The renowned healing powers of ginseng may not be enough to save small farms and businesses in British Columbia currently producing the popular herb.

A large-scale ginseng industry is thriving in Canada, but small players need innovation and creative thinking to survive in today’s competitive market, industry insiders say.

“There are very few small farms left,” says Judy Alsager, co-owner of Cariboo Ginseng, a small farm about 65 kilometres outside of Williams Lake, B.C. “Most of them have been squeezed out by the big guys.”

Alsager’s farm cultivates just under two acres of ginseng. Compare that with 900 acres on 16 B.C. farms currently under cultivation by big ginseng powerhouse Chai-Na-Ta, headquartered in Richmond.

Photos courtesy of Al Oliver
Tarps give ginseng plants the shade they need from the sun at a farm at Monte Creek, B.C.

“Chai-Na-Ta bought up or tied up a lot of the land along the Thompson River,” says Alsager, noting that the region is prime ginseng-growing territory. “We’ve had to look elsewhere.”

Chai-Na-Ta is the industry leader, with farms in Ontario and British Columbia. Even with recent setbacks, including damage from frost and poor soil conditions, the company still managed a 38-per-cent gross profit margin in fiscal 2003, says the company’s chief financial officer, Wilman Wong.

Ginseng has been in popular use in Asia for more than 3,000 years and, in holistic circles, has been credited with a broad range of medicinal benefits from reducing stress to increasing endurance. Some studies claim that when taken regularly, ginseng will increase physical stamina, quiet the nerves, enhance blood flow and increase longevity.

In B.C., much of the province’s crop is grown in the Okanagan and Thompson River regions.



North American ginseng is a native Canadian plant that was once found growing primarily in the hardwood forests on the eastern side of the continent.

Wild ginseng was used in the traditional medicine of many First Nations, and according to Agriculture Canada, its trade once rivaled the fur trade in this country. But it wasn’t long before wild ginseng became difficult to find, and farmers began to cultivate the plant on a small scale beginning in the 19th century.

However, it was not until 1982 that the first ginseng plants were grown for mass production in B.C.

But challenges – both natural and economic – remain for farmers in this province. Ginseng has a four-year growth cycle to produce roots mature enough for sale.

It is planted from seed and requires more than 70-per-cent shade to grow. In the wild, it is found only in heavily treed areas, and commercial producers need to use wooden slats or tarps to cover the crop.

Much of the process is labour-intensive, and weeding is usually done manually. While the roots are dug up by machine, they are left on the ground to be harvested by the farmer.

Some smaller-scale farmers such as Alsager have responded to the larger competition and the drop in prices by specializing. Along with partner Ron Koop, Alsager has embraced organic production methods and is now one of the few producers of organic ginseng in the province.

“It’s a lot of work and much of it is done by hand,” says Alsager. “Since it takes four years to grow ginseng, every year we take the four-year-old root crop off and replant again.”

Organic ginseng sells for about $50 a pound, about double the rate of non-organic produce and is subject to regular inspection by the Pacific Agricultural Certification Society (PACS) in order to be certified organic.

Complicating this already lengthy process for the small producer is the price of ginseng.

Production of ginseng is currently a $3-billion industry worldwide. But the price experienced a rapid drop in Canada a few years ago. One factor was the transfer of Hong Kong to Chinese administration in 1997.

“Things really changed when the Hong Kong market closed,” says Stan Maciaszek, of Okanagan Ginseng Products. “The Chinese closed their import market because they felt they could grow ginseng more cheaply at home. In Canada, a number of farmers quit growing ginseng at that time because their market dried up.”

The price of conventional ginseng appears to be on the rebound. According to Chi-Na-Ta’s 2003 annual report, the selling price of ginseng increased from $13 per pound in 2002 to $19 in 2003. “More than 95 per cent of our business is to China and Hong Kong,” says CFO Wong. “Only a small portion was in Canada.”

With much of the largest market in the hands of the powerhouse companies, innovative small businesses continue to look for other homes for their products.

Alsager is content with her small niche market. “We don’t export to Asia because they seem to be able to get it so cheaply there,” she says. Instead, she maintains a client base in Canada and conducts a small export business with companies in Europe. “We only export to France and Switzerland,” says Alsager. “We don’t even ship to the Americans any more because we are having so much trouble at the border.”

Part of the problem is that ginseng is often shipped as a powder – a white powder – and with B.C.’s reputation for its other most famous herbal export, there have been “misunderstandings” at the border.

U.S. protectionism and increased concerns about terrorism have also slowed, and in some cases halted, cross-border trade.

“The Food and Drug Administration (FDA) in the United States has really been hassling us,” says Alsager. “They sat on a load of our product at the border for three or four months last year and then released it without inspecting it, because there was too much of a backlog. After that length of time, the buyer was really upset.”

Alsager also cites an incident where a large order was taken from the shipping containers, rejected, and sent back in a broken cardboard box. “They said they would have to test the whole shipment of ginseng powder and they didn’t have time. It was a 65-pound shipment that was lost to us. We couldn’t salvage the product when it came back to us and we lost the customer.”

Maciaszek has taken a different route to maintain his ginseng business. The president of Okanagan Ginseng Laboratory in Kelowna, Maciaszek buys ginseng from local growers and manufactures it into a varied product line.

“The main focus of the company is on value-added products – any extract, liquid or powder that is manufactured from ginseng,” he says. The biggest business these days is ginseng aroma. It is important for the beverage industry, particularly for beverages going to the Chinese or other Oriental communities.”

In addition to the ginseng essence that is added to beverages, Maciaszek’s lab produces honey/ginseng and honey/ echinacea products destined for the holistic health market. The bulk of his marketing is done through word of mouth, though he also offers both the Okanagan Ginseng and Aqua Herbs product line via the Internet. He plans a trip to Hong Kong in the near future to build more ties to Asian markets.

“There is growing interest in generating ginseng and other flavour concentrates of the beverage industry,” says Maciaszek. “We are doing what we can to keep up with the demand.”

(Karen Dyer can be reached at karen@businesssedge.ca)