A picturesque corner of rural Canada best known as the idyllic home of Anne of Green Gables is now fighting for its economic life against a mysterious outbreak of alleged “food terrorism”.

The prosperous farmers of Prince Edward Island in the gulf of St Lawrence have offered a reward of CAN$500,000 (US$400,000) for tips leading to the conviction of the person or people who have been inserting pins and nails into potatoes grown on the island. Since the sabotage began last October, tampered Prince Edward Island potatoes have been found in grocery stores in four different Canadian provinces, triggering what has been described as the most serious crisis to hit sleepy PEI since the British conquest of Acadia in 1710.

“It’s food terrorism,” said island potato farmer Alex Docherty. “The people doing this are cowards, lower than a snake wearing snowshoes. These are really evil people.”

The saboteurs are also having a major impact on the local economy, where growing and processing the tubers is a billion-dollar industry, supplemented in the summer by Japanese tourists eager to visit the island’s many shrines devoted to their cherished “red-haired Anne”.

“Farm families all over the world work so hard to produce food and to have something like this happen is really disheartening,” said Docherty, chairman of the Prince Edward Island Potato Board. “We want the cowards caught and dealt with to the full extent of the law.”

The local detachment of the royal Canadian mounted police (RCMP) have been investigating the tampering since it first began last October, aided by the offer of a $100,000 reward from farmers. Frustrated by the lack of results, the farmers raised the offer dramatically this week, offering $500,000 for any tips leading to the conviction of the tamperers before 15 August.

“We weren’t getting any conclusion to this,” Docherty added. “The pressure’s building, People want an end to it.”

“We’re not going to take this lying down,” added Greg Donald, general manager of the PEI Potato Board, the farmers group that offered the reward. “We like to think we grow some of the best potatoes in the world in this little place, and we’re not going to let this hurt our reputation.”

Politicians have also rushed the rescue, offering a total of $2m to help island farmers and processors to equip their operations with metal detectors. “Everyone’s goal is to maintain consumer confidence in our world-class potato product,” federal minister Gail Shea said.

The crisis first arose when an undisclosed number of needles were found in potatoes shipped from the well-known Linkletter farms in Summerside in October, halting production immediately. It was the first such attack that has ever occurred in North America, according to farm manager Gary Linkletter.

“Like a deer in the headlights, you don’t know what’s hit you,” he told the Guardian. The family has since installed several hundred thousand dollars’ worth of metal-detecting equipment and resumed shipping potatoes.

“We’ve got a lot of equipment in and have great confidence in what we’re doing right now,” Linkletter said. “But it’s been a big expense and a big distraction from other things that need to get done.”

So far, 40 of the island’s 250 potato farms have installed similar equipment, according to Donald. “It’s tough to see the opportunity now, but flipping the coin we’re going to have the safest potatoes in the world,” he said.

In the meantime, farmers remain content to leave the mounties to catch their man.

“The RCMP doesn’t tell me how to grow potatoes so I don’t tell them how to do their investigation,” Docherty said.