李殷昌 / E.C. Lee / SIMTEA.com
I. The Definition and Historical Status of 'Kaesong Ginseng'
A. Kaesong Ginseng, the Essence of 'Goryeo Insam'
'Kaesong Ginseng' is not merely an agricultural product; it is a proper noun that represents the history and quality of 'Goryeo Insam' (Korean Ginseng).1 As ginseng produced in the Kaesong (Songak) area, the capital of the Goryeo Dynasty, became known to the international community, including China, under the name 'Goryeo,' 'Goryeo Insam' became synonymous with the highest quality ginseng produced on the Korean Peninsula. Referred to as the 'elixir of life' and a 'miraculous herb' 2, Kaesong ginseng has functioned as a core icon symbolizing the health and culture of the Korean people for the past thousand years.
B. The Source of Quality: Unrivaled Terroir
The unrivaled quality of Kaesong ginseng stems from its cultivation environment, or terroir. Ginseng is a plant with extremely demanding growing conditions, requiring a specific latitude between 36 and 38 degrees north 3, a cool climate with an average annual temperature of 20-25°C, and gentle, north-facing slopes.4
The historical cultivation area centered around Kaesong (including the current northern Gyeonggi border areas like Paju and Yeoncheon) perfectly meets these climatic conditions.4 However, the most decisive difference lies in the soil. Unlike ginseng from other regions, which is mainly grown in Masato (weathered granite soil) 3, the soil in the Kaesong region is based on Hwangto (yellow loam) rich in organic matter.3 This unique soil condition slows the ginseng's growth but, in turn, makes its internal tissues extremely dense and firm. As a result, Kaesong ginseng has a higher content of saponin (ginsenoside), the key component for anti-cancer and immune-boosting effects, and possesses a distinct, strong aroma compared to ginseng from other regions.4
C. The Report's Core Thesis: The Separation of Terroir and Technique
This report begins with the core thesis that the single legacy of 'Kaesong Ginseng' was split into two different components by the political division resulting from the 1953 Armistice Agreement. That is, the geographical origin of 'Kaesong,' the 'Terroir,' was relegated to the north of the Military Demarcation Line (North Korea), while the cultivation 'Technique' and human capital accumulated on that land for hundreds of years were transferred south of the Military Demarcation Line (South Korea) via refugees.7
Therefore, analyzing the 'present of Kaesong Ginseng' is a comparative analysis of how North Korea, which possesses the original 'land,' and South Korea, which inherited the 'technology' of that land, are developing or transforming the same legacy under different political, economic, and environmental systems. This division is the root of all current issues surrounding 'Kaesong Ginseng'—the Geographical Indication (GI) dispute, quality debates, and production gaps.
II. Historical Review: From Goryeo Royalty to a Key Joseon Trade Good
A. Goryeo Period: The International Port 'Byeongnando' and the Birth of 'Goryeo Insam'
Kaesong (Songak), the capital of Goryeo, was geographically adjacent to the international trading port 'Byeongnando.'8 Byeongnando, at the mouth of the Yeseong River, was a center of trade visited by Song merchants and even distant Arabian merchants. In this process, ginseng from the Kaesong area naturally began to gain its first international fame under the national name 'Goryeo.'8
B. Joseon Period: A Diplomatic Asset and National Strategic Material
In the Joseon Dynasty, Kaesong ginseng emerged as a key strategic material supporting the state's diplomacy and finances. Joseon utilized ginseng as the most important item among the regular tributes sent to the Ming Dynasty.9
The history of ginseng in the Joseon period was a history of constant conflict between 'state control' and 'market economy.' The royal family attempted to manage ginseng collection (simmani, or wild ginseng collectors) and strictly control private trade by merchants to secure tribute goods.10 However, as the medical and commercial value of ginseng skyrocketed in Ming China after the 16th century, merchants paid collectors far higher prices than the government, cornering the market.10 As a result, by the 17th century, the private trade market had expanded to the point where the state struggled to secure even the volume needed for tribute, and ginseng became the highest value-added product of the late Joseon period. The fact that the state's official tribute volume decreased sharply in the 17th century compared to the 15th century suggests not that state control weakened, but that the skyrocketing commercial value of ginseng caused supplies to flow into the more profitable private market.
