10.3. Economic valuation at larger scales

Crop production (supply) is the product of yield (tonnes ha-1) and cultivated area (ha). Lower crop yield (or slower yield growth over years) generated by the lack of adequate pollination can affect production at regional, national or global scales (Garibaldi et al., 2011). In this case, cultivation of more area to compensate for production losses is a likely outcome and should be included in valuation. Another likely outcome is the increase in the market price for the harvested product (Winfree et al., 2011). Valuation at larger than local scales should also account for the welfare of producers as well as consumers (Gallai et al., 2009; Winfree et al., 2011). In economic terms, the welfare of producers can be described as the producer surplus (here we will focus on the net income approach following Winfree et al., 2011), and the welfare of consumers can be described as the consumer surplus (Fig. 20) (Southwick and Southwick, 1992). In addition, it is important for decision making to consider how the value of honey bee pollination to crops changes spatially across the study region (Chaplin-Kramer et al., 2011; Lautenbach et al., 2012).

         Here we discuss quantifying the extent to which honey bee numbers affect crop production value loss or gain at the regional scale. Changes in honey-bee abundance within a region will impact social welfare (SW) in three ways: through the aggregate net income of the crop producers in the affected area (NIr), the aggregate net income of producers outside the affected area but sharing the same market (NIo), and the consumer surplus (CS) (Winfree et al., 2011).

equation12

         The net income because of a certain variation (suppose losses) in the number of hives (equation02) for producers within (NIr) and outside (NIo) an affected area can be estimated similarly to that given above for the local scale:

equation13

         For producers within the affected area, the loss of honey bees can decrease yield (equation06) in comparison to the yield previous to the loss of honey bees (equation10) and increase crop price (equation14). Therefore, net income can be reduced because of lower yield on the one hand, but increased because of higher prices on the other. The net outcome will depend on the relative changes in yield and crop prices. In addition, lower yield will reduce the variable costs (equation15) such as costs to harvest and transport crop yield. A significant decrease in the number of honey bee colonies will likely increase the cost of renting each hive (equation16) and modify the number of hives each producer rents (equation17). For producers outside the affected area, no change in yield (equation18) or variable costs (equation19) may happen, but net income is influenced by changes in crop price and probably by changes in the cost of renting a hive. Finally, it is important to note that equation14 will be a function of the amount of crop production (tonnes) that decreases in the affected area in relation to the total production traded at the market and of the ability of producers to increase crop area to compensate for lower production (i.e. the price elasticity of supply) (Fig. 20) (Garibaldi et al., 2011).

         Consumer surplus occurs if consumers are willing to pay a price for the crop product that is higher than market price. Therefore, price increases resulting from honey bee losses will reduce consumer surplus (Fig. 20). Estimating the change in consumer surplus requires estimation of the demand curve using questionnaires or historical market data. The estimations presented here for total welfare effect of a certain variation in honey-bee numbers will also require the estimation of equation14 which can be obtained from the price elasticity of supply and the current crop prices (Fig. 20) (for more details see Winfree et al., 2011). The rest of the data required are the same as discussed in sections 10.2. and 10.3.

         We have limited ourselves here to a brief introduction of the key factors for analysing the value of honey bees as pollinators of agricultural crops at a regional scale. The social welfare value obtained with these models depends on the quality of the data gathered. Correspondingly, it is important to study how the resulting values for social welfare change with variation in the assumed functional forms or parameter estimates (i.e. sensitivity analyses; the same is true for the local scale valuation presented before). The functional form of the number of hives on crop yield has not been reliably estimated for most crops at field scales; this is a crucial knowledge deficit in our understanding of the benefits of honey bees to agricultural production.