The New York State Attorney General Andrew M. Cuomo Announces Settlement With Seed Company That Deceived Farmers About Quality Of Seeds Sold

ALBANY, N.Y. (April 1, 2009) - Attorney General Andrew M. Cuomo today announced an agreement with a seed production company that repeatedly mislabeled bags of seed in regards to type, purity and germination rates, and failed to comply with New York State’s seed certification requirements - which led to an artificial inflation of the price of the product.

Under the settlement, Seedway, LLC, will pay $246,000 in refunds to consumers who purchased mislabeled bags of seed and $100,000 to the state in penalties and costs. This is the largest fine ever for a violation of Agricultural and Markets law in regard to seed sales. Seedway has also agreed to implement an audited quality assurance program that will set a new standard in the seed industry and provide needed safeguards to ensure the accuracy of future seed labeling.

“Farmers depend on accurate seed labeling to operate a successful business and protect their livelihood,” said Attorney General Cuomo. “By mislabeling the quality and class of seeds it sold, this company caused potential detriment to a vital New York industry. With this settlement, farmers will get back money they spent on inferior products and will know that a new standard has been established.”

New York State Agriculture Commissioner Patrick Hooker said, “This is a landmark settlement for the agricultural community. For several years now, Seedway has deceived farmers by selling premium, certified seed with germination rates well below what was listed on the bag. Their disservice cost farmers not only the price of the seed, but potentially decreased yields. However, through the state’s extensive investigation, we have secured full reimbursement to affected farmers for misrepresented seed they purchased from Seedway, recovered penalties and costs to the state, and have begun rebuilding and strengthening the state’s seed certification program.”

Agricultural production returned over $4.5 billion to the state’s economy in 2007. About 25 percent of the state’s land - 7.5 million acres - is used by 34,000 farms to produce a diverse array of products.

Seedway, located in Hall in Ontario County, produces commercial seed for use by farmers in New York and throughout the country. The state’s investigation revealed that between 2004 and 2007, Seedway sold approximately 22,000 fifty-pound bags of falsely labeled and improperly certified seeds to over 200 customers. The company wrongfully certified inferior seeds and labeled seed bags with incorrect classes and germination percentages, which farmers depend on for the viability of their crops. Employees at Seedway’s facility in Mecklenburg also fraudulently affixed seed bags with New York state inspection certificates when they were not actually inspected and certified. As a result of these inaccurate labels, consumers bought the seeds at higher prices than if they had been labeled correctly.

As part of the agreement, Seedway will search its records to identify eligible consumers, determine the amount of refund and send a refund check by May 1. Seedway has also paid the state $100,000 in penalties and costs.

Seedway must also develop and implement a quality control and assurance program to be approved by the Department of Agriculture and Markets. The program requires Seedway, among other conditions, to submit seeds to a New York state-approved testing laboratory for testing. Seedway must also audit the information on every lot of seed they sell. Such information includes date of seed processed, weight, name of seed treatment, names of labs that performed testing, and a germination analysis report.

The case was handled by Principal Attorney Robert Vawter and Deputy Bureau Chief for Consumer Frauds and Protection Mark Fleischer under the supervision of Bureau Chief for Consumer Frauds and Protection Joy Feigenbaum and Deputy Attorney General for Economic Justice Michael Berlin.