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Ethical dilemmas in the harvesting and sale of ginseng

 Growing up in the Midwest, I'd never hear of ginseng--and If I had, it looked too much like poison ivy to chance digging around for it. 

But for Americans growing up in Appalachia, hunting for wild ginseng can be a pastime, an obsession, or a lucrative family business. Like other agricultural products with special properties, however, it can also be an arena of deception and profit-taking. 


The major factor in determining the value of ginseng is whether it is wild (or whether it can be perceived as wild by the buyer) or whether it is cultivated. Wild ginseng grows in China, Siberia and Appalachia--and can retail for more than $1,000 per ounce.  Ginseng can also be cultivated (even in Wisconsin!)--but farmed ginseng sells for only about $9 an ounce. 


The valuable wild ginseng is more gnarly-looking and often rougher and darker in color. The most prized of these roots are shaped like the bodies of human beings as well.  Only the wild root has therapeutic and restorative properties according to Chinese medicine. It is used to treat cancer, sexual dysfunction, fatigue and other ailments. Experts hunt for specimens in the woods and identify the more valuable roots like a jeweler might price out gems.


But ginseng can be a dangerous business. "I've been looking into this for a few months," said reporter Julie DeWitt, "and what I found was that people will lie for ginseng, people cheat for ginseng, they even steal for ginseng. And, in one case I found, one man even murdered for ginseng."


Another factor complicating what type of ginseng one is getting, according to information provided by ginseng harvester, "Larry" (no last name given), is that "wild simulated ginseng" is also a category. This might be obtained "if you plant ginseng in the woods and you don't coddle it with fertilizer, and if you wait 10 years or so, then you can grow something that looks a lot like wild ginseng."


Retailers purchasing ginseng must be savvy enough at identifying wild ginseng to ethically price and sell a legitimate product. The market base for Appalachian wild ginseng is primarily practictioners of Chinese medicine in the United States, but ginseng is also used by consumers in tea and moonshine. 


Ginseng is not the only product that can vary wildly in value...and whose value is difficult to determine. Pills can be worth pennies or several hundred dollars. Metals can be worth almost nothing...or be rare and valuable. The value of bundled financial assets can also be misleading (e.g. the subprime mortgage bundles that led to the financial crisis of 2008). For auditors attesting to the value of an inventory of computer chips or precious metals, the level of knowledge about product value is a major factor.  


Who can you trust?


Source: "#818: The Problem of the Root," by Julie DeWitt and Ailsa Chang, NPR: Planet Money, January 17, 2018. 

Follow up:

  • What does "caveat emptor" mean? How does it apply to ginseng sales at the wholesale and retail level?
  • What are the consequences for investors, creditors and consumers when products whose value is difficult to determine are overvalued on the books of the owner? Think about drugs, computer chips, jewels, precious (and not-so-precious metals), derivative financial instruments, and subprime mortgages...
  • What ethical issues arise in the sale of "wild simulated ginseng"? Read the article to see how an expert retailer responds to an examination of product. Does "free enterprise" imply any responsibility on the part of the seller? Explain.