<p>Providing organic agricultural commodities supports the 3rd and 12th Sustainable Development Goals (SDGs) by ensuring good health and well-being for consumers and promoting responsible production by the farmer. However, practicing organic agriculture may not be feasible due to high operational costs and low productivity. This study develops a cooperative game with a profit-sharing mechanism to encourage the adoption of organic farming practices. The model includes two competitive schemes (full inorganic and partial organic) and two profit-sharing schemes (partial organic and full organic). These schemes account for market demand for organic products, substitution intensity, and yield productivity. The study identifies two conditions under which organic production and profit-sharing schemes are viable. Specifically, a high organic market share, low substitution intensity, and higher yield productivity can significantly boost organic production. Conversely, low market demand and poor yield productivity may violate the superadditivity condition in the partial and full organic profit-sharing models. The results highlight the conditions under which partial and full organic cooperation may fail at specific market, cost, and yield productivity levels. This study addresses a research gap by developing non-cooperative and profit-sharing game formulations for organic agricultural supply chains that incorporate the organic market, substitution intensity, and yield productivity.</p>

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Profit-sharing game to stimulate partial and full organic agricultural supply chains

  • Januardi Januardi,
  • Devi Maulida Rahmah,
  • Ryozo Noguchi

摘要

Providing organic agricultural commodities supports the 3rd and 12th Sustainable Development Goals (SDGs) by ensuring good health and well-being for consumers and promoting responsible production by the farmer. However, practicing organic agriculture may not be feasible due to high operational costs and low productivity. This study develops a cooperative game with a profit-sharing mechanism to encourage the adoption of organic farming practices. The model includes two competitive schemes (full inorganic and partial organic) and two profit-sharing schemes (partial organic and full organic). These schemes account for market demand for organic products, substitution intensity, and yield productivity. The study identifies two conditions under which organic production and profit-sharing schemes are viable. Specifically, a high organic market share, low substitution intensity, and higher yield productivity can significantly boost organic production. Conversely, low market demand and poor yield productivity may violate the superadditivity condition in the partial and full organic profit-sharing models. The results highlight the conditions under which partial and full organic cooperation may fail at specific market, cost, and yield productivity levels. This study addresses a research gap by developing non-cooperative and profit-sharing game formulations for organic agricultural supply chains that incorporate the organic market, substitution intensity, and yield productivity.