2004-03-25 06:30:42 GMT (Reuters)

SYDNEY, March 25 (Reuters) - The Australian state of Victoria on Thursday announced a new four-year moratorium on the commercial planting of genetically modified (GMO) canola.

Premier Steve Bracks said there were still deep divisions and uncertainty within industry, the farming sector and regional communities about market access for GMO crops.

Earlier this week, the Western Australian state government also placed an indefinite ban on the growing of all GMO crops.

The New South Wales state government, however, is considering whether to allow a large-scale commercial trial crop of GMO canola to go ahead, possibly this year.

Last year, the federal government's gene technology regulator gave approval for commercial canola crops. State governments, however, also have powers over production and marketing of GMO crops.

Australia so far grows only only two GMO crops, a large cotton crop in New South Wales and Queensland, and a smaller carnation crop.

Victoria is Australia's largest dairy exporter, with products worth about A$2.5 billion ($1.9 billion) each year. On average, Victoria also exports more than A$1 billion of grain a year.

Dairy group Murray Goulburn Cooperative, barley exporter ABB Grain Ltd <ABB.AX>, wheat exporter AWB Ltd <AWB.AX> and Tatura Milk Industries shared concerns about market access for GMO produce, Bracks said.

Victoria intends to prohibit the commercial planting of GMO canola until 2008, with tightly controlled non-commercial, low-level trials to be allowed as exceptions, he said.

Australia is the second-largest canola exporter in the world, after Canada, whose crop is mostly genetically modified.

However, Europe, the main market for non-GMO canola, takes only small amounts of Australia canola because of shipping costs and competition from other vegetable oils.

Of a national canola crop of 1.6 million tonnes in the year ending March 31, Victoria is forecast to produce 420,000 tonnes, Western Australia 610,000 tonnes, and NSW 282,000 tonnes.

Federal Agriculture Minister Warren Truss said states that ban GMO crops may be disadvantaging their farmers and Australian agriculture.

There was no scientific reason for states to ban GMO crops, and there were doubts over claims there may be market advantages to banning the crops, the minister said in a statement.