Cooperative game theory approach to develop an incentive mechanism for biopesticide adoption through farmer producer organizations.

Biopesticides have been recognized as viable alternatives to chemical pesticides in controlling agricultural pests for plants and reducing harmful chemical residues. However, small and marginal farmers are facing challenges while adopting biopesticides, namely, high cost and complicated application techniques, resulting in a low level of farmer acceptance. Accordingly, Farmer Producer Organizations (FPOs), voluntarily formed by farmers, develop mutual technical assistance among their members to solve the technical problems of biopesticide adoption. This study assumes that as a new form of farmer cooperative, FPOs have the potential to promote biopesticide adoption through the implementation of collective pesticide adoption (CPA). Along this line, this paper uses a cooperative game-based hybrid method to develop an incentive mechanism of biopesticide adoption for FPOs to implement CPAs. First, we construct a CPA decision model for mixed pesticides (i.e., biopesticides and chemical pesticides) based on multichoice goal programming (MCGP) to compromise the conflicting objectives regarding cost efficiency and chemical residue reduction, thereby obtaining the optimal total cost of pesticide adoption. Second, recognizing the optimal total adoption cost as a baseline, we devise a cooperative game-based cost allocation scheme to maintain farmers' voluntary participation in FPOs. This study demonstrates that the CPA implemented based on our proposed models can at least match if not surpass the economic and environmental performance of farmers' independent pesticide adoption (IPA). We further demonstrate that the proposed cooperative game solution is more suitable for the FPO's cost allocation issue than the eminent solutions, such as the Shapley value.