6년근 인삼재배의 출하신축성 가치 추정

Estimation of Marketing Flexibility Value in Raw Ginseng Production with 6 Years

Production contract between red ginseng processors and farmers has been increasing with the liberalization of processing, marketing, and sales for red ginseng products since 1996. Farmer with ginseng production contract with 6 years has a right not obligation to market raw ginseng under his/her control before the contract is expired. This study estimates the marketing flexibility value in raw ginseng production with 6 years in Korea to help farmers decision-making using a real options approach. The result shows that the marketing flexibility value of raw ginseng production with 6 years amounts to 20.4%~8.4% of the expected value of raw ginseng product with 6 years according to the rate of contract breach. Sensitivity analysis shows that the value is sensitive to exercise price and price variation while relatively not sensitive to discount rate. This result implies that the flexibility value is not trivial and needs to be added in profitability analysis of ginseng production. In addition, red ginseng processors may consider this value in ginseng production contract as a part of contract price or penalty for the contract breach.