Ontario ginseng growers have an edge in a $100-million market that is poised to grow
Tuesday, November 1, 2011
It's an expensive crop to produce and the soil can only be used for it once. But, with production declining in British Columbia and Wisconsin, Ontario producers are well positioned to take advantage of ginseng's promising prospects
by MIKE MULHERN
When Doug Bradley points his GPS-guided tractor into a ginseng garden to create a seedbed, he begins a saga that will take years to play out. When it is harvested, the root could be worth even more than this year's crop thanks to favourable markets and the efforts of scientists who have already published papers in scientific journals confirming a number of health benefits, based on pre-clinical animal trials.
The ginseng root that today's seed produces will be dug in three or four years' time. It will likely be sold through a broker to a Chinese company and be processed for use in food, in herbal remedies, popular over-the-counter medication or, by then, as a proven benefit in the fight against one or more major diseases. Just as this ancient herb is gaining scientific credibility, the 140 Ontario farmers who produce ginseng are about the only commercial source in the world for the North American root.
Bradley is the president of the Ontario Ginseng Growers Association. Together, association members produce about five million pounds of ginseng a year. At the current price of $20 to $25 a pound, that's a crop worth more than $100 million and it has nowhere to go but up. One of the reasons is that two major competitors – growers in B.C. and Wisconsin – are all but out of the market. Between them, they used to produce three million pounds a year. But B.C. growers found their climate was too warm and Wisconsin growers got out because the market was flooded and prices dropped.
"It has been three or four years since B.C. root has been off the market, so that has an immediate effect on our prices," Bradley says. Wisconsin is down to about 500,000 pounds a year. That leaves the market to Ontario farmers concentrated mainly in the sandy soils that stretch from Aylmer to Simcoe, mainly on farms that once grew tobacco.
Ontario growers have about 6,000 acres of ginseng in the ground. In any given year, they harvest 1,500 to 1,800 acres, some of it three-year root and some four-year root, which is preferred.
"In a three-year garden," Bradley says, "the average is 2,500 to 3,000 pounds to the acre. In a four-year garden, it's between 4,000 and 5,000 pounds." He says root is dug after three years only if soil conditions and pest pressure require it.
"We export 92 per cent of everything we dig right to Hong Kong," Bradley says. "From there, it is dispersed to different markets." Some of it comes back to Ontario in various forms and Asian ginseng is also sold here. There is no processing capacity in Ontario.
Bradley has personal experience in the Asian market. "I've attended a food show in Taipei (the capital of Taiwan) for the last five years," he says, "and we've upped our exports to Taiwan." He says the visibility of Canadian ginseng is also very high in mainland China. "You go to Hong Kong today and Canadian ginseng is the most sought-after ginseng in the world."
One of the goals of the association is to sell directly to China. Under the current system, brokers from mainland China, Taiwan, Hong Kong and the United States deal directly with the farmer. Since the advent of the Internet, brokers have been able to speed up the process and get a commitment from the buyer in China before they make their deal here. They get a one-pound sample of the ginseng the farmer is selling, e-mail a picture to the buyer in Hong Kong and get an immediate offer. If the farmer accepts, the crop is sold. If not, another broker will come along or the broker who was refused will raise his offer.
While the returns seem high today, ginseng is costly to grow and the price has moved around quite a bit. It once sold for as high as $40 to $80 a pound and was recently as low as $10-$12 a pound before the grower pool contracted, leaving Ontario producers largely on their own.
Along with the time line for growth and cost of production, ginseng requires special soil to grow. Bradley says the poles, cable and netting to create the forest-like conditions required for ginseng to thrive cost $15,000 to $16,000 an acre. Hand weeding and tending add $10,000 a year to each acre. Then there is the cost of planting, pest control, berry harvesting for seed, root digging, cooling, drying and marketing. And, once your crop is dug, you have to look for new ground to plant your next crop because you can't plant ginseng in the same ground twice, no matter how many years intervene.
"Ginseng farmers are always looking for more land," Bradley says. "We have a farm that's 40 kilometres from us. "
Sean Westerveld, ginseng and medicinal herb specialist for the Ontario Ministry of Agriculture, Food and Rural Affairs, says a soil-borne disease called cylindrocarpon prevents replanting in the same ground. "It's pretty much everywhere," Westerveld says, "but when you grow ginseng, it seems to boost the population."
Bradley says the cost of producing ginseng has made producers wary of claims that cylindrocarpon can be controlled. Until there is a proven solution, he says, farmers will continue to grow in new fields. Other crops can be grown in fields where ginseng has been produced with no ill-effect.
The association plots where it has been grown in Ontario.
Ginseng growers are regulated under Section 12 of the Ontario Farm Products Marketing Commission. The association collects acreage fees of $75 per planted acre from its members. Association members get marketing and promotional support and they benefit from research and development and advocacy programs.
Westerveld expects the declining land base for the crop will become an issue because it can only be grown in the well-drained, coarse sands of the plains where tobacco once dominated.
