Gangyi Wang

The hog industry is the core industry in the field of agriculture and animal husbandry in China, which development is related to the improvement of people’s quality of life. The production of the hog industry has been restricted by environmental regulations, which needs to reduce costs and improve efficiency. Based on the data of 29 provinces from 2008 to 2019, this paper aims to use the stochastic frontier analysis method to calculate the cost efficiency of fattening pigs, sows, and piglets in three stages of pig production and focuses on the impact of environmental regulation policies on cost efficiency. The study found that the cost efficiency of fattening pigs, sows, and piglets in China were 0.77, 0.79, and 0.53, respectively, and the efficiency losses were 23%, 21%, and 47%, respectively. The impact of environmental regulation policies on the cost efficiency of fattening pigs showed an ’ N ’ trend, and the impact on the cost efficiency of sows and piglets showed an inverted ’ N ’ trend. For fattening pigs, increasing the intensity of environmental regulation, and exceeding the second inflection point of the ’ N ’ curve can achieve the dual goals of environmental governance and cost reduction and efficiency increase. For sows, reducing the intensity of environmental regulation appropriately can avoid cost-efficiency loss. For piglets, environmental regulation policies have not effectively incentives the cost efficiency of piglets. In addition, raising the level of technology investment in fattening pigs and sows can achieve cost efficiency gains, and can farmers use emerging financial product tools such as ’ insurance + futures ’ to avoid market risks and efficiency losses.

Although frequent fluctuations in domestic hog prices seriously affect the stability and robustness of the hog supply chain, hog futures (an effective hedging instrument) have not been listed in China. To better understand hog futures market hedging, it is important to study the steady state of intersubjective bidding. This paper uses evolutionary game theory to construct a game model between hedgers and speculators in the hog futures market, and replicator dynamic equations are then used to obtain the steady state between the two trading entities. The results show that the steady state is one in which hedgers adopt a “buy” strategy and speculators adopt a “do not speculate” strategy, but this type of extreme steady state is not easily realized. Thus, to explore the rational proportion of hedgers and speculators in the evolutionary stabilization strategy, bidding processes were simulated using weekly average hog prices from 2006 to 2015, such that the conditions under which hedgers and speculators achieve a steady state could be analyzed. This task was performed to achieve the stability critical point, and we show that only when the value of λ is satisfied and the conditions of hog futures price changes and futures price are satisfied can hedgers and speculators achieve a rational proportion and a stable hog futures market. This market can thus provide a valuable reference for the development of the Chinese hog futures market and the formulation and guidance of relevant departmental policies.