Recently, Professor Yu Jianyu from the Department of Applied Economics at our institute, as the first author, has had her paper Quality and Quantity Incentives under Downstream Contracts: A Role for Agricultural Cooperatives? accepted for publication in the American Journal of Agricultural Economics (AJAE) and is forthcoming in print. Founded in 1919, the AJAE is an internationally recognized authoritative academic journal in the field of agricultural economics, with an impact factor of 3.757 in 2021.

As consumer demand for high-quality and safe food continues to increase, the global agricultural and food value chain is undergoing organizational changes: collaboration between upstream and downstream players is becoming increasingly close. A common organizational model is the "company + cooperative + farmer" model. In this model, upstream farmers form agricultural cooperatives and collaborate with downstream processors, retailers, and other enterprises, ensuring the quantity and quality of agricultural products and enhancing the value of the agricultural and food value chain. However, existing literature does not provide a consistent answer regarding the effectiveness of cooperatives. This paper compares and analyzes the incentive effects of downstream enterprises' procurement contracts on upstream farmers' output and agricultural product quality under different production organization models, exploring the effectiveness of the "company + cooperative + farmer" organizational model in improving the quality and quantity of the industrial chain, and providing a new explanation for the positive role of cooperatives in upstream and downstream collaboration. The study first examines the optimal contract between downstream companies and farmers under the "company + farmer" model.

The study finds that when downstream enterprises cannot observe the quality of individual farmers' agricultural products, agricultural product procurement contracts can only pay prices based on the average quality of the agricultural products. In this situation, if the procurement contract is not public but a secret contract that can be overturned and renegotiated, downstream enterprises will have an incentive to reduce the quality premium of agricultural products, thereby affecting farmers' incentives to improve quality and increase output, ultimately leading to a decline in the overall quality and output of agricultural products. The paper further introduces cooperatives as intermediary organizations connecting with enterprises in the industrial chain to examine the optimal contract design of enterprises under the "company + cooperative + farmer" model. Research has found that contracts between cooperatives and downstream enterprises can effectively prevent opportunistic behavior by enterprises under implicit contracts. Furthermore, enterprises, as third parties, provide incentives for the overall quality of cooperatives, overcoming inefficiencies caused by free-riding among cooperative members. Ultimately, cooperatives and enterprises form a community of shared interests, effectively incentivizing farmers to improve quality and increase yields, maximizing the overall value of the industry chain. This research not only explains the role of agricultural cooperatives in collective brand building in developed countries but also provides an organizational arrangement and contract design approach for developing countries with underdeveloped quality control systems to improve the quality of their agricultural and food industry chains.

The Applied Economics program at the Research Institute of Economics and Management, Southwestern University of Finance and Economics, covers research fields including microeconomic theory, environmental economics, labor economics, agricultural economics, industrial economics, and regional and urban economics. In recent years, numerous academic achievements have been published in authoritative international journals such as American Journal of Agricultural Economics, Games and Economic Behavior, International Economic Review, Journal of Development Economics, Journal of Economic Geography, Journal of Environmental Economics and Management, Journal of Public Economics, Journal of Urban Economics, Scandinavian Journal of Economics, as well as top-tier Chinese journals such as Social Sciences in China, Economic Research Journal, and Management World.

The Department of Applied Economics currently has 24 full-time faculty members, all holding doctoral degrees from internationally prestigious universities, demonstrating outstanding comprehensive strength in teaching and research. In recent years, while diligently performing teaching and academic research, the faculty of the Department of Applied Economics has actively participated in policy consulting services, undertaking numerous provincial and ministerial-level and local government policy research projects, leveraging the disciplinary and talent advantages of a university think tank to serve the major decision-making needs of the Party and the State and regional economic and social development.

Yu Jianyu is a professor at the Institute of Economics and Management, Southwestern University of Finance and Economics, and holds a PhD in Economics from the Toulouse School of Economics, France. Her research focuses on the application of industrial economics in agricultural and food economics. In the past five years, she has concentrated on research into food safety, the agricultural and food industry chain, agricultural cooperatives, and e-commerce platform strategies. Her research has appeared in international journals including American Journal of Agricultural Economics, European Review of Agricultural Economics, China Economic Review, and Journal of Retailing, as well as leading Chinese journals such as Economic Research Journal, The Journal of World Economy, The Quarterly Journal of Economics, and World Economic Papers. She has led one Youth Project and one International Exchange Project under the National Natural Science Foundation of China, and serves as a referee for multiple academic journals.