Maraschino Cherry Factory + Rooftop Bees = Not Honey
December 6, 2010 3 Comments
Per an article in last week’s Monday edition of the New York Times, a number of beekeepers in Brooklyn were startled recently when their bees began coming home a curious shade of red — and then producing bright-red honey. While the beekeepers were initially perplexed, the mystery didn’t persist for very long. A bit of common-sense guesswork — and a lab test of the honeycomb — pointed to a likely explanation: the bees were getting into the runoff from a local maraschino cherry factory. The maraschino cherry, for those who aren’t sure, is a fully modernized product: a cherry preserved (and de-colored) in alcohol and then soaked in a suspension of corn syrup and Red 40 (a bright red food coloring). The red coloring in the “honey?” Yep. It’s red 40.
This is an interesting story to consider for two reasons. One is that this sort of thing — contamination of honey — is not new. Unless honey is produced under very isolated conditions, it is probable that it contains numerous pesticides and other chemicals. This is because bees are foragers, and because their furry bodies happen to be very good at attracting tiny particles. Adding to these concerns is a practice dubbed “honey laundering.” To skirt tariffs and other barriers, many honey importers – especially Chinese ones — route their honey through other countries on paper, so that they may evade fees and FDA inspection. This honey may, subsequently, be bulked up with things like water and corn syrup, or may even contain antibiotics illegal in this country, such as when the feds seized 64 drums of honey in Philadelphia last June because it contained the potent antibiotic chloramphenicol. Most honey is contaminated. This is only a story because of the red food coloring.
The other reason the red honey story is interesting is because it’s such an obvious market conflict. When asked about the red honey, Andrew Cote, president of the New York City Beekeepers Association, offered as succinct a summary of modern economics as can be delivered:
“…in an interview, Mr. Coté said that the bees were as great a nuisance to the factory as Red Dye No. 40 was to the beekeepers.”
It’s very easy to say that the beekeepers are the victims here. Anyone with even a basic understanding of human nutrition will likely argue that honey is a more important product than maraschino cherries are. Extending this notion further, it’s obvious that bees in general contribute far more to the economy than maraschino cherry producers. We as a society demand both though, however unfortunate it may be that a market for maraschino cherries exists. We can’t simply say that the cherry factory is in the wrong and should do x, y, or z in order to solve the problem.
It’s a complicated economic issue. The factory has the legal right to produce what it does, where it does, how it does. The beekeepers also have the legal right to raise bees, collect their honey, and let them fly around the city pollinating things. The Coase Theorem is a good framework with which to look at this problem. It states that when an externality exists (an externality is a cost or benefit of a transaction not paid for by the parties in the transaction), then the most efficient solution will arise regardless of property rights, assuming there are no significant costs to arranging a solution. In other words, they’ll negotiate it, and come to whichever solution is actually most “worth it” for everyone involved.
In reality, there are all sorts of problems with applying Coase’s ideas. Property rights aren’t clearly defined in this case, namely surrounding where the bees are allowed to fly. In reality, the factory owner could justifiably poison the bees while they were on his property, a step he has been commended for not taking. Why hasn’t he? Because doing so would probably be bad press (and because he might not have sufficient reason for doing so, if the exerminator would be costly — the bees, after all, do not affect his bottom line). Another problem is that transactions between the beekeepers and the cherry factory are not market-based, but negotiations, and ones in which there is incomplete information at that.
There are other potential victims, depending on the scope of the problem: if the nectar affects the bees abilities to pollinate local crops (or simply causes them to ignore those crops in favor of the maraschino juice), those who depend on local bees for pollination could stand to lose revenue. That means local growers and beekeepers are likely to foot most or all of the bill, either by paying the factory to have bee-discouraging devices (like nets) installed, or by paying local property owners to install high-quality nectar sources, so that the bees will choose those (hopefully) over the high-fructose corn syrup.
The factory owner, because he seems to be a conscientious individual who values neighborly affection (his family has run the factory there since 1948), has actually already spent on the issue — namely his time, as the previously-linked article can attest to. It’s possible that he is the rare individual who sees value beyond his ledger, and, though he wouldn’t have to, will spend money on the problem, too, maybe even just by requiring his workers to take the time to use the preventative measures purchased by the beekeepers. That would be, all things considered, a very encouraging outcome. He can hardly be asked to stop making maraschino cherries — until, that is, we all decide to stop buying them.