EDGAR, Wis. (WSAW) -- Amid big escalations on Monday in the trade war between the U.S. and China, Democratic Senator Tammy Baldwin toured a ginseng farm in Edgar, hearing how ginseng farmers are taking some of the biggest hits from the tariffs.
"That's a huge consequence to rural America, and certainly to Wisconsin's agricultural sector," Baldwin noted.
Six weeks away from this year's harvest, the Ginseng Board of Wisconsin's (GBW) Executive Director Jackie Fett says about half of last year's crop remains unsold. In contrast, they had sold about 90% of 2017's crops last spring, when the tariff on ginseng was still at 7.5%. Now, that number has risen to 41.5%.
Marathon County grows much of the nation's ginseng, and exports about 85% of that to China. But as the trade war continues, China's demand for ginseng is increasing with it, both in the tourists who buy it in China as well as manufacturers who use it in other products, GBW members said.
Ginseng farmer and GBW president Robert Kaldinski says that while markets for ginseng have always been difficult, this is the first time that the issue has been out of their control.
"It's not a fight we picked, you know?" he said.
Expanding markets beyond China is a focal point for the industry right now, Fett explained. "We're looking at India as a market...we're also looking at Australia and New Zealand as a potential market."
But developing new markets is extensive and costly work. "That's very challenging," Fett noted, "and an extreme amount of investment to even, you know, get there."
With last year's surplus sitting unsold and tariffs on the product increasing, that money just isn't coming in. Ginseng farmers are getting $2.85 a pound for ginseng in the second round of market facilitation program (MFP) funding, but Kaldinski says the reality is that they're losing about $15 a pound from the tariffs.
"That's pretty devastating to the industry," Kaldinski said.
Baldwin said she had a conversation with the United States Department of Agriculture secretary Sonny Perdue when the second round of payments was in planning, and discussed specialty crops like ginseng.
"It didn't strike me that they were looking at being as creative as we can on how to lessen the harmful impact on these hardworking farmers," Baldwin said.
When asked for comment, Republican senator Ron Johnson's press secretary sent us this quote from an interview Johnson held in March.
“I realize what the administration is trying to do is reset the trading system around the world. We've been taken advantage of. China is the primary abuser: not following the rules, stealing our intellectual property from various means, including cyber theft and industrial espionage, so we’ve had to focus on them. … We have to conclude these deals to really bring certainty and stability to the American economy and to the markets.”
Johnson is also actively pushing the ratification in Congress of the new USMC trade deal to replace the North America Free Trade Agreement, holding multiple roundtables and calls with Wisconsin farmers about the agreement in recent weeks.