Cross-border fresh produce supply chain: Production decision-making, tax & subsidy policy, and social welfare

JIANG Yun, LI Wei

Systems Engineering - Theory & Practice ›› 2023, Vol. 43 ›› Issue (12) : 3587-3605.

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中国科学院数学与系统科学研究院期刊网
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Systems Engineering - Theory & Practice ›› 2023, Vol. 43 ›› Issue (12) : 3587-3605. DOI: 10.12011/SETP2022-2492

Cross-border fresh produce supply chain: Production decision-making, tax & subsidy policy, and social welfare

  • JIANG Yun1,2, LI Wei1,2
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Abstract

This study focuses on the characteristics of consumers' high demand for freshness in cross-border produce trade and the targeted tax subsidy policies for agricultural produce. By constructing the three-tier supply chain of produce supplier, exporter and importer, and considering the frequently-used trade terms of cross-border trade, this paper discusses supply chain members' optimal decision-making, the preference for policy and trade terms, and the government's fiscal and tax policies formulation. The results show that when the freshness-keeping effort cost factor of cold-chain logistic service meets certain conditions, each supply chain member has a unique equilibrium decision under the two trade terms of free on board (FOB) and cost insurance and freight (CIF), and the variation direction of some optimal decisions influenced by fiscal and tax policies does not change with the change of policy case. Subsidies for the produce supplier can also benefit the exporter and the importer. All supply chain members have the same preference for fiscal and tax policies and trade terms. Based on the social welfare maximization goal of the exporting country, the market scale (sensitivity of market demand to retail prices) of the importing country is an important basis for implementing fiscal and tax policies. Different scale determines the complexity of fiscal and tax policies, and the specific reference threshold of fiscal and tax policy parameters depends on the sensitivity of market demand to changes in retail prices, the unit production cost of suppliers and the minimum market demand. Based on the goal of global social welfare maximization, the freshness-keeping effort cost factor of cold chain logistic service should also be taken into account. In addition, social welfare is also influenced differently by the perishability of fresh produce and the characteristics of importer. In the current critical period of promoting the effective connection between poverty alleviation and rural revitalization, stabilizing foreign trade and expanding domestic demand, this study can provide reference for the government to make fiscal and tax policies on produce.

Key words

cross-border fresh produce trade / cross-border supply chain / fiscal and tax policy / trade terms / (global) social welfare

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JIANG Yun , LI Wei. Cross-border fresh produce supply chain: Production decision-making, tax & subsidy policy, and social welfare. Systems Engineering - Theory & Practice, 2023, 43(12): 3587-3605 https://doi.org/10.12011/SETP2022-2492

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Funding

National Natural Science Foundation of China (71971078); Natural Science Foundation of Hunan Province of China (2022JJ30013)
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