The Business of Bees: A Sticky Situation for the Agricultural Industry
By: Lauren Nunes & Lauren Rozenberg
The Ivey Business Review is a student publication conceived, designed and managed by Honors Business Administration students at the Ivey Business School.
Current Beesiness Climate
Bees are in danger of going extinct. Although they may be most known for being a summer barbeque annoyance, bees play an integral role as pollinators in our food supply, and therefore the economy. Global bee populations have been declining over the last 60 years, becoming a more critical issue in recent years, with the Canadian Species at Risk Act (SARA) listing species of bumblebee as “endangered” in 2018. From pollinating the food in people's everyday meals to providing farmers with successful crops and employment, bees are necessary and their population decline requires more attention from the public.
The Sticky Situation
The Canadian economy will bear the brunt of the bee population decline. The Canadian canola farming sector contributes C$19.3 billion to the annual GDP, more than any other crop, and keeps 249,000 Canadians employed. One sector heavily relying on bees puts it at risk of decline with bee populations falling. However, the Canadian canola industry's suffering is just the tip of the iceberg. It is found that if all pollinators were to go extinct, then global agriculture yield would decrease by 4 to 6 percent.
Why the Bees Stopped Buzzing
It’s no coincidence that bee populations have declined as climate change has worsened; bees like routine, and climate change disrupts their biological schedules as plants are flowering earlier than they used to. Moreover, the lasting effects of increased temperatures, along with habitat loss from deforestation and drought, further exacerbate the decline of bee populations. Though climate change is a contributor to the decline of bees, the usage of pesticides has also played a role in the loss of bee populations. In contrast to climate change, addressing the overuse of pesticides is far more actionable by stakeholders in the agricultural sector. While farmers use pesticides with the goal of managing harmful insects and increasing crop yields, these chemicals ultimately damage the greater ecosystem.
This means that a farmer's choice to start using chemical pesticides must be thoughtful, as the effects follow the farm and the bees even from first exposure for years to come. Chemical pesticides impact bee populations, with adverse impacts on the bees’ memories, learning, and ability to reproduce. Once a farmer decides to use pesticides in their operations, a bee’s life is irreparably changed not only for them but for their offspring as pesticide toxicity is transgenerational and harmful effects are passed through generations of bees as they reproduce.
Moreover, if bees cross-pollinate between a farm that uses pesticides and neighbouring properties that don’t, the presence of pesticides spreads and increases the risk of pesticide contact with future pollinators. Because of this carryover and toxicity that lives within bees and their colony for years, it is important that farmers refrain from pesticides, as it could affect the entire bee population in the region. The long-lasting and easily transmittable nature of pesticides makes it even more important for the government to take action because one farm stopping the use of pesticides is not enough to solve this sticky situation. Overall, what started as a way to help farmers improve crop yield, has actually turned into the reason farmers might be losing their most important partners.
The Bee-ssentialness of Bees
It is clear that bees have an effect on the agriculture industry, but what are the hidden effects of bees? The bees as pollinators are major contributors to the food chain and have effects from food and beverages to cosmetics. Food retailers are reliant on the agriculture business to be steady, otherwise resulting in price changes and a lack of inventory. The decreased crop yield will result in shortages of food and therefore increase prices, ultimately falling onto the customers. An industry less likely to come to mind when thinking of bees is cosmetics. From go-to drugstore beauty companies to aspirational brands such as LVMH, many cosmetic companies use plants and flowers pollinated by bees for their aromas. Cosmetic and food retailers alike are concerned about the future of our environment and whether or not the bees will be in it, and consumers should be too.
Our Un-Bee-Lievable Recommendation
The Canadian government is recommended to push the transition in industrial agricultural practices from chemical pesticides to the biopesticide, Bacillus thuringiensis (B. thuringiensis), which is a natural bacterium pesticide found in soil. It has proteins which are toxic to insect larvae when consumed and it has been proven to be safe and effective for pesticide control. In 1998, B. thuringiensis-protected cotton in the United States yielded an estimated net savings of approximately $92 million, with additional benefits of reduced toxin levels.
Commercial Incentives
To promote the use of biopesticides in the agricultural sector, it is recommended that a label be developed for agricultural products produced with B. thuringiensis, indicating that the product was "sustainably sourced without chemical pesticides". This label, similar to the popular non-GMO label, would allow companies such as Cargill to convey their sustainably sourced logo to end-consumers through the supply chain, such as Kelloggs.
