APPALACHIAN GINSENG FOUNDATION

                   A project of Aappalachia -- Science in the Public Interest       
            #6 Winter, 2000                       AGF Newsletter

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Ginseng Crop Protection

     Two major problems loom before the virtually wild ginseng grower;

1. The crop could be stolen by poachers anytime during the long growing period;
2. The harvested root could be sold at a depressed price because the harvester does not recognize the true quality of the product or has a restricted access to the competitive market and fair prices.

Poaching

     Ginseng poaching, or the practice of digging up another person's ginseng roots, is quite common in Appalachia and in other growing areas. Ever since pioneer days Americans thought of ginseng like wildlife or fish as part of the commons which is there for the taking. While wildlife management has become more restrictive, still there are far fewer law enforcers for protecting ginseng than for deer or rabbits. The wild crafter who hunts for roots often continues a practice handed down from generation to generation. Poaching has continued after the lands were surveyed, fenced, and the frontier long since faded. Poaching continues as individuals roam the country, not just the more legitimate wild crafters who have good harvest practices. The weekend poachers can quietly slip across private and public wooded lands with little equipment and without obtaining permission to harvest on someone else's land.

In recent years poaching has become a more widespread problem as the high price of wild ginseng is known to more people. Traditional diggers, or "sangers," or wild crafters are as shocked as others by this influx of unwelcome guests. The traditional gatherer refrained from digging immature ginseng plants, harvested only late in the season after seeding had commenced, and sowed the seeds from the dug plants in the area for future plants. They were concerned because this was their income. Fly-by-night, or weekend ginseng diggers, want quick returns by harvesting before the official season opens in late summer, dig immature (less than five year old) wild ginseng, and pocket the seed with no intention of reseeding the poached area. If these newcomers are left unregulated and uncontrolled they will be the early death of the promising future virtually wild ginseng industry.

Secrecy. Most people regard the best defense for their ginseng is not telling others that their property contains ginseng plants. However, this secrecy has a spotty record and does not guarantee that the ginseng will not be poached, only that the odds are greater that it will escape detection throughout the maturing process. The growing difficulty is that poachers may be local enough to know the lay of the land as well as do the legitimate growers. They know where there are shady slopes and well drained soils and where they can find more ginseng. They can even learn to use the GIS (Geographical Information System) data in somewhat the same manner that Dan Bond is doing at the AGF. The basic GIS data, especially in states like Kentucky, is available to the public. The computer world is becoming increasingly sophisticated and some who could be associated with poachers could pinpoint ideal ginseng growing areas -- provided they acquire the skills and have a top of the line computer. These types could refine their poaching operation to choice areas. This may not happen because there are better ways for computer whizzes to make money, but at least the thought drives ginseng growers to deeper secrecy.

Seller Beware!

      A second problem related to virtually wild ginseng is that of finding a fair market for the product. There are many buyers out there, and some are trusted good ole boys who have been known since grade school. Others have a kind face, a pleasant smile and an easy way about them. They cover their snake oil profession with cheap after shave lotion. Many growers are not handy at marketing and do not recognize the true worth of the wild or virtually wild crop. They may even be persuaded that the root is damaged or is of lower grade. They do not realize the long chain of buyers and sellers from the home place to the West Coast volume exporter. Why should the grower be at the mercy of buyers, some of whom are unscrupulous, and will cheat the grower by degrading the quality of the product? Individuals are truly vulnerable if sales are on a one-by-one basis.

A preliminary grading operation can occur with each grower doing what tobacco growers would do when the stalk of burley tobacco was stripped in the autumn after drying in the barn. These farming folk would sort the tobacco into Flynns, trash, lugs, bright, red and green or tips. These "grades" would be then tied into hands and put on sticks and pressed and then taken to market and placed on baskets for sale. Today this grading does not occur but the tobacco is stripped and baled. However, the practices of the past show that preliminary grading could be done by the grower who would through experience know the quality of product being sold. Syl Yunker has developed a model preliminary grading system for ginseng, which is available to growers for approximating their product's worth.

Positive steps are being taken to protect ginseng crops:

Marketing Cards

      State regulations exist on ginseng marketing procedures. Current federal regulations on ginseng restrict the export of less than five year old ginseng roots. Still, for the most part, growers are pretty much on their own. Ginseng growers could well afford to learn a lesson from the tobacco wars of a century ago. Tobacco growers were at the mercy of the unregulated marketing system. Some were on the inside of restricted markets and some on the outside. Recrimination brought about burnings of barns and warehouses and injury and even death to neighbors and adversaries. This vigilante rule was extremely disruptive of families and neighborhoods as this Newsletter editor remembers, from tales his father told of his own youth. Though there is not enough ginseng growing to perhaps precipitate such warfare we do already hear of cases of one person settling scores with others over poaching and marketing practices.

Ginseng Versus Tobacco. Ginseng has some similarities to tobacco. First it is an "intensive" crop that can bring very high prices per pound and per amount of land harvested (up to $400 or more per pound for wild ginseng). Secondly, like tobacco, it does not deteriorate rapidly with time and is not perishable as such; it can be properly stored for a relatively indefinite future sale and use without noticeable deterioration of quality. Unfortunately, a good tobacco marketing system was superimposed on an unhealthy product -- and the existence of small tobacco farmers in the 21st century show that the system worked to some degree. However, tobacco primarily needed the guarantee of a market for their product as well as a fair price; thus the emphasis was on a just distribution of acre or poundage controls according to farm size and cultivation history.

