Trade Off Between Economic Environmental And Social Objectives In Pesticide Supply Chains

Biopesticides are considered as effective measure to combat environmental consequences brought by chemical pesticides, however, due to the comparatively high price of biopesticides and unreasonable government subsidies, the trade-off between economy, society and environment represents a daunting task for pesticide supply chains. This study establishes a pesticide supply chain including manufacturer(s), retailer and government to study the production and sales strategies of pesticides in monopoly or duopoly markets. In the monopoly market, we only consider the biopesticides production strategies of a chemical pesticide manufacturer; in the duopoly market, we subdivide the chemical pesticide into high toxicity and low efficiency chemical pesticide (HTLE) and low toxicity and high efficiency chemical pesticide (LTHE) to look into the competition issue between the heterogeneous manufacturers in pesticide supply chain considering biopesticide adoption. Based on the equilibrium and numerical analyses, we find that: first, only when the government subsidy falls within a reasonable range, it can incentivize the chemical pesticide manufacturer to product biopesticides in both monopoly and duopoly markets. Interestingly, subsidy policy has different impact on monopoly market and duopoly market, i.e., the subsidy can improve the profit of pesticide supply chain in monopoly market, however the consumer surplus and social welfare is greater in duopoly market with the increase of subsidy. Second, the profit of pesticide supply chain is better after launching biopesticide and the retailer gains more profits in duopoly market than in monopoly market with the increase of farmer's biopesticide acceptance. Third, no matter in monopoly market or duopoly market, the launch of biopesticides can decrease the influence of environment pollution, and less environmental impact in monopoly markets.