Subsidy Policy Interactions in Agricultural Supply Chains: An Interdepartmental Coordination Perspective

Aibo Yao, Lin Jiang (), Bingxue Guo and Wei Li ()
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Aibo Yao: School of Management, Wuhan University of Science and Technology, Wuhan 430070, China
Lin Jiang: School of Management, Wuhan University of Science and Technology, Wuhan 430070, China
Bingxue Guo: School of Management, Wuhan University of Science and Technology, Wuhan 430070, China
Wei Li: School of Economics and Trade, Hunan University, Changsha 410006, China

Agriculture, 2025, vol. 15, issue 14, 1-27

Abstract: The efficacy of government subsidy programs in agriculture is frequently compromised by internal policy conflicts that arise between competing government departments. This challenge is addressed herein, with a focus on the policy environment in China, through the development of a game-theoretic model of an agricultural supply chain. This model explicitly incorporates two competing government bodies—the Agriculture and Rural Affairs Department (ARAD) and the Development and Reform Commission (DRC)—each with distinct objectives and performance indicators. Within this framework, the strategic interactions of four subsidy types are analyzed: production and cold-chain subsidies (ARAD), and platform operation and blockchain subsidies (DRC). The findings reveal that department-specific performance indicators can significantly distort the overall effectiveness of subsidies. While individual subsidies may achieve their intended departmental goals, their combined impact is shown to be complex and frequently suboptimal in the absence of higher-level coordination. Notably, a subsidy portfolio combining production and platform operation subsidies is found to consistently yield superior performance in maximizing social welfare. Ultimately, this research contributes a new framework for understanding subsidy policies and provides actionable insights for optimizing interdepartmental coordination to enhance supply chain performance.

Keywords: agricultural supply chain; subsidy programs; policy Interactions; performance indicators; interdepartmental coordination within the government (search for similar items in EconPapers)
JEL-codes: Q1 Q10 Q11 Q12 Q13 Q14 Q15 Q16 Q17 Q18 (search for similar items in EconPapers)
Date: 2025
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