Adoption of biotech crops has grown rapidly since they first became available to U.S. farmers in 1996.

"All in all, we conclude that there are tangible benefits to farmers adopting first-generation (genetically engineered) crops," the USDA study said.

The United States is the world's largest producer of crops that are genetically modified to make them resistant to pests or to withstand herbicides that kill nearby weeds.

Critics of genetically modified crops say not enough research has been done to assure the new technology was safe for the environment and public health.

In a separate report, USDA last week estimated that 75 percent of the soybeans planted by U.S. farmers this year contained genetically modified organisms, up from 68 percent in 2001.

About 34 percent of the U.S. corn planted had GMOs, up from 26 percent last year. GMO cotton accounted for 71 percent of total plantings, compared with last year's 69 percent.

The USDA study, based on farm surveys conducted in 1998 and 1999, said many GMO crops helped increased farm income.

USDA said boosting the use of biotech cotton by 10 percent translated into a yield increase between 1.7 percent and 2.1 percent. Herbicide-tolerant soybeans translated into a 0.3 percent increase. No data was available for corn.

The study said GMO crops that withstand herbicides would continue to increase in popularity, while demand for pest-resistant seeds - or Bt seeds - would be stagnant.

"Future adoption rates for Bt corn and Bt cotton are expected to increase little or possibly decrease, mainly limited by the infestation levels of their respective Bt target pests," USDA said.

The study also found an overall reduction in pesticide use related to the increased adoption of GMOs.

Farmland treated with pesticides decreased by 19.1 million acres between the 1997 and 1998 crops. The amount of pesticides used also declined by about 2.5 million pounds, USDA said.

USDA said the report's conclusions should be interpreted carefully since the study was based on only two years.