Profit allocation in agricultural supply chains: exploring the nexus of cooperation and compensation

• Anjeza Bekolli ^[1] ; Luis A. Guardiola ^[2] ; Ana Meca ^[3]
  1. [1] Agricultural University of Tirana

     Agricultural University of Tirana

     Albania

     
  2. [2] Universitat d'Alacant

     Universitat d'Alacant

     Alicante, España

     
  3. [3] Universidad Miguel Hernández de Elche

     Universidad Miguel Hernández de Elche

     Elche, España

     

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• Localización: Top, ISSN-e 1863-8279, ISSN 1134-5764, Vol. 33, Nº. 3, 2025, págs. 580-610
• Idioma: inglés
• DOI: 10.1007/s11750-024-00692-w
• Enlaces
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• Resumen

  • In this paper, we focus on decentralized agricultural supply chains consisting of multiple non-competing distributors satisfying the demand of their respective markets. These distributors source a single product from a farmer through an agricultural cooperative, operating in a single period. The agents have the ability to coordinate their actions to maximize their profits, and we use cooperative game theory to analyze cooperation among them. The distributors can engage in joint ordering, increasing their order size, which leads to a decrease in the price per kilogram. Additionally, distributors have the opportunity to cooperate with the farmer, securing a reduced price per kilogram at the cost price, while compensating the farmer for any kilograms not acquired in the cooperation agreement. We introduce multidistributor-farmer games and we prove that all the agents have incentives to cooperate. We demonstrate the existence of stable allocations, where no subgroup of agents can be better off by separating. Moreover, we propose and characterize a distribution of the total profit that justly compensates the contribution of the farmer in any group of distributors. We also explore the conditions under which the farmer can be compensated to maximize their revenues when cooperating with all players. Finally, we include a case study demonstrating the application of the model using data gathered from local distributors and farmers.

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