An investigation led by the Oregon Department of Agriculture (ODA) found that Dynamic Seed Source LLC, based in Salem and owned by Trevor Abbott, mislabeled 124 seed lots as Kentucky 31 (K31) tall fescue grass seed.

After examining more than 2,000 seed lots, the records of more than 200 seed dealers and more than 100 seed growers, ODA notified Abbott on Tuesday, June 25, of the findings and the resulting fines, totaling $248,000 for 124 violations of the Oregon Seed Law.

“There is still work to do,” says Alexis Taylor, ODA director. “This is the single biggest investigation in the history of the seed program at ODA.”

To date, more than 2,500 man-hours have been logged. The investigation started in January 2018 at the request of the Oregon Seed Association.

“We asked ODA to look into the issue because abuses were suspected,” says Angie Smith, who serves as the executive director for the Oregon Seed Association. “The harvest for K31 was known to be slim, and what was available for sale seemed to be more readily available than should’ve been.

“Things just didn’t align and there had been a bit of a pattern. Our gut was telling us this was happening, but we couldn’t prove it.”

At the start of the investigation, ODA sent out an industry-wide request to all state-licensed wholesale seed dealers buying or selling K31 to submit their 2016 and 2017 records.

“We had a really good industry response,” says Elizabeth Savory, ODA Seed Regulatory Program manager. “Almost 95% of licensed industry sellers submitted documentation.”

From there, investigators began examining seed records and following up with calls to warehouses and growers to corroborate the information provided, Savory explains.

“We had enough evidence from the records and interviews that seed tests were not needed,” Savory explains, noting that seed testing is available to discern K31 from other tall fescue varieties because it’s a nationwide concern.

ODA worked with the Oregon’s Department of Justice to set the penalty in motion and corrective course of action. Abbott has 20 days to respond, either paying the penalty, requesting a hearing to appeal or to reach some sort of settlement.

Under Oregon Seed Law, penalties can range from $100 to $1,000 for selling or offering for sale agricultural seed which is not labeled or is mislabeled as to kind, variety, origin, lot number and a host of other details. In determining the amount of civil penalty to be assessed, Taylor may take into consideration any factors which have an influence on the particular case. Such factors may include the number of containers or pounds of seed involved, whether the violation appears to be accidental or flagrant and intentional, whether the violation is a first-time offense or if there is a history of violations and the degree of cooperation shown by the person involved in the violation. Any person adversely affected or aggrieved by the Department’s order of a civil penalty is entitled to judicial review of the order as provided in ORS 183.480 to 183.500.

According to Savory, Dynamic Seed Source and Abbott haven’t had prior violations of Oregon’s seed law. The $1,000 penalty was applied to each seed lot misrepresented (124) and applied to the company ($124,000) and the principal owner ($124,000).

Abbott has not returned calls for an interview by Seed World.

“Our goal is to work with all constituents to achieve compliance with education,” Savory says. “We want to do our part to keep to help keep Oregon’s reputation as a quality source for grass seed intact.”

Oregon is the No. 1 producer of cool season forage and turf grass seed in the United States. Most of that production occurs in Willamette Valley. In 2017, forage and turf seed sales was the fifth largest agricultural commodity in Oregon, driving more than $1 billion of economic value. Most of that seed makes its way across the United States and about 30% goes to the international market, according to ODA.

“The findings in this case are a real game changer in the industry and have national significance,” says ODA Director Taylor.

Authorities at the U.S. Department of Agriculture have been notified, as well as the states where the misrepresented seed was sold. Additional violations and penalties could mount for Abbott and Dynamic Seed Source in the coming months.

According to the American Seed Trade Association (ASTA), intentional varietal mislabeling is a serious violation of state and federal seed laws. ASTA supports the action of ODA and advocates for ethical standards and statutory compliance in the development, marketing and movement of all seed.

“Seed fraud with any variety should not be tolerated,” says Pat Miller, ASTA director of state affairs. “The seed industry has a long history of integrity. Comprehensive monitoring, testing and enforcement of all seed laws provides customer assurance and promotes fair competition.”

Meanwhile, ASTA encourages all state and federal regulatory authorities to initiate administrative proceedings against anyone who violates any seed law provision or regulation and issue subsequent fines and penalties as allowed per the law.

In Oregon, seed wholesalers are required to renew their seed dealer license annually. As part of the renewal process, applicants must cite any penalties or violations of the Federal Seed Act, the Oregon Seed Law or any other state seed law totaling $10,000 or more in the prior 36 months.

Fitting with its goal of compliance through education, ODA provides first-time wholesale licensees copies of the Oregon Seed Law and the Oregon Administrative Rules Chapter 603, Division 56 relating to seed dealings. Furthermore, ODA staff contact first-time licensees during their first year selling to provide education and answer any questions.

In addition to the fine of $248,000, ODA could revoke or suspend Dynamic Seed Source’s dealer license. Another option would be to invoke a probationary period, all of which would be determined at a hearing.

BROADER IMPACTS

While this is the act of one company, the implications are much broader and undermine the reputation of an entire industry. According to the U.S. Department of Agriculture’s Seed Regulatory and Testing Division: “Marketing seed under the wrong variety name can lead to financial loss for several participants in the seed marketing chain. For example, farmers buy seed to achieve specific objectives such as increased yield, competitiveness in a specialized market, or adaptability to growing conditions of a specific region. When the variety is misrepresented, the harvest may be less valuable than anticipated, or there may not be a market for the crop.

“Seed companies and plant breeders also suffer in a market where problems with variety names exist. For instance, if then name of a newly released variety is misleading or confusing to the potential buyer, the variety may not attract the anticipated sales.

More often than not, illegal seed practices are considered more of a challenge outside of the United States. In some countries during recent growing seasons, it was estimated that more than 50% of the crop seed sold to farmers was illegal or counterfeit. That’s why the International Seed Federation (ISF) has ramped up its efforts in this area, adopting a position paper in 2018.

According to ISF: “Illegal seed practices compromise the quality of seed sold when … seed packages are labelled with false variety names.” As a result, the federation of which ASTA is a member believes illegal seeds can ruin the reputation and economic prospects of an entire agricultural region or a key national commodity. Illegal seed undermines continuing investment by breeders and seed producers to develop, produce and deliver better quality seeds.

Kentucky 31 Tall Fescue a Hot Commodity

Known in the seed industry as K31, this popular tall fescue is valued by homeowners for its durability, ease of establishment and low maintenance. While the seed is grown in Oregon and a few other states, the bulk of seed production takes place in Missouri; however, Mother Nature hasn’t been friendly to farmers in the state.

Typically Missouri farmers harvest 50-60 million pounds of quality K31 seed, but for the 2014, 2015 and 2016 growing season, farmers harvested less than half the norm, and 2017 wasn’t any better. Farmers experienced record-breaking drought coming into 2017, registering the driest February ever recorded for the state. The challenging winter was followed by wild fluctuations in spring temperatures, heavy rains and a windstorm that knocked out the first wave of harvestable K31 seed. That year turned out to be Missouri’s smallest K31 seed harvest on record.

This all led to a nationwide K31 seed shortage. Anytime there’s a shortage with commodities, prices increase. Consumers saw skyrocketing prices for K31 and some retailers didn’t even stock it on their shelves. The shortage of K31 has also driven up the price of other tall fescue type grasses.

For some, the significant price increase might prove to have been too lucrative.