Green and Efficient Technology Investment Strategies for a Contract Farming Supply Chain Under the CVaR Criterion

Yuying Li and Wenbin Cao ()
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Yuying Li: School of Business, Jiangnan University, Wuxi 214122, China
Wenbin Cao: School of Business, Jiangnan University, Wuxi 214122, China

Sustainability, 2025, vol. 17, issue 17, 1-26

Abstract: Synergizing soil quality improvement and greening for increased yields are essential to ensuring grain security and developing sustainable agriculture, which has become a key issue in agricultural cultivation. This study considers a contract farming supply chain composed of a risk-averse farmer and a risk-neutral firm making green and efficient technology (GET) investments, which refers to the use of technology monitoring to achieve fertilizer reduction and yield increases with yield uncertainty. Based on the CvaR (Conditional value at Risk) criterion, the Stackelberg game method is applied to construct a two-level supply chain model and analyze different cooperation mechanisms. The results show that when the wholesale price is moderate, both sides will choose the cooperative mechanism of cost sharing to invest in technology; the uncertainty of yield and the degree of risk aversion have a negative impact on the agricultural inputs and GET investment, and when yield fluctuates greatly, the farmer invests in GET to make higher utility but lowers profits for the firm and supply chain. This study provides a theoretical basis for GET investment decisions in agricultural supply chains under yield uncertainty and has important practical value for promoting sustainable agricultural development and optimizing supply chain cooperation mechanisms.

Keywords: contract-farming; risk-averse; green and efficient technology; yield uncertainty; CvaR (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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