C. Evolution of Processing Methods: Innovation Driven by Logistical Necessity
In the early Joseon period, the ginseng sent to the Ming Dynasty was 'Baeksam' (White Ginseng). This was a method of lightly peeling the ginseng and drying it as is.9 However, this method posed serious logistical problems.
In 1577 (10th year of King Seonjo), the Ming Ministry of Rites officially complained, "The tribute ginseng from Joseon is peeled, making its authenticity difficult to verify, it easily attracts insects (insect damage), and its medicinal efficacy is lost," demanding that the ginseng not be peeled.
In response to these demands and market needs, ginseng processing methods underwent a revolutionary evolution. The driving force for this innovation was not primarily to increase medicinal effects, but rather the 'Logistical Necessity' to prevent product deterioration and damage during the long journey from Uiju to Yeongyeong (Beijing).11
Chosam (草蔘) (1602): Accepting Ming's request, they switched to an 'unpeeled raw ginseng' form. This reduced Joseon's processing burden but failed to solve the fundamental problem of spoilage during transport.
Pasam (把蔘) / Hongsam (紅蔘) (Red Ginseng) (After 1603): Around 1603, demand for steamed and dried ginseng (Pasam) exploded in the Chinese market.9 The 'steaming and drying' (jeungpo, 蒸包) method 11 dramatically increased the durability of ginseng, enabling long-term storage and transport. The emergence of this 'Hongsam' processing technology not only prevented product deterioration, maximizing profitability, but also resulted in enhancing the medicinal effects of the ginseng.11
The following summarizes this evolutionary process of processing methods.
III. Kaesong Merchants (Songsang) and the Industrialization of Ginseng Distribution
A. Formation of Commercial Capital: The 'Songbang' Network
The actors who elevated Kaesong ginseng from a 'medicinal herb' to an 'industry' were not the royalty or the farmers, but the 'Kaesong Merchants (Songsang).' Due to their political origins as natives of the former Goryeo capital, land-based agricultural management was difficult for them during the Joseon Dynasty, leading them naturally to engage in commerce.
They possessed a high degree of commercial rationality, developing and using their own double-entry bookkeeping ledger, the 'Sagaesongdo Chibubeop,' two centuries ahead of the West.8 They also established a nationwide network of branches called 'Songbang' (Song-rooms), dominating the national wholesale business that managed the distribution of goods between regions.8
B. Establishment of a Ginseng Supply Chain Management (SCM) System
In the process of dominating ginseng distribution, the Kaesong merchants went beyond simple intermediary trade to build an advanced system similar to modern Supply Chain Management (SCM).11
Initially, they traveled to ginseng-producing areas like Ganggye in Pyeongan Province to purchase ginseng. However, to reduce logistics costs and make swift decisions through mass production, they gradually shifted to 'corporate-style cultivation' by activating ginseng cultivation in the 'Kaesong vicinity,' their commercial stronghold.
This formed a vertically integrated 'Cluster' linking. The Kaesong merchants clearly understood the concept of 'Logistics Cost' for ginseng. They competed fiercely with the Gyeonggang merchants of Hanyang over the location of the jeungposo (red ginseng processing plant), demonstrating their desire to maximize processing and distribution efficiency. This signifies the complete transformation of ginseng from a wild-collected item to a 'managed industrial product.'
C. International Trade and Capital Accumulation
The Kaesong merchants stood at the center of a triangular trade centered on ginseng. They exported ginseng, purchased through the Songbang network, to Japan and received 'Silver,' the international currency at the time, in return. They then used this silver to import silk and medicinal herbs from China, accumulating vast commercial capital through intermediary trade by reselling these goods in Joseon and Japan.
