Firm Efficiency and Returns-to-Scale in the Honey Bee Pollination Services Industry

Abstract

While the demand for pollination services have been increasing, continued declines in honey bee, Apis mellifera L. (Hymenoptera: Apidae), colonies have put the cropping sector and the broader health of agro-ecosystems at risk. Economic factors may play a role in dwindling honey bee colony supply in the United States, but have not been extensively studied. Using data envelopment analysis (DEA), we measure technical efficiency, returns to scale, and factors influencing the efficiency of those apiaries in the northern Rocky Mountain region participating in the pollination services market. We find that, although over 25% of apiaries are technically efficient, many experience either increasing or decreasing returns to scale. Smaller apiaries (under 80 colonies) experience increasing returns to scale, but a lack of available financing may hinder them from achieving economically sustainable colony levels. Larger apiaries (over 1,000 colonies) experience decreasing returns to scale. Those beekeepers may have economic incentivizes to decrease colony numbers. Using a double bootstrap method, we find that apiary location and off-farm employment influence apiary technical efficiency. Apiaries in Wyoming are found to be more efficient than those in Utah or Montana. Further, engagement in off-farm employment increases an apiary's technical efficiency. The combined effects of efficiency gains through off-farm employment and diseconomies of scale may explain, in part, the historical decline in honey bee numbers.

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