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A simulation of contract farming using agent based modeling

Yuanita Handayati, Togar Mangihut Simatupang, Tomy Perdana, Manahan Siallagan

Abstract


This study aims to simulate the effects of contract farming and farmer commitment to contract farming on supply chain performance by using agent based modeling as a methodology. Supply chain performance is represented by profits and service levels. The simulation results indicate that farmers should pay attention to customer requirements and plan their agricultural activities in order to fulfill these requirements. Contract farming helps farmers deal with demand and price uncertainties. We also find that farmer commitment is crucial to fulfilling contract requirements. This study contributes to this field from a conceptual as well as a practical point of view. From the conceptual point of view, our simulation results show that different levels of farmer commitment have an impact on farmer performance when implementing contract farming. From a practical point of view, the uncertainty faced by farmers and the market can be managed by implementing cultivation and harvesting scheduling, information sharing, and collective learning as ways of committing to contract farming.


Keywords


Contract farming; agent based modeling and simulation; commitment; cultivation and harvest scheduling; supply chain performance.

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DOI: http://dx.doi.org/10.12660/joscmv9n2p28-48

Copyright (c) 2017 Journal of Operations and Supply Chain Management

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This work is licensed under a Creative Commons Attribution 4.0 International License.


ISSN: 1984-3046

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