American ginseng (Panax quinquefolius) is a plant of great value. Tens of thousands of pounds are harvested from the wild each year. But the average harvest amount has dwindled, while price has skyrocketed.
“It’s pretty unusual that the more effort put towards producing something, the less is produced,” says USDA Forest Service researcher Greg Frey. “It indicates a backward-bending supply curve.”
Supply curves show how price and quantity are related. Typically, as the price of a product increases, producers supply a larger quantity for sale. This relationship is so common that economists call it the Law of Supply. But wild ginseng has appeared to violate that law in recent years.
Backward-bending supply curves were identified in the 1950s, in the context of marine fisheries. Ginseng has several things in common with marine fisheries:
- Restricting access is difficult. Functionally, ginseng is an open-access resource, even though it is not open-access in the legal sense.
- The harvest is rivalrous – once a wild ginseng plant is harvested, it is gone. “It’s not like hiking, for example,” says Frey. “If I take a hike, you can still hike, too.”
- Ginseng plants face biological limits on reproduction. Plants must be at least five years old before they begin to reproduce. (Most commercial marine fish species reach reproductive maturity in less than two years and can produce large quantities of eggs each year).
- Harvest pressure is intense.
“It’s a very narrow set of conditions that allow a resource to operate with a backward-bending supply curve,” says Frey. “It’s not a very common outcome in economic studies.”
Frey led a recent study published in the journal Forest Policy and Economics. The research is the first to show that a non-timber forest product can have a backward-bending supply curve.
The analysis was quite complicated, partly because the scientists controlled for changes in demand. They used harvest data from the U.S. Fish and Wildlife Service for 1978 to 2013. Price data came from other published sources.
Between 2000 and 2007, harvesters made an estimated $22 to $43 million each year from the sale of wild-harvested ginseng root.
Counties with more poverty and unemployment had much higher harvest rates. Counties with more roads and more ginseng habitat also had higher harvest rates, as James Chamberlain, SRS research forest products technologist, showed in a separate paper on ginseng harvests. That study was led by John Paul Schmidt, a researcher at the Odum School of Ecology at the University of Georgia and published in the journal Biological Conservation.
“Ginseng and other non-timber forest products may provide an economic safety net in Appalachia and other rural areas of the eastern U.S.,” says Chamberlain, who also contributed to the economic study, along with SRS project leader Jeffrey Prestemon.
Indiana, Kentucky, North Carolina, Tennessee, and West Virginia are the top five producers of wild-harvested American ginseng. Together, they account for about 70 percent of the total harvest.
Wild American ginseng roots fetch 10 to 25 times more money per pound than ginseng grown in fields, under shade cloths. A dry pound of wild-harvested roots can sell for hundreds of dollars. However, about 90 percent of ginseng that’s exported is farmed.
A suite of regulations aim to protect wild American ginseng populations. Ginseng exports are regulated under Appendix II of CITES, the Convention on International Trade of Endangered Species of Wild Fauna and Flora. Several U.S. states do not allow its export at all. And harvest levels have been regulated since the 1970s. Since 1999, there has been a federal ban on exporting roots younger than five years old, when the ginseng plants are not yet capable of reproduction.
Like other long-lived forest herbs such as goldenseal, bloodroot, and black cohosh, ginseng is valued for its roots, which are used medicinally.
“Species valued for their roots appear particularly vulnerable to harvest impacts,” says Chamberlain, who contributed to a different six-year harvest study on black cohosh, which is also harvested for its roots. That study was led by Christine Small, a professor at Radford University, and published in the Journal of the Torrey Botanical Society.
After three years of moderate harvests, black cohosh declined drastically in the field study sites. In moderately harvested plots, black cohosh leaf area and stem density were 65 to 80 percent lower than in unharvested control plots. “The differences persisted for at least two years after harvest treatments ended,” says Chamberlain. “Model projections suggested declines, rather than recovery.”
Black cohosh is still relatively abundant, unlike American ginseng. But like ginseng, it faces biological constraints on reproduction, de facto open-access, and rivalrous harvests.
Non-timber forest products have immense value – they provide food and medicine, as Chamberlain says. But their role in the economy is often unclear, and sustainable harvest levels are often unknown.
“Our economic model doesn’t say whether or not we are on a path to sustainability,” says Frey. “But it does show the economic conditions that make it possible for American ginseng to become, or be, endangered in the wild. The loss of ginseng is not inevitable, but management is very challenging, and there’s no silver bullet. But there are things that, with stakeholder input and collaboration, could be tried.”