Ontario’s ginseng growers are getting support from the province through the creation of an industry-led pilot loan guarantee program that will help with cash flow and storage of ginseng until market conditions improve.
The Ginseng Storage Loan Guarantee Pilot Program will enable participating farmers to borrow up to $1 million against the value of their stored crops with the provincial government guaranteeing up to 25 per cent of any loan portion that cannot be repaid. The announcement was made by Lisa Thompson, Minister of Agriculture, Food, and Rural Affairs at Keresturi Farms in Scotland, Ont. March 11.
“Today is a good day for ginseng growers,” Glen Gilvesy, chair of the Ontario Ginseng Growers Association (OGGA), said at the program announcement. He said the loan program will give growers access to capital and the confidence to keep growing.
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Ginseng is unique from other crops grown in the province because it has a four to five year growing cycle and more than 95 per cent of what’s grown is exported to Asian countries, primarily China. Ginseng isn’t simply shipped to these countries; buyers prefer to come to the farms to taste and see the product first-hand.
Buyers like to see, taste and touch the ginseng, OGGA Executive Director Rebecca Coates told Farmtario. Purchases are made with customers in mind. “Some customers may want to purchase it in order to slice it, some may want to grind it into a powder, or some may want it as a whole root,” she said. The aroma and taste of the ginseng is very distinct to growing conditions and “buyers can tell whether it’s the right quality for them. It’s kind of like terroir with wine.”
Ontario is the largest producer of ginseng in North America and the north shore areas of Lake Erie are ideal for producing ginseng that is favoured by the Asian market. Ginseng “doesn’t like getting its feet wet,” said Coates, and the well-drained, sandy loam soils of Norfolk, Haldimand, Brant and Oxford counties are ideal for growing the crop.
Ontario ginseng growers have been under financial pressure for the past few years as the COVID-19 pandemic and trade disputes between Canada and China have created market conditions for ginseng prices that are well below the cost of production, said Gilvesy.
The loan guarantee program addresses many urgent issues growers are facing, said Gilvesy. “We have growers with huge inventories because of low prices, and concerned that they will be unable to make payments as they don’t want to sell in a severely depressed market.”
Gilvesy said although Agristability helped growers keep going, confidence in growing this season was waning and more financial help was necessary. Until the creation of the loan guarantee program, he said no financial tool was available or existed for ginseng growers to help cover their operational costs and sustain their businesses until more favourable market conditions return.
Thompson said at the announcement the sector has seen its cash receipts decrease from $271 million in 2015 to $131.9 million in 2020.
The program will launch April 1 and will be delivered and financed by the Agricultural Credit Corporation.
