Study on the Price Design and Contract Stability of "Company + Farmer" Model with Time Preference under Double Moral Hazards

The double moral hazard of ＂company ＋ farmer＂ and the time preference cost of company and farmer was analyzed. According to static game model, it re-vealed that the reason for low compliance rate of ＂company ＋ farmer＂ model was the existence of market risk, namely, the fluctuation of market price, and the stable market price in contracts was actualy a kind of interval, instead of a specific value. Furthermore, the effect of default penalty, market transaction cost and time prefer-ence cost on the stability of contract was studied. The results showed that default penalty, market transaction cost and time preference cost had positive influence on the price interval range of a contract.

Contract stability and default risk control of pig farming in the company and farmer mode

To investigate contract stability in the company and farmer mode and to explore control measures of market price risk and production risk,a multiperiod game model was established in this study.Considering multiple periods and losses caused by deaths simultaneously,a stable contract price interval depending on the breaching penalty,transaction cost,spot market price,and quantity of pigs was observed.Results indicate that the higher the penalty and transaction cost savings,the better the stability of the contract;the contract price should be negotiated around the weighted average of the spot market price.When the production risk is higher,hog insurance can significantly improve the contract stability;when the market price is lower,hog price index insurance improves the contract stability by guaranteeing the company income;when the market price is higher,the profit-returning mechanism improves the stability by protecting farmers incomes.Applying three measures simultaneously results in the best stability.Examples based on data from 2014 to 2018 in Henan Province,China,were given.