Ginseng differences. Virtually wild ginseng takes far longer to grow than an annual tobacco crop (about nine to ten years for the first matured root). It is far more healthy and no known deaths have ever been recorded for ginseng ingestion. The price is two hundred times higher per pound and so it takes far less bulk to transport a crop of ginseng than that of tobacco. A marketing card for ginseng growers/buyers has to do with fair prices from buyer to the grower and for verification of ownership, not on limiting production. The ultimate market is established and virtually unlimited; the price is and will remain high and climbing by all estimates; and there is no need to expand or contract growing due to this potentially immense foreign and growing domestic demand.

Virtually wild ginseng could be as big an American crop as tobacco -- some estimating sales of at least three billion dollars to China alone in ten to twenty years. It could, in fact, far out-distance tobacco in the 21st century, provided poaching can be halted and growers protected in marketing their product.

Government Regulations Scheme

       Good governmental regulations are a key to the health of this budding industry. Without these regulations it will be virtually impossible to improve the lot of the growers. Many risk the possibility that they will nurture a crop for ten years and then see it stolen in a weekend when the growers are away. Don't let Libertarians dissuade us; governmental regulation can be good and is necessary for American virtually wild ginseng growers. It stops the poacher, who must prove that he or she grew the ginseng (through a marketing card), and it stops the unscrupulous marketer, who could be prevented from purchasing ginseng from any source.

Method.  Under a regulated system a carded grower sells to a carded marketer. We can start at the state level but cannot end there for ginseng is a major Kentucky or central Appalachian crop, and state regulations cannot cope with people carrying their ginseng across state boundaries and selling to unscrupulous buyers in a bordering state. The Interstate Commerce Clause is in the Constitution and Federal regulation will ultimately be required. Prior to a Federal regulation a consortium of states could serve the purpose because this is essentially a regional crop.

Verification. Virtually wild ginseng is an "organic" product, and it is free of commercial pesticides that are heavily used in cultivated ginseng production. Some pesticides are generally used in "woods grown" and "wild simulated" ginseng, which is cultivated slightly disturbed plots under natural canopy. The dense growing conditions of cultivated ginseng encourage the devastating effect of predators, and in many cases the use of pesticides is quite pronounced. Remember that most states already have organic farming verification and inspection procedures for vegetable, fruit and herbs, and ginseng fits within those inspection guidelines. These are now in place and can be utilized. Use of photography and other techniques may be required for verifying scattered ginseng areas. There is a place for legitimate wild crafters who would have to show the amounts taken each year and the places from which they were removed -- with permissions from land holders. Some would not be able to do so and thus are unknowingly poachers.

Enforcement. Over and over the complaints are heard that a ginseng crop can be wiped out and yet the poacher gets off without a whimper. The local and state, as well as Federal, enforcement would have to be beefed up. The loss of ginseng as a livelihood must be regarded as having the same impact as stealing money from a bank or other such offense. The commons concept of ginseng permeates the culture in ginseng-growing areas, and for that reason little effort is made to prosecute offenders. Though lack of enforcement is a persistent problem in rural America, it will partially be remedied by the card system, because the poacher would have to verify where the ginseng root came from in the first place. Only in unlikely cases where a poacher would team up with a legitimate grower who prefers not to dig in a certain year would the local enforcement become more crucial.

Grading & Marketing System. Just as government tobacco graders go from basket to basket assigning a grade to the crop, so the same should be done for ginseng at the first stage in the marketing process. Perhaps the tobacco marketing system now in place could be extended to wild and all types of ginseng. The warehouses for storage need not be as vast but, with so many being converted into other uses, one could expect that the surviving ones could find an additional source of income entering the ginseng marketing business. For sales of ginseng in non-tobacco regions of Appalachian and nearby states, other marketing space would be required. Private enterprise would be motivated to find space with ease.

Grower/Marketing Cooperative. State governments could plunge into the work of helping set up grower/marketer cooperatives and could perhaps do this better than the Federal Government. Smaller units could work but have disadvantages. The difficulty is the limited size of county-wide cooperatives, for many growers would not want the publicity at the county level. The ones who do would not form a critical mass necessary for transforming local markets and impacting sales, especially at the international level. The growers/marketers cooperative will serve an educational function of encouraging growers to come out of the woodwork and feel comfortable with proper safeguards through the marketing card system. The second cooperative reason is to realize that there is strength in collective sales. The cooperative could evolve into a sales agent; it could approach foreign and especially Asian shippers based on the size of the shipment. Remember we are talking in terms of tens or hundreds of pounds and today the product can be profitably shipped by air freight to the Asian market. The very high price and relative light weight of the ginseng makes air freight possible and direct commerce between air hubs in Louisville (a major freight hub) and Cincinnati (a major passenger hub) could be utilized for transporting the product directly to the lucrative Chinese market. The cooperative would bypass the long chain of exporting sellers. Why first ship ginseng to the West Coast except that it is the way it has always been done? Once federal regulations on marketing are in place the door is open for direct business with the overseas markets.

Ginseng Marketing Flow Chart

1. Five or seven sites in the state which are the only locations where the state will certify age. These Sites will only accept product with marketing card.
2. Grower/digger applies for market membership, pays fee, is issued a marketing card after growing site inspection by an approved inspector.
3. Auction is conducted once per site in November, December, and January. A single team consisting of state age certifying and grading personnel would travel around to each marketing site.
4. Grower/digger may reject auction price in order to auction at a later date.

Grower/Digger       Checked for age           Graded for Value             Auction
product   ------->>  State/Federal _________________________________________________________    
market <<---------   Underage                  Graders are Private,       Open to all buyers
                                                                      State or Federal