D. Modern Era: Nationalization of the 'Sam-eop' (Ginseng Industry) and Kaesong's Resistance
In 1898, when the Korean Empire's court (King Gojong, Lee Yong-ik) attempted to nationalize the ginseng industry to expand state finances, the people of Kaesong fiercely resisted, an event known as the 'Kaesong Civil Disturbance (Min-yo).'12
This incident clearly shows that ginseng was not just a 'commodity' for the people of Kaesong, but their 'identity' and 'right to survive.' According to historical records, they shouted, "Even without the ginseng industry, we can continue our ancestral rites," and proceeded to scatter or burn the ginseng seeds they owned.12 This was a symbolic event where the Kaesong community, which had built its economic pride and social identity through the ginseng industry for hundreds of years, directly confronted state policy.
IV. Division and the Separation of Legacy: The Diaspora of the 'Kaesong' Brand
A. The Korean War and the Severing of Legacy
The outbreak of the Korean War in 1950 and the signing of the Armistice Agreement in July 1953 became a decisive turning point in the history of Kaesong ginseng. 'Kaesong,' which originally belonged to Gyeonggi Province, was incorporated into the area north of the Military Demarcation Line (North Korea). This political event resulted in the separation of the geographical origin, 'Kaesong,' from the 'human capital (farmers)' who had cultivated ginseng there for centuries.
B. The Defection of Ginseng Farmers to the South and the Transfer of Technology
Ginseng farmers from Kaesong fled south in large numbers to escape the war.7 To make a living, they searched for new settlements, and their sole criterion was a 'terroir (climate and soil) similar to Kaesong' where they could utilize their skills.7
Ganghwa Island: Kaesong refugees discovered that the climate and soil of Ganghwa Island were "almost identical" to their hometown, Kaesong, and began cultivating ginseng there in earnest.7 This became the direct background for 'Ganghwa Ginseng' gaining nationwide fame in the 1970s.7
Gimpo, Paju, Yeoncheon: Wolgot-myeon in Gimpo was a place where ginseng cultivation techniques had already been introduced from 1923 due to its proximity to Kaesong (Gaepung-gun). After the war, areas adjacent to the Civilian Control Line (CCL), such as Paju and Yeoncheon, which belong to the same geographical and climatic belt as Kaesong, became the new center in South Korea, carrying on the legacy of 'Kaesong Ginseng' displaced from its origin.4
In other words, the current 'Kaesong Ginseng' (Paju, Yeoncheon) and 'Ganghwa Ginseng' in South Korea are the direct products of the 'Kaesong Ginseng Diaspora' that was displaced from its homeland by division. South Korea's Kaesong ginseng is based not on 'geographical origin,' but on 'technical and human legitimacy.'
V. Current Analysis (1): North Korea's 'Kaesong Koryo Insam' (The State of the Origin)
A. State-Led Management: The 'Kaesong Koryo Insam Processing Factory'
North Korea strictly manages the symbolic nature of 'Kaesong' as the origin at the highest state level. The core facility for this is the 'Kaesong Koryo Insam Processing Factory.'15
History: Founded on December 3, 1958, following Kim Il Sung's directive "to build a factory specializing in ginseng processing."15
Modernization: In 2015 (Juche 104), following Kim Jong Un's directive "to renovate and modernize the production process," a new production building was constructed and modern processing facilities were established.15
Quality Control: In January 2016, it obtained North Korea's 'Good Manufacturing Practice (GMP)' certification.15 This shows that North Korea manages Kaesong ginseng not as a simple food but at a pharmaceutical level, and is conscious of international standards.
