Open AccessEconomic Analysis of Ginseng Based Forest Farming: a Sustainable Income Diversification Opportunity for Forest Landowners
Author(s) -
Prabodh Illukpitiya,
Avis Ortiz,
Fisseha Tegegne
Publication year - 2022
Publication title -
sustainable agriculture research
Language(s) - English
Resource type - Journals
eISSN - 1927-0518
pISSN - 1927-050X
DOI - 10.5539/sar.v11n1p25
Subject(s) - ginseng , diversification (marketing strategy) , profitability index , production (economics) , agriculture , business , forest product , agroforestry , yield (engineering) , agricultural economics , economics , natural resource economics , forest management , agricultural science , environmental science , marketing , geography , microeconomics , finance , medicine , materials science , alternative medicine , archaeology , pathology , metallurgy
While American ginseng is a complicated opportunity for forest farmers to understand, within these production systems there are many opportunities and constraints linked to production of ginseng. There are different market demands and prices paid for the various grades of dried roots depending on the system used to cultivate the plant. This study reviewed the unique benefits of producing ginseng, opportunities for forest farmers, the potential profits, as well as financial risks. The study focused on two common ginseng production systems in the southeastern region of the U.S. The specific objective of the paper is to assess economic returns of producing ginseng under different production systems. The Monte Carlo simulation was performed to analyze the profitability and risks associated with producing ginseng and performed sensitive analysis to determine the effect of uncertainty variables such as production costs, yield, and price of product on economic feasibility.