[Letters] Crisis and opportunity for Korea’s ginseng industry

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[Letters] Crisis and opportunity for Korea’s ginseng industry

Korean ginseng has huge competitive edge at home and abroad. The size of the domestic ginseng market is over 3 trillion won ($2.79 billion) as of 2011. The export of ginseng and ginseng products in 2011 was $189 million, the highest ever. However, the ginseng production peaked in 2099 and has decreased to 26,737 tons in 2011. The declining trend is likely to continue for a while, as the size of new ginseng farming fields is gradually decreasing.

Last year, $189 million worth of ginseng was exported abroad, the highest exported in history. Existing major importers such as Hong Kong, China, Taiwan and Japan continue to buy ginseng, and new markets have been opened up in Vietnam. In 2011, China became the largest Korean ginseng importer.

The discussion of the free trade agreement between Korea and China will be a great opportunity. Recently, China classified farmed ginseng root less than 5 years old as new food product in the Act of Food Safety and the regulation on new food product management. It means the market becomes much more approachable.

The Korean ginseng industry is faced with both challenges and crises. The ginseng market is growing, while farmland is shrinking. Therefore, the sustainable ginseng industry needs to be nurtured, with more supports for the producers. Producer groups, such as the Agricultural Cooperatives, need to expand the production, processing and distribution businesses to enhance competitive edge and enhance the reputation and dependability of Korean ginseng.

First of all, production bases for safe and environmentally-friendly ginseng farming should be prepared. The producers’ groups need to systematically manage the farming, processing and distribution processes to confirm food safety and enhance quality control. The Korea ginseng should be distinguished from Chinese ginseng. Moreover, there has to be a system to verify information related to the production, processing, distribution and consumption of the ginseng products in order to clear any uncertainty on the part of consumers over the safety of the food product.

by Seong Myeong-hwan Researcher at the Korea Rural Economic Institute
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