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* USDA to permit commercial sugar beet production
* Aims to prevent drop in U.S. sugar production
* U.S. judge had banned planting of GMO beets
* GMO sugar beets make up 95 pct of sugar beet crop
* Opponents say they will sue to stop action
(Adds opponents comments)
By Carey Gillam and Chuck Abbott
KANSAS CITY/WASHINGTON, Feb 4 (Reuters) - U.S. agricultural regulators on Friday said despite a court ban, they would allow commercial planting of genetically modified sugar beets under closely controlled conditions while they complete a full environmental impact statement.
The move marks the second-such boost by the United States for contested biotech crops in a week, and underscores U.S. determination to expand the use of GMO crops amid rising global fears over food security and surging prices.
After approving genetically altered alfalfa last week in the face of bitter protest and after court rulings against an earlier sugar beet approval, the U.S. Department of Agriculture said it would allow Monsanto Co's (MON.N) "Roundup Ready" sugar beets back in the fields this spring.
Beet planting will be done under closely controlled conditions to prevent any potential plant pest risks, according to USDA's Animal and Plant Health Inspection Service (APHIS).
"After conducting an environmental assessment, accepting and reviewing public comments and conducting a plant pest risk assessment, APHIS has determined that the Roundup Ready sugar beet root crop, when grown under APHIS imposed conditions, can be partially deregulated without posing a plant pest risk or having a significant effect on the environment," said Michael Gregoire, deputy administrator for APHIS' biotechnology regulatory services.
Gregoire said the partial deregulation was an interim measure until APHIS completes a full environmental impact statement.
Monsanto's biotech beets, engineered to tolerate the company's Roundup herbicide and make weed management easier for growers, make up 95 percent of the U.S. sugar beet crop and are needed to avoid a steep drop in U.S. sugar production, officials have said.
The government has estimated that if growers have to rely on a limited supply of conventional sugar beet seeds, U.S. sugar production could drop by more than 1.6 million tons, or about 21 percent. Sugar beets account for more than half of the nation's sugar supply.
"This technology has produced record harvests in recent years and increased farmer profitability while minimizing on-farm labor and environmental impact," said Jim Greenwood, chief executive officer of the Biotechnology Industry Organization (BIO).
"We remain hopeful that this action, along with the decision made last week on Roundup Ready alfalfa, will pave the way for new technologies in the pipeline," Greenwood said.
Opponents to the biotech beets said the USDA action circumvents court orders, and they said they would take USDA back to court.
" USDA has yet again violated the law requiring preparation of an EIS (environmental impact statement) before unleashing this genetically engineered crop," said Paul Achitoff, an attorney for Earthjustice, a nonprofit environmental law firm.
Along with the Center for Food Safety, Earthjustice sued USDA in 2008 for approving the biotech beets without conducting a full environmental impact assessment as required by law. They argued that widespread use of the crop leads to increased use of herbicides, proliferation of herbicide resistant weeds, and contamination of conventional and organic crops.
In August, U.S. District Judge Jeffrey White ruled in their favor, finding USDA's 2005 approval of the beets was illegal, and banning the crop until the USDA prepared an EIS. He also ordered that beet seedlings currently in the ground be removed.
The USDA has appealed the order to remove already planted seedlings and a hearing is slated for Feb. 15. The department has said a full environmental impact study will take until May 2012, and it does not want to wait that long to allow planting.
Under the partial deregulation announced Friday, growers of the Roundup Ready sugar beet rootcrop will be required to enter into a compliance agreement that outlines mandatory requirements for how the crop can be grown. APHIS expects that sugar beet cooperatives and processors will be the only entities that will enter into compliance agreements on behalf of their respective members/farmers.
APHIS said it will regulate the seed crop through its permitting process.
Center for Food Safety attorney Paige Tomaselli said the measures were inadequate.
"The measures provided in the decision will not protect farmers and will not protect public health and the environment," she said. "Because USDA continues to bow to industry pressure and permits further commercial production of Roundup Ready sugar beets, without first preparing an EIS or protecting the public, the Center for Food Safety will once again seek to halt the planting in court."
(Reporting by Carey Gillam in Kansas City and Chuck Abbott in Washington; additional reporting by Christopher Doering in Washington; editing by Marguerita Choy)