Bean counting: a Brazilian law could rid the world of the all-natural soybean.

Brazil is one of the world's largest soybean exporters, and pretty much the only producer of natural soybeans. But that could change soon.

Brazil's government in October asked Congress to approve so-called transgenic crops. Since they are more resistant to disease and weeds, genetically modified (GM) seeds produce better harvest yields.

And that means beans. Brazil produces 52.5 million tons of soybeans a year and exports 21 million tons of them, a third of all soybeans exported worldwide. The United States, Argentina and Paraguay account for 65% of world soy exports, nearly all of which come from modified beans. That leaves Brazil as the last major producer of natural soybeans.

In Europe especially, where nearly 60% of Brazilian soy is consumed, there is considerable demand tot unmodified soy because health-conscious consumers prefer them to genetically altered soybeans. Polls suggest a majority of Europeans won't buy modified soy That has Brazilian farmers second-guessing altered crops. In the Brazilian state of Rio Grande do Sul, farmers do produce modified soy, although most Brazilian farmers aren't ready to switch, says Luiz Carlos Balcewicz, a top aide to legislators in the state assembly of southern Parana state, which is Brazil's No. 2 soybean exporter. Instead, Balcewicz says, farmers there expect that increased demand for natural soy from Europe and Asia will cause natural soy prices to rise.

Across Brazil, industry experts say that the law of supply and demand favors a price increase for natural soy. "Even if some farmers here switch to GM soy, many others will stick with non-GM soy because they realize that the scarcer non-GM soy gets, the more its export price will rise," says Juan Diego Ferres, industrial director of Granol Industria e Comercio, Brazil's sixth-largest soy-oil producer.

Farmers in Rio Grande do Sul are also not overly concerned about separating production of genetically modified soy and natural soy, although mixing could cause the modified version to damage the natural version as well as other plant life. Rio Grande do Sul state is the only producer of modified soy, amt its farmers say they can keep modified seeds separate from natural seeds from other regions. There, an estimated 50% to 80% of the soy crop is modified. Across the rest of Brazil, about 90% of the soy crop is natural.

"As no other state but Rio Grande do Sul produces significant amounts of soy, there is already a geographic separation of GM and non-GM soy,' says Amaryllis Romano, an agriculture analyst at Tendencias Consultoria Integrada, a consultancy in Sao Paulo.

Green day. Rio Grande do Stir farmers lobbied hard to get permission to produce modified soy, spearheading the bill that would permanently open the door to transgenic crops, according to environmental groups. The bill follows two government decrees allowing modified soy farming for the 2003-2004 harvests, which produced sizeable crops.

Both decrees circumvented a June 2000 federal court decision that bans the cultivation and sale of U.S. chemical company Monsanto's genetically modified Roundup Ready soybeans and, by extension, all transgenic crops.

After the government issued decrees allowing modified soy planting through 2004, it realized its decision clashed with the court ruling. The government soon realized it needed a law to clear things up and allow for modified seeds, says Sezifredo Paz, executive director of the institute tot Consumer Defense, a consumer advocacy group whose injunction request led to the federal court ban on Roundup Ready soy. "Once the government cracked open this Pandora's box, it realized it had to take off the lid entirely," Paz says.

The government's environmental regulator says the legislation effectively regulates transgenic agriculture. "Our ministry's being able to require an environ mental impact statement before approving a license for a company to sell GM seeds gives our ministry a pivotal role in deciding what GM seeds can be sold here," said Claudio Langone, executive secretary at the ministry.

Roadblocks. Environmental groups, which have qualms about the transgenic crop law, worry about the long-term health effects on consumers. They also fear the genetically modified plants might accidentally crossbreed with the native flora to create super weeds or even poison animals.

"The law doesn't require, but should have required, the company seeking a GM-seed-selling license to provide an environmental-impact statement to assess the health and environment risks of that seed as a precondition for applying for it," says Mariana Paoli, a coordinator of the anti-transgenic campaign at Greenpeace, an environmental organization.

Even if the bill clears Congress, state laws could supercede it. Parana state has already begun drafting a moratorium on the planting, sale and transport of transgenic crops through 2006.

Parana State Assemblyman Elton Welter says he drafted the measure due to health and environmental concerns. "The moratorium is intended to give the government time to assess those risks," Welter says.