B. Product Diversification Strategy
North Korea is expanding the 'Kaesong Koryo Insam' brand beyond traditional medicines and health foods into various high-value-added consumer goods.15
Liquor: 'Koryo Liquor,' heavily promoted as a 'hangover-free' spirit, is a prime example. It is claimed that alongside 6-year-old Kaesong Koryo Insam, 'scorched glutinous rice' is used as a sweetener instead of sugar to eliminate bitterness and hangovers.16
Cosmetics: Kaesong Koryo Insam extract is used as a key ingredient in the luxury cosmetic line 'Pomhyanggi' (Spring Scent), which is a major foreign currency-earning export to China and other countries.19
C. Serious Production Issues and Systemic Contradictions
However, behind this glamorous brand management lies a serious collapse of the production base. North Korea's total annual ginseng production is less than 3% of South Korea's, and its yield per unit area is only 40-50% of South Korea's.20
The causes are general mismanagement, such as soil dryness and early defoliation, but the decisive factor is the difficulty in procuring 'sunshade facility materials,' which are essential for ginseng cultivation.20
Signs of this production collapse were also confirmed in November 2022, when the North Korean cabinet's agricultural committee conducted a large-scale inspection of ginseng farms in Kaesong City for the first time in eight years.21 This indicates that the state is acutely aware of the ginseng production problem.
The contradiction on the ground is even more severe. The farm workers being inspected are criticizing the inspection team, saying they "don't see the reality." In other words, the state fails to supply farming materials (like sunshade materials) at state-fixed prices in a timely manner, forcing farmers to procure materials at expensive 'market prices' to grow ginseng. Yet, the state only pressures the farmers based on the fulfillment of the state plan relative to the acreage.
This encapsulates the structural contradiction of the North Korean economy. While the state promotes the high-end 'Kaesong Koryo Insam' brand 2 and showcases external achievements like GMP certification 15, the failure of the planned economy—unable to supply even the most basic 'sunshade materials'—is destroying the foundation of the entire industry.20 Furthermore, the failure to manage the 'terroir' itself, evidenced by soil dryness and material shortages 20, raises serious doubts that the fundamental 'quality' basis for the Geographical Indication (GI) that North Korea claims may be collapsing.
VI. Current Analysis (2): South Korea's 'Kaesong Ginseng' (The State of the Technological Successor)
A. Succession of Legitimacy: The 112-Year History of the 'Kaesong Insam Nonghyup'
The focal point of South Korea's Kaesong ginseng is the 'Kaesong Insam Agricultural Cooperative' (Kaesong Insam Nonghyup).14 This organization is not a simple cooperative; it holds the identity of an 'Institutional Successor' that has inherited the 'legitimacy' of Kaesong, which was severed by division.
The Kaesong Insam Nonghyup began 112 years ago in 'Kaesong-si, Gaepung-gun.' After the division, it moved south, passed through Pocheon, and is now based in Yeoncheon, the area closest to Kaesong. This signifies that Kaesong's human network and institutional history have continued unbroken in South Korea. As of 2022, 756 members manage approximately 5.95 million pyeong (19.67 million ㎡) of cultivation area across 9 cities and counties, including Pocheon and Yeoncheon.14
B. The New Origin: The Irony of the Civilian Control Line (CCL)
Currently, the core cultivation area for South Korea's Kaesong ginseng is the region around the Civilian Control Line (CCL) in Paju and Yeoncheon, geographically closest to the original Kaesong.4
The reason this place was chosen as the new 'terroir' is paradoxical.
Purity: It is the 'cleanest region in the country,' having been cut off from artificial pollutants for decades.13
Security: Strict military control makes access for thieves, who target the expensive ginseng, fundamentally impossible.13
However, the price for obtaining this 'pristine terroir' is harsh.
Military Control: Farmers must pass through military checkpoints every day, and entry procedures for workers during harvest season can take over an hour. Administrative barriers are high, especially for hiring foreign workers, which requires submitting their passports and visas.13
Geopolitical Risk: Entry is prohibited before sunrise and after sunset 13, and if a North Korea-related military issue arises, all farm work must be immediately halted for evacuation. (Example: During North Korea's demolition of the Inter-Korean Liaison Office in June 2020, farmers inside the CCL had to evacuate immediately while working).13
South Korea's Kaesong ginseng farming is a prime example of 'Geopolitical Agriculture,' where 'war risk' is endured to gain a 'pristine terroir.' A farmer's testimony that "climate change has a bigger impact on farming than North Korea-related issues" 13 is a symbolic statement showing that they have accepted constant military tension as a 'given' in their agricultural environment.
