The Research On Agricultural Supply Chain Financing Considering Government Subsidy And Corporate Social Responsibility

Agriculture has always been one of the important industries for the development of economy in China,and agribusiness is an important driving force for the high-quality development of economy.With the continuous promotion of China’s agricultural modernization,the demand for capital is also on the rise.Nowadays,the imperfect financial institutions in rural areas,outdated financial service products,backward credit system construction and lack of effective collateral for farmers make the financing for agricultural development increasingly difficult,which hinders the rapid development of agriculture and the prosperity of society.The solution to the financing problem of farmers cannot be achieved without the strong support of the government and the core agricultural leading enterprises.China has been promoting inclusive finance for nearly a decade,and the government has given real money to rural areas through financial subsidies and used loan subsidies to mobilize financial institutions to finance and provide preferential services for agricultural business entities.The core leading enterprises in the agricultural supply chain have a large amount of transaction data information of upstream and downstream enterprises and farmers,which can solve the financial difficulties of farmers and other capital-bound subjects due to the lack of collateral and credit information.On the one hand,core enterprises can provide guarantee for other members in the supply chain when they need to get loans from financial institutions.On the other hand,they can directly provide funds to upstream and downstream enterprises and agricultural business entities,thus ensuring the smooth operation of the whole agricultural supply chain.In this context,this paper constructs a supply chain consisting of a farmer with financial constraints and a socially responsible core enterprise,and mainly studies two types of supply chain financing models led by core enterprises: core enterprise guarantee financing and core enterprise financing.First,this paper studies and compares the optimal decisions of supply chain members under the two financing models without subsidies,analyzes the effects of guarantee ratio and financing interest rate on supply chain members,and gives the preferences of farmers and core enterprises on financing models from the perspective of expected profit or utility maximization;second,on the basis of the unsubsidized scenario,the optimal decisions of supply chain members under government subsidized interest rate are studied.Finally,the optimal decisions of supply chain members in the two financing modes with and without subsidies are compared vertically,and the effects of subsidies are analyzed to confirm the effectiveness of subsidies and provide reference for the government to decide reasonable subsidized interest rate.The main conclusions obtained from this study are as follows:(1)In the case of no subsidy,when the guarantee ratio is fixed,farmers should choose core enterprise financing when the financing interest rate is high,and core enterprises are more willing to provide guaranteed financing;when the financing interest rate is low,farmers can get higher expected profit by choosing guaranteed financing,but it is more beneficial to core enterprises to provide direct financing at this time.(2)In the case of no subsidy,when the financing interest rate is fixed,if the guarantee ratio is high,farmers should choose direct financing and core enterprises should choose to provide guaranteed financing;if the guarantee ratio is low,farmers should choose guaranteed financing,while core enterprises tend to provide direct financing.(3)In the case of subsidy,when the subsidy rate is kept within a certain range,core enterprises always prefer to provide direct financing for farmers regardless of the interest rate;when both the subsidy rate and the financing interest rate are high or low,core enterprises also prefer to provide direct financing for farmers.(4)When the subsidy rate is high and the financing interest rate is low,the core enterprises are more willing to provide guarantee services for farmers;or when the subsidy rate is low and the financing interest rate is high,the core enterprises also prefer guarantee financing.(5)Without subsidies,the financing preferences of farmers and core enterprises are conflicting,but when the government provides subsidy at an appropriate rate,their preferences may be same,indicating that the subsidy can coordinate the financing choices of both,allowing farmers and core enterprises to achieve a win-win situation.(6)Subsidies do not always have a positive effect on farmers’ profits.Within a reasonable range,the subsidy can increase farmers’ income,but when the subsidy rate exceeds a certain threshold,it has a suppressive effect on farmers’ profits.(7)The subsidy decreases farmers’ bankruptcy threshold,indicating that the subsidy can reduce the bankruptcy risk of farmers.Moreover,the interest rate of bank financing decreases under subsidy which indicates that the subsidy can also cut down the high cost of financing for farmers.