Institutional Supply,Contract Enforcement And Institution Performance Of The Circular Agricultural Industry

The large-scale development of agriculture has brought about great pressure on the ecological environment and carbon emission while increasing the agricultural economy.Developing agricultural circular economy is an effective way to improve the ecological environment,respond to global climate change,and promote the comprehensive green transformation of economic and social development.Planting and breeding combined with circular agriculture is a model of circular agriculture which has been widely applied in agricultural circular economy practice.In the governance environment of socialism with Chinese characteristics,the government provides incentives and constraints by means of institution supply to promote the implementation of the circular agriculture,contains the government,planting,breeding and agricultural services has been formed the main body of circular agriculture industry,become the important carrier of agricultural circular economy development.The government’s circular agricultural industrial system supply will directly affect the choice of economic behavior of industrial subjects,and then determine the realization of industrial economic performance and system performance.The government plays the role of institutional supply in agricultural circular economy,the theoretical basis of this paper is the economic analysis of the industrial organization based on the new SCP analysis paradigm.Therefore,this paper draws on the existing literature research to construct the THEORETICAL analysis paradigm of RCP.Whether the government and market subjects and market subjects participate in the utilization of livestock and poultry waste resources,compensation or regulation,manure trading and other behaviors are largely affected by transaction costs.In this paper,the transaction cost theory is used to analyze the asset specificity,scale and risk in the process of concluding incomplete contracts and executing contracts between industrial entities,explore the mechanism of influencing industrial economic performance,and clarify the influencing factors of government system supply to achieve optimal performance and the path of institutional change.Based on SCP analysis theory,transaction cost theory and institutional change theory,this paper establishes a theoretical analysis framework of RCP around institutional or rules supply(R),contract performance(C)and institutional performance(P).The development characteristics of circular agricultural industry,the background,purpose,content and change of institutional supply of circular agricultural industry are introduced.Through the uncomplete contract theory perspective,discusses the planting and raising the government and the planting,breeding cycle mode of circular agriculture,industry,agriculture services,the contract between the principal cause incompleteness,the performance mechanism and influencing factors,and uses the dynamic evolutionary game method to simulation analysis of the different interest subject in different constraint conditions of the game equilibrium and optimal decision-making behavior for interests.Based on Transaction Cost Theory,this paper selects the input-output data of agricultural economy in 140 counties of Sichuan Province,and uses the Data Envelopment Analysis(DEA)method to measure transaction cost.The Two Stage Least Square method is used to verify the correlation of specific,scale and risk on economic performance.By sorting out the change process of agricultural circular economy institution,the SBM model is used to calculate the loss of agricultural economic efficiency at the county level and measure the institutional effectiveness in the change process of agricultural circular economy system under the time series.In order to test the above theoretical reasoning and measurement results,this paper selects a typical circular agricultural industry development demonstration county as a case study.By discussing the incomplete contract efficiency of the circular agricultural industry in the demonstration area,it verifies the formation of market performance and institutional effectiveness of the circular agricultural industry system under the combined action of Incomplete Contract,Transaction Cost and Institution.Through the above analysis,this paper mainly draws the following conclusions.(1)The reduction of transaction costs is the common motivation for all subjects in the circular agricultural industry.The circular agricultural industry,which is composed of the government,breeding,planting and agricultural service industry under the combination of planting and breeding mode,is an industrial system connected in series based on the industrial chain of resource utilization of agricultural waste,and is also the dominant mode of current circular agriculture.Reducing the cost of environmental governance,reducing the specific investment,reducing the cost of environmental regulation,increasing the expected revenue,and getting service pay are the different motivations of each subject to participate in the circular agricultural industry.(2)The incomplete contract is the key to the operation and development of the circular agriculture industry,and the breeding industry plays a leading role in the implementation of the contract.Government provides incentives and constraints through institution form a contract with industrial subjects,and the industrial subjects link to form a contract through the resource utilization industry chain.When the breeding choose to participate in agricultural circular economy,they will not easily change strategy,and also play a leading role,guide the planting and service to join,facilitate the industry system performance,incomplete contract in realizing the efficient and orderly operation of the circular agriculture industry.(3)The key to the performance of incomplete contracts is to reduce the transaction costs of individual micro-entities.To reduce the transaction costs of the whole circular agricultural industry,we need to pay attention to the scale and risk.The institution provided by government is dominated by reducing breeding’s transaction costs,and the incentive results are remarkable.In the implementation process of the contract,planting and service decide the choice of implementation strategy according to the change of cost and expected income.Only by effectively reducing the transaction cost of micro-entities in the system,the circular agricultural industry can realize the balanced strategy of each entity.It has been proved that the impact of transaction costs on economic performance is negatively correlated by the three factors of specific,scale and risk.The regulation measures for scale and risk are the key to the rapid development of circular agricultural industry in the next step.(4)The performance of circular agricultural industrial institution is remarkable,but the long-term mechanism needs to be paid attention to for the specific policy performance.From the dynamic evolutionary game process and case analysis,it can be seen that the policy provided by the government to reduce transaction costs has a good stickiness to the participants.The relationship between the institution implementation and economic performance shows an inflection point in which the loss of economic efficiency in time series drops significantly,which proves that the effect of the system implementation is remarkable.The different change of efficiency loss in the comparison between large pasturage counties and non-large pasturage counties confirm the large livestock county‘s institution implementation effect is remarkable,especially in the whole county to promote livestock and poultry waste resource utilization project implement in 2017.However,the implementation time of this specific policy is still short,and it is necessary to continue to track the long-term mechanism to test institution performance.(5)Contract enforcement,Transaction Cost’s reduction,Institution effectiveness,and their synergistic effects promote the development of the circular agricultural industry.County region is the main economic unit of agricultural circular economy.In the case study of the typical demonstration area,the paper found that in the circular agricultural industry at the county level,the agricultural service industry under the planting and breeding mode connects the recycling work between planting and breeding,and promotes the formation of market mechanism.In the process of multi-agent resource matching and contract performance,the optimal strategy choice of each agent fully reflects the important effect of transaction costs.The agricultural circular economy project supplied by the government is the key to promote the development of the circular agricultural industry in the county.Incomplete contract,transaction cost and institution in the industrial system contribute to the development of circulatory agricultural industry at county level.Based on the above research results,this paper puts forward countermeasures and suggestions for the development of circular agricultural industry from the aspects of reducing transaction costs,improving market mechanism and innovating system construction.The innovation points of this paper are summarized as follows:(1)This study expands the research perspective of agricultural circular economy theory.It constructed the RCP analysis framework based on the Industrial Organization Analysis Theory.Meanwhile,its measurement and case study on the agricultural circular economy have obvious new ideas which is focus on the government institutional supply affecting the market parties’ behavior,while the economic performance and institutional performance.(2)There are two innovations in the application of research method:first,this paper use 12-year county data to measure the decisive factors of transaction cost in circular agricultural industry,which is an exploratory application of transaction cost theory on measuring and analyzing the economic behaviors of micro subjects.It is found that risk and scale are the core factors restricting the development of circular agricultural industry.Second,this paper tracks and collects the 4-year operating data of the micro subjects in the sample region,by which is used typical cases analysis method.It verifies the supply performance of the government’s circular agricultural industrial institutions.