is currently edited by W. Talley

More articles in Transportation Research Part E: Logistics and Transportation Review from Elsevier
Bibliographic data for series maintained by Catherine Liu ().