The native seed industry: Expermimental market observations of big buyer influence

Increasing frequency of fires and focus on energy development in the Western US means a surge in reclamation needs. Government policy significantly influences demand for reclamation activities and is prioritizing use of native plants to improve reclamation success. However, supplies of many native seed species are inadequate to meet current reclamation goals. The Bureau of Land Management (BLM) aims to implement policy changes to smooth demand. We conducted laboratory market experiments analyzing effects of monopsonistic power on price, quantity traded, and earnings under different institutional structures: forward (contracting) or spot (preproduction without contracting) delivery; and constant (seller earnings are constant and known) or variable demand (seller earnings randomly adjusted without notice). BLM would increase native seed supplies most by implementing forward contracting in addition to smoothing demand. We also discuss BLM's dual role as big buyer and regulator and associated implications for market efficiency.