C. Modern SCM and Brand Management
South Korea's Kaesong Insam Nonghyup has modernized the business model of the Joseon-era 'Kaesong Merchants.'
Brand: It operates its own brand called 'Hansongjeong.'22
Quality Control: It exclusively handles 6-year-old ginseng 13 and secures consumer trust through a 'Production History System' that manages and supervises the entire process from the planting site to harvest.
Vertical Integration (The Modern Songbang): It operates its own GMP factory in Pocheon, completing a vertical integration from. This is a modern revival of the Joseon Kaesong merchants' 'Cluster' model (Insight 4).
Regional Festivals: It actively supports the 'Paju Kaesong Insam Festival' 4 and the 'Yeoncheon Goryeo Insam Festival' 24, striving to maintain the regional legacy of 'Kaesong Ginseng.'
The following compares the current status of the divided 'Kaesong Ginseng' in North and South Korea.
VII. Key Issue: Geographical Indication (GI) and Brand Disputes
A. Definition and Importance of Geographical Indication (GI)
Geographical Indication (GI) is an intellectual property right that legally protects a name when a product's superior quality or reputation is essentially attributable to its 'geographical origin.' 'Kaesong Ginseng,' with its history and unique terroir, is a classic subject for GI protection.25
B. North Korea's Preemption: Registration under the WIPO Lisbon Agreement
North Korea has leveraged its de facto control over the 'Kaesong' origin to focus on securing its international legal status. North Korea has officially registered 'Kaesong-Koryo-Insam' with the World Intellectual Property Organization (WIPO) as an 'Appellation of Origin' under the Lisbon Agreement.1
This, along with 'Pyongyang Raengmyeon' (cold noodles) and 'Paektusan Tuljuksul' (blueberry wine) 26, is part of a meticulous legal strategy to protect North Korea's core national brands internationally and to exercise exclusive rights when its market eventually opens.
C. South Korea's Response: Registration of 'Paju Kaesong Insam'
South Korea has responded through its domestic law, based on the legitimacy of its 'technology.' South Korea's National Agricultural Products Quality Management Service registered 'Paju Kaesong Insam' as its 20th domestic Geographical Indication.1
The registration as 'Paju Kaesong Insam' rather than just 'Kaesong Insam' 23 is a critical legal strategy. It specifies that the product is produced in 'Paju' using 'technology' originating from 'Kaesong.' This qualifier, 'Paju,' is a defensive measure to avoid a direct legal conflict with the 'Kaesong' appellation of origin that North Korea preemptively registered with WIPO. At the same time, it carries the limitation of legally acknowledging that its origin is not 'Kaesong.'
D. A Foreshadowed Conflict: Legal Disputes in the Era of Unification
Currently, North and South Korea are in a state of 'normative conflict,' asserting rights to the same legacy based on different legal foundations (international law vs. domestic law).28 In the future, if inter-Korean exchanges vitalize 25 or unification occurs, a serious legal and commercial dispute over the 'Kaesong Ginseng' trademark is inevitable.1 North Korea, having registered with the WIPO Lisbon Agreement, holds a powerful legal weapon to block South Korea's 'Paju Kaesong Insam' exports to other member countries.
This 'Kaesong Ginseng' GI dispute is not a simple trademark battle. It is a fundamental philosophical question of 'Is the land (Terroir) paramount, or is the technology (Technique)?' and a fierce legal war over the legitimacy of a divided legacy.
VIII. The Market and the Future: Challenges and Prospects
A. Consumer Perception: High Regard for 'Brand,' but Distrust of 'Price'
In the current market, the 'Kaesong Ginseng' brand still wields powerful influence, but issues of price-trust persist.
Consumers clearly perceive the prices of ginseng and red ginseng products as 'expensive' (70.4% for raw ginseng, 86.1% for red ginseng).
The bigger problem is a severe information asymmetry, where consumers feel there are no objective standards for price or age (years) and make purchases based solely on the 'seller's word' or 'store's label.'
