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Journal of Integrative Agriculture  2023, Vol. 22 Issue (2): 623-641    DOI: 10.1016/j.jia.2022.12.013
Agricultural Economics and Management Advanced Online Publication | Current Issue | Archive | Adv Search |
The role of time preferences in contract breach: Evidence from Chinese poultry farmers participating in contract farming

HOU Jing1, 2, ZHOU Li2, Jennifer IFFT3, YING Rui-yao2

1 Business School, Jiangsu Normal University, Xuzhou 221116, P.R.China

2 College of Economics and Management, Nanjing Agricultural University, Nanjing 210095, P.R.China

3 Department of Agricultural Economics, Kansas State University, Manhattan, Kansas 66506, USA

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摘要  

龙头企业+农户契约农业模式在促进小农户大市场的衔接、降低农户市场风险、促进农户增收等方面均发挥了积极的作用。然而,农户违约现象被视为很多发展中国家契约农业可持续发展的主要障碍之一。研究表明,发展中国家的农户具有短视或不耐心的时间偏好特征,且这种特征会对农户在采纳新技术和新项目、设备或结构投资、农场轮作和投入品的选择等涉及短期和长期成本收益等跨期决策方面产生重要影响。中国家禽契约养殖户违约引致的收益和成本之间存在时间间隔,个体如何权衡当前和未来的回报对理解违约至关重要。本文旨在从时间偏好视角考察契约农户的违约决策,数据来源于对中国江苏省家禽养殖户的一项家庭调查和经济学实验。本研究应用贴现效用模型和最大似然技术估计农户的时间偏好,并利用双变量Probit模型检验农户的时间偏好对其生产阶段和销售阶段违约决策的影响。研究结果显示,样本中的家禽养殖户普遍存在短视认知偏差现象,对未来的效用缺乏耐心;短视程度越高的农户其违约概率越大,且时间偏好在生产阶段比在销售阶段发挥更大的作用。异质性分析结果显示,专用性投资和交易成本仅对耐心程度相对较高的农户的违约行为具有显著影响;与大规模农户相比,时间偏好对小规模农户的违约决策的影响更为明显。研究结果对契约稳定性政策以及将行为偏好与农业决策相联系的文献研究具有启示意义。



Abstract  

Farmers’ contract breach behavior is cited as one of the major stumbling blocks in the sustainable expansion of contract farming in many developing countries.  This paper examines farmers’ contract breach decisions from the perspective of time preferences.  The empirical analysis is based on a household survey and economic field experiments of poultry households participating in contract farming conducted in Jiangsu Province, China.  A discounted utility model and a maximum likelihood technique are applied to estimate farmers’ time preferences and the effect of time preferences on contract breach in the production and sales phases are explored with a bivariate probit model.  The results show that, on average, the poultry farmers in the sample are generally present biased and impatient regarding future utility.  The regression results show that farmers with a higher preference for the present and a higher discount rate are more likely to breach contracts, and time preferences play a greater role in the production phase than in the sales phase.  When considering heterogeneity, specific investments and transaction costs promote contract stability only for farmers with a low degree of impatience.  Moreover, compared with large-scale farmers, small-scale farmers’ contract breach decisions are more significantly affected by their time preferences.  These results have implications for contract stability policies and other issues that are impacted by the linking of behavioral preferences to agricultural decisions.

Keywords:  time preferences       contract breach        contract farming        economic field experiments        China  
Received: 07 June 2022   Accepted: 16 November 2022
Fund: This work was supported by the National Natural Science Foundation of China (72003082 and 71573130), the Project of Philosophy and Social Science Research in Colleges and Universities in Jiangsu Province of China (2020SJA1015), the Priority Academic Program Development of Jiangsu Higher Education Institutions, China (PAPD), and the China Center for Food Security Studies, Nanjing Agricultural University, China.
About author:  Correspondence ZHOU Li, E-mail: zhouli@njau.edu.cn

Cite this article: 

HOU Jing, ZHOU Li, Jennifer IFFT, YING Rui-yao. 2023. The role of time preferences in contract breach: Evidence from Chinese poultry farmers participating in contract farming. Journal of Integrative Agriculture, 22(2): 623-641.

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