The American ginseng is a plant of great value. Tens of thousands of pounds are harvested from the wild each year. But recently, the average harvest amount has dwindled while price has skyrocketed.
Supply curves show how price and quantity are related. Typically, as price increases, producers supply more. “A very narrow set of conditions allow a resource to operate with a backward-bending supply curve,” adds Frey. “It’s not very common.” Frey and his colleagues are the first to show that non-timber forest products can have backward-bending supply curves.
Backward-bending supply curves were identified in the 1950s, in the context of marine fisheries. Ginseng has several things in common with marine fisheries. For instance, 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 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.”
Additionally, ginseng faces biological limits on reproduction as plants must be at least five years old before they begin to reproduce. Also harvest pressure is intense.
Indiana, Kentucky, North Carolina, Tennessee, and West Virginia are the top producers of wild-harvested American ginseng. They account for about 70 percent of the total harvest. Between 2000 and 2007, harvesters made $22 to $43 million annually from the sale of wild-harvested ginseng root.
“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 James Chamberlain, Research Forest Products Technologist at the Forest Service’s Southern Research Station. Harvest rates tend to rise and fall with the national unemployment rate, as Chamberlain and his colleagues research has shown.
Regulations aim to protect wild American ginseng. Exports are regulated under Appendix II of CITES, the Convention on International Trade of Endangered Species of Wild Fauna and Flora.
Several states do not allow wild ginseng export. 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 plants are too young to reproduce.