Consumer motivation is twofold. When purchasing for gifts, 'brand' (39.5%) is the top consideration, but when purchasing for personal consumption, 'price level' (28.3%) is the top consideration.29 Origin and cultivation years are lower priorities.29
This sends a clear message to the market. Consumers are willing to pay a premium for the 'Kaesong' brand halo 29, but they want 'trust' that the price is reasonable. Therefore, for the 'Kaesong Ginseng' brand to succeed in the future, securing consumer trust by implementing 'safety certifications' and 'production history tracking systems' is paramount.
B. The Threat of Climate Change: The Disappearance of 'Terroir'
The most existential threat facing 'Kaesong Ginseng' farming is not the military tension of the CCL 13, but the 'climate.'4 Ginseng, which only grows in cool climates, is extremely vulnerable to global warming.
The average annual temperature in the northern Gyeonggi region has risen sharply by 1.9°C (as of 2023-2024) compared to the 20-year average.4
Ginseng's growth stops when temperatures exceed 28°C 4, and sudden torrential rains can rot the roots, devastating farms. The farmer in Paju also testified that climate change is a greater threat than North Korea risk.13
The grim forecast is that by the end of the 21st century, the suitable cultivation area for ginseng on the Korean Peninsula will not be the traditional Kaesong/Paju belt, but will be completely pushed north and confined to parts of the mountainous Gangwon Province.4
This climate change scenario could render the entire 'origin' and 'legitimacy' debate between North and South Korea meaningless. It is highly likely that within decades, the traditional terroirs of 'Kaesong' and 'Paju' themselves will become climatically unsuitable for ginseng cultivation.4 This presents a massive ecological challenge for both Koreas, requiring a fundamental redefinition of the concept of 'geographical origin.'
C. The Possibility of Inter-Korean Cooperation: The Only Way Forward
The two Koreas have brief experience in attempting joint ginseng cultivation (e.g., the Jinan Ginseng pilot plot in Kaesong in 2007).20 And currently, the 'Kaesong Ginseng' of the North and South is in a state of perfect 'Complementary Crisis.'
North Korea: Has the 'land (terroir)' but lacks the 'materials' (sunshades) and 'technology,' leaving its production base on the verge of collapse.20
South Korea: Has the 'materials' and 'technology' but its 'land' (suitable cultivation area) is facing extinction due to climate change.4
This crisis structure points to a single solution. If South Korea's capital, advanced materials, and technology for producing quality seedlings within one year 20 are combined with North Korea's vast land 20, it could triple North Korea's production yield per unit area in a short time.20 This is the only 'Win-Win' strategy, providing the South with new northern cultivation sites to overcome the climate crisis, and the North with the capital and technology to prevent industrial collapse.
IX. 'Kaesong Ginseng' as a Unification Legacy
'Kaesong Ginseng' is a 1,000-year historical symbol born with the Goryeo Dynasty 1 and a unique industrial legacy created by the commercial innovation of the Joseon-era Kaesong merchants.
However, the division of 1953 tragically split this single legacy into the 'Terroir' of the origin (North Korea's Kaesong) and the 'Technique' of cultivation (South Korea's Paju/Yeoncheon).
Currently, North Korea asserts its international legal legitimacy by registering 'Kaesong Koryo Insam' with WIPO 26, yet it faces the paradox of its industrial base collapsing due to a lack of basic materials and systemic contradictions.20 Meanwhile, South Korea has preserved the technological lineage through the 'Kaesong Insam Nonghyup' and is protecting the legacy in the symbolic space of the CCL 13, but it faces the existential crisis of 'terroir extinction' due to climate change.4
Ultimately, the 'Geographical Indication (GI)' dispute between North and South Korea over the legitimacy of 'land' and 'technology' is losing its meaning in the face of the massive ecological threat looming just ahead.
The only way to protect the 1,000-year legacy of 'Kaesong Ginseng' is to move beyond the political and legal confrontation between the two Koreas. Only practical 'agricultural cooperation'—combining South Korea's capital and technology 20 with North Korea's land—can overcome the shared threats of systemic collapse (North) and climate crisis (South), and open the future for a unified 'K-INSAM' 30 brand.
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