Are All Colonies Created Equal? The Role of Honey Bee Colony Strength in Almond Pollination Contracts

This paper examines how honey bee population dynamics, the scale and timing of almond bloom, and unmarketability of almond honey interact to create misaligned incentives for growers and beekeepers in the California almond pollination services market. We combine economic contract theory with data from the first pollination contract survey to examine the design of pollination contracts. 89.2% of respondents used contracts with minimum colony population requirements, suggesting that all colonies are not considered to be equal providers of pollination services. Contracts that involved enforcement every year provided the highest pollination fees on average, while those with no enforcement provided the lowest fees. We contribute to the literature regarding pollination services by demonstrating that the number of hives and price per hive present an incomplete picture of almond pollination transactions without information regarding colony strength requirements and enforcement. We also provide a theoretical rationale for why almond pollination agreements have anecdotally become more formal over time: as the marginal value of colony strength increases, the grower offers the beekeeper stronger incentives to provide high colony strength. California almond production is an extreme case of a crop relying almost solely on managed pollinators, but ultimately could reflect the future for many pollinator-dependent crops if pollinator populations continue to decrease while monoculture crop production increases.