Frey, Greg, James Chamberlain, and Jeff Prestemon. Forest Service, Southern Research Station,
Forest Inventory & Analysis, Blacksburg, VA.

(Presented at The Future of Ginseng and Forest Botanicals Symposium, July 12-14, 2017, Morgantown, WV)

Abstract

American ginseng (Panax quinquefolius) root is highly valued as traditional medicine in Asia. High harvest levels for the export market led to concerns about the long-term sustainability of the plant which resulted in many states and the federal government implementing harvest regulations. Such regulations have the potential to affect income generation in rural communities in Appalachia and the Ohio valley. Using harvest data from the US Fish and Wildlife Service and price data, we estimated wild ginseng root economic supply and demand models that identify how quantity supplied responds to price, how economic crises affect harvests, and how regulations affect quantities supplied. We found evidence that quantities supplied are related negatively to price over a portion of the long-run supply curve, indicating that increasing harvest pressure in the short-run may be reducing inventories and reducing production possibilities in the long run. This finding is similar to open access resources such as fisheries in international waters. We uncovered limited evidence that increases in local unemployment rates increased harvest. Further, our analysis reveals that federal regulation banning exports of roots from plants under 5 years old has led to a shift in the long-run supply curve. This result could be due to the slow natural rate of population recovery from harvesting. We discuss implications of the shape of the supply curve for conservation and regulation.