Brazil's soybean fields are already riddled with beans grown from modified seeds smuggled in from neighboring Argentina. Some analysts estimate the amounts at up to 60 percent in the key southern crop areas.

But if Brazil were to permit the widespread cultivation and sale of genetically modified soy, which might still take many months due to the country's labyrinthine legal system, the global balance between modified and unmodified beans might change forever.

LUCRATIVE EUROPE MARKET KEY FOR BRAZIL'S SOY EXPORTS

This could have an enormous impact on exports of soybeans from Brazil, the world's second largest grower, as it would very likely lead to losses in the lucrative European market, where safety-conscious consumers often prefer to buy non-GM foods.

"Europe is the principal buyer of Brazilian soy," said Cesar Borges de Souza, former president of the Brazilian Association of Vegetable Oils Industries (Abiove).

"Europe's preference for conventional soy means that they will look to Brazilian products first. So in market terms, this is a big advantage even if they are not paying an explicit premium for conventional soy," he said.

More importantly, perhaps, a pro-GM stance from Brazil would put it on a much more equal export footing with the hemisphere's other main producers Argentina and the United States - both of which plant more than half their crop with GMO (genetically modified organisms) beans.

According to U.S. Department of Agriculture forecasts, Brazil should grow 41.5 million tonnes of soybeans in 2001/02, compared with 75.1 million tonnes in the United States and 27 million in Argentina - together, nearly 80 percent of global output.

If Brazil's government were to adopt a pro-GM policy, modified beans would also dominate world soy exports as the top three producers would account for an expected 52 million of a total 57 million tonnes of exports forecast for next season.

Brazil's non-genetically modified soy commands a premium over GM material especially in health-conscious markets such as Europe and Japan - and some U.S. processors with customers in Europe will spurn their obvious source of supply and pay extra for non-GM beans.

The European Union purchased more than half of Brazil's total soybean and soymeal exports of more than 22 million tonnes between January and September this year.

"Brazil is exporting more and more soybeans compared with the U.S. and Argentina because people want GM-free food," said Mariana Paoli, campaigner at Greenpeace Brazil, which wants a moratorium on the development of GM food crops until their safety has been properly researched by their standards.

FARMERS LURED BY LOW COSTS, SEED SMUGGLING RIFE

Apart from the premium paid for their produce in Europe, Brazilian farmers are attracted by the savings offered by GM soybeans as they require less application of herbicides, and less fuel to power machinery for routine field operations.

The financial rewards may have already moved the GM issue in Brazil beyond the power of the courts and the government.

Some of Brazil's soybean fields, especially in the south, are said to be rife with GM seeds smuggled across the land and river borders from Argentina, where the use of GM technology is widespread among the country's farmers.

In Rio Grande do Sul, Brazil's southernmost state bordering Argentina and Uruguay, GM soy accounts for some 60 percent of planted area: double the levels seen last year, according to Brazil's Seed Producers Association (Abrasem).