to Wisconsin over next
five years
Jan Shepel
Associate Editor
MADISON
A new trading contract with a Chinese company is expected to open doors for Wisconsin ginseng growers and put one of the state’s premier specialty crops back on solid ground.
An official signing ceremony was held last week in the state capital linking the Wisconsin Ginseng Board and Tong Ren Tang of Beijing for use of the official trademark of Wisconsin ginseng. The Chinese company also signed an agreement with Ginseng and Herb Co-op headquartered in Marathon for purchase of state-grown ginseng.
Butch Weege, who grew ginseng for 25 years, is now the executive director of the Wisconsin Ginseng Board and explained that Wisconsin growers of ginseng have never been able to market their crop directly to mainland China – the traditional market for the crop.
For decades, he said, the crop has gotten as far as Hong Kong and from there dealers have found ways to get it into China. But that link in the marketing chain has caused problems in recent decades.
While Chinese consumers have long considered Wisconsin’s ginseng the best in the world, that reputation has been diluted by a lack of trademark enforcement in China up until recently. Weege explained that dealers would take ginseng grown anywhere – even inferior product – and slap the Wisconsin mark on it and pass it along to their buyers.
The Wisconsin Ginseng Board had developed the Wisconsin Ginseng Seal trademark in 1991 to protect the integrity of state-grown ginseng products. But enforcement across the Pacific had been lax.
In the last few years, as Chinese officials have begun to crack down and prosecute those who abuse trademarks, Wisconsin’s ginseng board has been looking for a way to upgrade the status of its product in the Chinese market.
“We’ve attempted for some time to find a company interested in this,” said Weege, in an interview with Wisconsin State Farmer. “Now we have found a traditional Chinese medicine company interested in Wisconsin product and the Wisconsin trademark.”
Tong Ren Tang, which has now begun a five-year deal to be the exclusive distributor of Wisconsin ginseng in China, is what Weege called a higher-end company. Their 1,000 stores in China are “classy” and trimmed with mahogany woodwork and lush trappings, he said.
Customers can come in and get a reading on what traditional Chinese medicine treatments they may need and then can purchase them right there. Best of all, from Weege’s perspective, the company is planning to build 1,000 more stores.
With this agreement in place, Tong Ren Tang will label the Wisconsin ginseng as such and growers here will certify a paper trail from the farm to the distributor.
“This will give us a consumer relationship with a good, reputable company and give us the momentum and the relaunch we need,” Weege said.
State trade officials, who helped forge the agreement, said it is worth an estimated $12 million over the next five years. Because of its climate and soil type and the experience of its producers, Wisconsin grows about 95 percent of the total U.S. ginseng crop.
Ginseng, a plant that grows in the wild in shady woodlands, has been cultivated as a crop in Wisconsin since the late 1800s. Growers learned how to simulate the shade of the forest with wooden laths and later with plastic sheathing over fence posts placed in rows in the ginseng beds.
The reputation of Wisconsin’s ginseng grew throughout the 1960s and ’70s, Weege said, and cultivating ginseng became lucrative into the 1980s. “A lot of people got into it and thought they could make a lot of money,” he said.
By the early 1990s there were 1,400 growers. But the high prices and growing production brought an inevitable crash. Canada ratcheted up its production base, touting ginseng as an alternative crop for former tobacco farmers, Weege said, and soon blew past Wisconsin’s production.
At the peak Wisconsin growers produced 2.4 million pounds of ginseng a year. Soon Canada was growing more than 5 million pounds, he said. The supply and demand picture caused the ginseng market to “hit the skids,” he said.
Many growers exited the business as they were forced to sell their product for below the cost of production for up to 10 years. Today there are about 150 ginseng growers in Wisconsin, according to Weege.
But the picture started to improve in 2004, he said, as stories about Wisconsin ginseng appeared in the Wall Street Journal and Forbes magazine. That was also the year Governor Doyle went on a trade mission to China and some bridges started to be built.
Within a year of that visit the Chinese government began cracking down on dealers using false trademarks. “Product was confiscated. Fines were levied. There was the impression that those who owned the Wisconsin mark weren’t going to roll over and play dead,” Weege said.
The new contract with Tong Ren Tang is a first for the Wisconsin ginseng industry. “We’ve never had a direct line into China before and we needed a company with this reputation to make it possible,” he said. “I think this is going to be a good time to do this as there is a growing consumer ability there to spend money.”
Marketing isn’t the only challenge faced by ginseng growers. Ginseng seed can take 18 months to germinate and it may be three years after that when the first marketable roots can be dug for sale. It is a labor intensive crop to grow and to top it off, land can only support the crop once.
Weege said he grew ginseng until he ran out of land on his farm. Others in that position choose to lease land to crop further, but he chose to serve the industry as executive director of the ginseng board.
The board handles the checkoff dollars generated by ginseng sales and supports research, marketing and development. But it isn’t allowed to sell any product. That’s where the Ginseng and Herb Co-op comes in. That entity handles sales for producers.
Weege said this trading agreement is the latest step in the revival of the industry that had begun in 2002. At that time the board again began working with plant pathologists at Michigan State University to find ways to keep the crops healthier.
The board has also supported medical research in the United States, notably with the Mayo Clinic and Johns Hopkins. Mayo researchers studied ginseng as a way to offset fatigue associated with cancer patients’ treatments.
Weege said a pilot study there had favorable results and Mayo is expanding the study to 400 patients for a broad national study. Similarly, Johns Hopkins researchers are looking at ginseng to relieve fatigue in HIV patients.
In the U.S. studies, ginseng is taken in capsule form, but in China people prefer to take it in whole slices off the root, like a carrot, he said. They may also make it into a tea.
Until this new trading contract, the marketing of ginseng has been conducted like perhaps no other agricultural commodity. “There’s no other commodity where buyers come to your door,” Weege said.
Farmers have been at the mercy of Asian buyers who arrived in the fall. Marathon City – the heart of ginseng country in north-central Wisconsin – would become a small Chinatown each fall as buyers arrived to make their deals. “I don’t think all the dealers who came here were looking to do what was best for the growers,” he added.
As Canada’s production boomed, the buyers flocked there.
During the peak years, 95 percent of the Wisconsin crop ended up in China. Today it’s only 85 percent as there is becoming more domestic interest in herbal, traditional and complementary medicine – as the Mayo and Johns Hopkins studies show.
“We’re hoping we’re on the right path and that several of the things we’re doing now will put the industry on good footing.”