Consumers make daily decisions based on various product attributes, and research has demonstrated a positive correlation between consumer perceptions of "non-GMO" labels. As consumer behaviour continues to evolve, a study by IBM found that 51 percent of respondents consider environmental sustainability more important than they did 12 months ago. Therefore, by positively influencing consumer perceptions, the benefits of using biopesticides could be transmitted down the supply chain, differentiating agricultural companies. Overall, implementing a sustainably sourced label for agricultural goods produced with biopesticides could positively impact consumer behaviour and promote sustainable practices in the agricultural industry.
What Has Made This Change Sticky in the Past?
The full adoption of biopesticides is hindered by several obstacles, including a limited supply, higher costs, concerns over shelf life, and compatibility with conventional pesticides. The shortage is largely due to the high cost of refining commercial products, the transition to different methods of preparation and dose determination, and susceptibility to environmental factors. Government intervention and support, such as subsidies and providing instructions and resources for research and preparation of biopesticides, could help alleviate the high costs.
Furthermore, biopesticides are highly targeted, requiring growers to purchase and receive training on multiple types to cover all pest concerns. There are also challenges related to the shelf life and maintenance of microbial viability, as well as compatibility with chemical pesticides. Despite these challenges, biopesticides are faster and easier to develop and register, and they are quickly gaining market share. Addressing these obstacles through government support and industry innovation could lead to increased adoption of biopesticides and more sustainable pest control methods.
Where Must This Change Bee Made?
To address this issue, the Canadian government should start with Alberta, Manitoba, and Ontario, where honey producers have reported losing on average 40 to 45 percent of their bees this past year. The All-Ireland Pollinator Plan could serve as a guiding point for these programs, which already assisted in the development of pollinator protection strategies in Scotland, Norway, and the Netherlands. The Canadian government could adopt similar objectives, such as making Canada pollinator-friendly through the use of biopesticides, raising awareness about the threat of extinction, managing pollinators, expanding knowledge, and measuring success. It is essential to prioritize the protection and preservation of honeybees because they are vital to maintaining our food systems and the overall health of our environment. Implementing targeted pilot programs and following the five objectives could help address the concerning loss rates and contribute to the conservation of these critical pollinators.
Why is This Bee-nificial for the Government?
The overreliance on chemical pesticides has become one of the most urgent challenges to environmental sustainability and public health. Widespread use of pesticides has led to increasing resistance from harmful insects, which has in turn worsened the dependence on pesticides and increased the development of harmful pesticides. This problem has deep-seated socio-economic and political causes, including multi-level sales ranging from farmers to the global market. To address this issue, there is a need for policy alignment and efforts that combine socio-economic and political layers. The government should find ways to support farmers' decision-making and actions to emphasize the critical role of farmers in the process of achieving independence from chemical pesticides.
How Will This Transition Pollen to Place?
Subsidies and Increased Regulations
The Canadian government should increase accessibility to alternative pesticides in production by implementing a subsidy scheme, similar to the one introduced in China (Zero Growth Action Plan for Pesticide Use). A study on Chinese rice farmers showed optimistic prospects for the widespread use of biopesticides in developing countries. However, the study also revealed that the penetration rate and proportion of pesticides used were below the desired level. Implementing a subsidy scheme for alternative pesticides and prohibiting the use of harmful chemical pesticides could promote sustainable practices in the agricultural industry and protect public health.
The Canadian government could follow the EU’s lead in banning 60 plus 229 specifically "not approved" pesticides that are highly hazardous, by similarly prohibiting the mass use of toxic pesticides. Alternatively, the government could consult the Pesticide Action Network (PAN) North America, which provides an updated list of 338 highly hazardous pesticides that must be phased out by 2030.
Furthermore, one of the drawbacks of biopesticides is that increased ramp-up time, management, and labour costs render them more costly relative to traditional pesticides. The increased costs associated with transitioning to biopesticides should be supported by the government to align with the growing regulatory trend against chemical pesticides. To aid in this transition, dialogue between the government and agricultural companies is encouraged to promote awareness of biopesticide use. Furthermore, the government should financially support the agricultural industry through this transition through tax credits, or a government support portal, similar to those implemented by the OECD.
Private-Public Partnership
To expedite the adoption of B. thuringiensis and encourage agricultural companies to embrace biopesticides, it is suggested that they establish a public-private partnership (PPP) to increase the availability of biopesticides. AEF Global, a company that specializes in the production of biopesticides, is a promising candidate for this partnership. By forming a PPP, the private sector's innovation and technology could be combined with the public sector's incentives to efficiently complete projects within the allotted budget and time frame. This approach could accelerate the transition to more sustainable pest control methods, benefiting both the agricultural industry and the environment.
Climate chaos is real. One of every three bites that every person eats is connected to pollinators. Action must be taken urgently to ensure the survival of the bee population, agricultural industry and nutrition of Canadians.
