Bees and pollination play an important supporting actor role in economic discussions of how and when markets will work well.
In a 1952 article (Economic Journal, \”External Economies and Diseconomies in a Competitive Situation\”) , James Meade suggested some problems that could arise between an apple farmer and a beekeeper. In Meade\’s example, if an apple farmer thought about expanding the orchard, part of the economic benefit would be that local bees could make more honey. However, the apple farmer would not benefit from the gains in honey-making, and thus would have a reduced incentive to expand the orchard. Conversely, if a beekeeper and honey-producer is considering expanding the number of bees, the apple farmer would also benefit. However, because the beekeeper would not benefit from the increased apple production, there was a reduced incentive to increase the number of bees.
But Meade\’s example was hypothetical. In a 1973 article, Stephen Cheung published \”The Fable of the Bees: An Economic Investigation\” (Journal of Law and Economics, April 1973). After considering actual contracts and pricing between beekeepers and apple-producers in Washington state, he reported that in the real world, they were coordinating their efforts just fine.
I spelled out these arguments three years ago in \”Do Markets Work for Bees?\” (July 10, 2014). Bees and market were in the news, because of a fear of Colony Collapse Disorder. Here\’s the cover of TIME magazine on August 19, 2013. By 2014, President Obama had appointed a Pollinator Health Task Force to create a National Pollinator Health Strategy, with representation from 17 different government agencies.
So here we are, three years later. How have markets adapted to the danger of \”a world without bees,\” as the TIME magazine cover put it? Shawn Regan tells the story of \”How Capitalism Saved the Bees:A decade after colony collapse disorder began, pollination entrepreneurs have staved off the beepocalypse,\” in the August/September issue of Reason magazine.
The short take is that Colony Collapse Disorder is real, although its causes remain a source of some dispute. The Environmental Protection Agency lists the possible causes like this:
- Increased losses due to the invasive varroa mite (a pest of honey bees).
- New or emerging diseases such as Israeli Acute Paralysis virus and the gut parasite Nosema.
- Pesticide poisoning through exposure to pesticides applied to crops or for in-hive insect or mite control.
- Stress bees experience due to management practices such as transportation to multiple locations across the country for providing pollination services.
- Changes to the habitat where bees forage.
- Inadequate forage/poor nutrition.
- Potential immune-suppressing stress on bees caused by one or a combination of factors identified above.
As Regan reports:
\”And beekeepers are still reporting above-average bee deaths. In 2016, U.S. beekeepers lost 44 percent of their colonies over the previous year, the second-highest annual loss reported in the past decade. But here\’s what you might not have heard. Despite the increased mortality rates, there has been no downward trend in the total number of honeybee colonies in the United States over the past 10 years. Indeed, there are more honeybee colonies in the country today than when colony collapse disorder began.\”
The reason is straightforward. Beekeepers have had to deal episodes of colony collapse disorder on average every decade or so. They fight back against the bee diseases as best they can. And they create new hives. Here\’s Regan:
\”There have been 23 episodes of major colony losses since the late 1860s. Two of the most recent bee killers are Varroa mites and tracheal mites, two parasites that first appeared in North America in the 1980s. … Beekeepers have developed a variety of strategies to combat these afflictions, including the use of miticides, fungicides, and other treatments. While colony collapse disorder presents new challenges and higher mortality rates, the industry has found ways to adapt.
\”Rebuilding lost colonies is a routine part of modern beekeeping. The most common method involves splitting a healthy colony into multiple hives—a process that beekeepers call “making increase.” The new hives, known as “nucs” or “splits,” require a new fertilized queen bee, which can be purchased from a com-mercial queen breeder. These breeders produce hundreds of thousands of queen bees each year. A new fertilized queen typically costs about $19 and can be shipped to beekeepers overnight. (One breeder\’s online ad touts its queens as “very prolific, known for their rapid spring buildup, and…extremely gentle.”) As an alternative to purchasing queens, beekeepers can produce their own queens by feeding royal jelly to larvae.
\”Beekeepers regularly split their hives prior to the start of pollination season or later in the summer in anticipation of winter losses. The new hives quickly produce a new brood, which in about six weeks can be strong enough to pollinate crops. Often, beekeepers can replace more bees by splitting hives than they lose over the winter, resulting in no net loss to their colonies.
\”Another way to rebuild a colony is to purchase “packaged bees” to replace an empty hive. (A 3-pound package typically costs about $90 and includes roughly 12,000 worker bees and a fertilized queen.) A third method is to replace an older queen with a new one. A queen bee is a productive egg-layer for one or two seasons; after that, replacing her will reinvigorate the health of the hive. If the new queen is accepted—as she often is when an experienced beekeeper installs her—the hive can be productive right away.
\”Replacing lost colonies by splitting hives is surprisingly straightforward and can be accomplished in about 20 minutes. New queens and packaged bees are also inexpensive. If a commercial beekeeper loses 100 of his hives, replacing them would come at a cost—the price of each new queen, plus the time required to split the existing hives—but it is unlikely to spell disaster. And because new hives can be up and running in short order, there is little or no lost time for pollination or honey production. As long as some healthy hives remain that can be used for splitting, beekeepers can quickly and easily rebuild lost colonies.\”
Of course, there are still legitimate concerns about the health of wild bees, and their role in natural ecosystems. But it seems fairly clear that the buzz over how colony collapse disorder threatened an imminent bee extinction–\”a world without bees\” and \”beemaggedon\” and all the rest–was grossly exaggerated. As the EPA reports:
\”Once thought to pose a major long term threat to bees, reported cases of CCD have declined substantially over the last five years. The number of hives that do not survive over the winter months – the overall indicator for bee health – has maintained an average of about 28.7 percent since 2006-2007 but dropped to 23.1 percent for the 2014-2015 winter. While winter losses remain somewhat high, the number of those losses attributed to CCD has dropped from roughly 60 percent of total hives lost in 2008 to 31.1 percent in 2013; in initial reports for 2014-2015 losses, CCD is not mentioned.\”
For more detail on economic adaptations to colony collapse disorder, and how actions by beekeepers have kept any economic losses very small, a useful starting point is the January 2016 working paper, \”Colony Collapse and the Economic Consequences of Bee Disease: Adaptation to Environmental Change,\” by Randal R. Rucker, Walter N. Thurman, and Michael Burgett.