Tradition and history have given ginseng status as an herbal medicine, and now a group of Ontario scientists is testing the root's capabilities in the lab.
Ed Lui is the scientific director of the Ontario Ginseng Innovation and Research Consortium (OGIRC) at the University of Western Ontario. The group – 18 principal investigators along with 30 others, mostly graduate and postdoctoral students located in five Ontario universities and at Agriculture and Agri-Food Canada – is three years into a five-year, $21-million research project. It is funded by the Ontario Ministry of Research and Innovation with matching funds from the university and industry partners, including the Ontario Ginseng Growers Association.
The researchers are conducting pre-clinical trials using animals to establish scientific evidence for some of the historic claims about the health benefits of ginseng. They are investigating how people with heart problems, diabetes and erectile dysfunction can benefit from the use of ginseng.
A paper published this year by a team of OGIRC researchers in the journal Pharmacological Research showed that North American ginseng protects the heart from injury when blood flow returns after an arterial blockage. A second paper published in the journal Phytomedicine showed that North American ginseng prevents glucose-induced oxidative stress and associated endothelial abnormalities, conditions associated with both diabetes and vascular disease contributing to heart attacks and strokes. A third paper in the Chinese Medicine Journal shows ginseng may stimulate or suppress immune function depending on how the extracts are prepared. A fourth paper, published in the journal Circulation, showed how ginseng inhibits enlarging of the heart and other adverse events associated with heart failure.
As well as investigating health benefits, scientists are looking at ways to improve the ginseng breeding program and find new value-added products to be derived from the root.
Farmers handpick third- and fourth-year berries. They remove the pulp and prepare the seed for planting the next year. Lui is trying to develop seed that will produce root with specific characteristics. Ginseng contains a number of active ingredients, including ginsenosides, sugars, amino acids, vitamins and minerals. While there are as many as 40 ginsenosides, Lui says they are concerned with just five to seven major ginsenosides. In the future, it may be possible to grow strains of North American ginseng with more of one ginsenoside than another that could be used to target specific health issues.
"Korea has a long history of growing ginseng and has developed 10 different cultivars; specific lines of ginseng. That's what we are trying to do," Lui says.
Lui and his researchers use a tissue-culture technique to transform one seed into 1,000 identical plants. "Depending on the number of seeds we use," he says, "we can generate hundreds of different lines." Once the plant is mature, they can analyze the root for medicinal properties.
Commercial ginseng production in Ontario can be traced back to Norfolk County in 1896, when ginseng was produced on a farm near Waterford.
Cold-FX, developed by Edmonton-based Afexa Life Sciences Inc., is a Canadian ginseng success story and a possible sign of things to come. Cold-FX is made with a patented extract of ginseng. It claims, backed by clinical trials, to boost immunity to stave off both cold and flu. In production since 1997 and sold only in Canada and to a limited extent in Hong Kong, Cold-FX took off in 2003 and, since then, company revenues have totalled more than $250 million.
Before Cold-FX came into the system, Canadian sales of ginseng and ginseng-related products amounted to $1 million to $3 million annually. That all changed with Cold-FX.
Last year, Afexa bought more than 700,000 pounds of ginseng roots and sold just over 165 million capsules of Cold-FX.
The company only buys North American ginseng. In fact, Afexa has developed a test that tells it not only whether the ginseng is North American, but where it was grown. BF
Ginseng facts
Types
Two species of ginseng comprise the bulk of world production and trade, Asian and North American. A third type, Siberian ginseng, is not true ginseng.
North American ginseng, Panax quinquefolius, is native to the floor of the mixed hardwood forests of Eastern North America. It requires only 20 per cent sunlight. If light intensity exceeds this level for any length of time, it will age and die. It is also grown in China from seed acquired in North America.
Asian Ginseng, Panax Ginseng, is native to North Korea and China and is grown in China and Korea.
Siberian Ginseng, Eleutherococcus senticosis, is not a true ginseng although it is related to ginseng. Siberian ginseng does not have ginsenosides in its root but is said to have chemicals that do similar things. It is native to Russia and is also grown in China and Japan.
History
In 1715 or 1716 a Jesuit missionary priest discovered North American Ginseng growing wild in Quebec and that was the start of the "root rush" in Canada. By 1717, ginseng was being exported to China. Ginseng became one of Canada's largest exports, second only to furs.
North American ginseng was used by North American natives long before the arrival of Europeans.
Ginseng Use
Ginseng comes in many forms and preparations with varying concentrations. The surest way to get the full benefit of ginseng is to buy the root.
Root slices can be brewed to make tea. Root slivers can be added to soups whole or after being ground into powder. Alternatively, you can soak the dried root in boiling water for five minutes and then chew it.
Health Claims
There is ongoing research into the health benefits derived from taking ginseng. Agriculture and Agri-Food Canada reports that recent Canadian research shows that a regular dosage of North American ginseng reduces stress and fatigue, improves short-term memory, reduces high blood pressure, regulates blood sugar level, reinforces the immune system, and increases longevity. BF