Skip to main content

Mickey Hare has grown ginseng for more than 30 years, and his knowledge of the finicky crop has helped him land custom work from other operators who don't have as much experience.

It has also led to a clear-eyed analysis of the current market.

"The problem is we grow too much," says Mr. Hare, who first planted ginseng on his southern Ontario farm in 1969. "Probably twice as much as we should."

Like other Canadian ginseng growers, Mr. Hare is experiencing the painful downside of growing a plant known for its healing properties. A crop that he sold for $85 a pound in the mid-eighties now fetches about $15. Sometimes, it's difficult to sell at all -- he still has some of last year's harvest in storage.

A slump in ginseng prices is hitting small growers in Ontario and British Columbia, the two provinces where Canada's ginseng production is concentrated. It is also hammering large growers that went public when the crop's future seemed assured.

Shares of Langley-based Chai-Na-Ta Corp., listed on the Toronto Stock Exchange since 1989, were trading in the $14 range in 1996. On Friday, the stock closed at 51 cents.

Vancouver-based Imperial Ginseng Products Ltd., public since 1994, was trading in the $12 range five years ago and closed Friday at 30 cents on the Canadian Venture Exchange.

Both companies are predicting improved ginseng prices in coming months, as some growers leave the business and others cut back on how much seed they put in the ground.

But like the crop itself, the hoped-for turnaround has been slow in coming and remains unpredictable.

Canadian producers grow North American ginseng, a plant that grows wild in some parts of eastern Canada and the United States and that has been exported from Canada since the 1700s.

The plant is harvested for its root, which is said to have beneficial properties ranging from its ability to reduce blood pressure to boosting the immune system. Agriculture Canada says about 68 per cent of all Canadian ginseng is exported, with most sold in bulk dry root form to Hong Kong buyers.

In Canada, commercial cultivation of the plant, which is grown in shade and is typically harvested in its fourth year, took off in the 1980s, driven by factors that included soaring prices for ginseng root among Asian buyers and the collapsing market for other crops, particularly tobacco.

In 1982, fewer than 25 metric tonnes of ginseng were grown in Canada. By 1999, that had soared to about 2,200 metric tonnes, making Canada the third-largest ginseng producer in the world, after China and Korea.

Lured by the promise of high prices, growers rushed to put more seed in the ground. Acres under cultivation, a few hundred in the early eighties, jumped to a total that Agriculture Canada says is now likely close to 8,600.

"When prices were at $40 or $50 or even $70 a pound, you didn't need a calculator to see there was an alternative there," says Ken Spriet, president of the Ginseng Growers Association of Canada, which represents Ontario growers. "It looked like a no-brainer, but it was only a no-brainer if you were looking at the volume at that time."

The lengthy growing cycle of ginseng meant that much of the new crop was coming on to the market just as an Asian economic crisis hit in 1998.

Prices have been soft since, pushing many growers out of the market. Allan Smith, president of the Associated Ginseng Growers of B.C., says his group has 60 members now, compared with about 120 in the mid-nineties.

Canadian growers produce North American ginseng, which is related to the Korean strain of the plant. Both contain compounds called ginsenosides, and the two are believed to be complementary, with the North American root said to have a cooling "yin" effect that relieves stress and strengthens internal organs, and the Asian variety to possess a heating "yang" effect.

Mr. Spriet says members of his association are counting on improved prices as some growers get out of the market.

Report an error

Editorial code of conduct

Tickers mentioned in this story