Agriculture minister Pongpol Adireksan told Reuters the government had set up a panel to study transgenic crops before making a decision on whether or not to adopt the technology at its farms.

But the minister said in an interview he believed GMO technology, which enables genes of farm products to be manipulated, sometimes by introducing external genes, would benefit the farm sector if applied carefully.

Pongpol's comments signal a shift toward a more cautious approach to GMO technology. The government has in the past said it is keen on promoting the use of biotechnology to boost farm output.

Thailand has not introduced GMO foods or crops on a commercial basis yet.

Strong resistance against GMOs has emerged from some European countries who have dubbed GMO crops ``Frankensteinfood''. The EU is a major market for Thai farm products.

``Biotechnology which allows us to modify genes of crops and animals is part of human evolution... Thailand's stance is that we welcome it, but with extreme caution,'' Pongpol said.

``In the light of rising concerns about GMO, Thailand will have to study the benefits and the negative side effects of the technology carefully before we adopt it,'' he said.

The government's committee would look at the scientific, environmental, trade and cultural aspects of the technology, the minister said.

Thailand is the world's top producer of rubber and tapioca. It is also a leading rice, sugar, poultry and shrimp producer and exporter.

Thailand is torn between a need to improve farm efficiency and competitiveness, and concerns about the impact of biotechnology on trade.

On the other hand, producers and exporters such as the United States, China, Argentina are using biotechnology to boost their output and lower production costs.

``Thailand is both animporter and exporter of farm commodities. We have to look at both sides of the coin. Once you have problems with it, it becomes globalised,'' Pongpol said.

``Take the Belgian dioxin issue, for example. It is not related directly to GMO, but you can see that once there are problems with food, the issue can easily escalate into a global one,'' he added.

In Thailand, a government agency is developing some fugus-resistant fruits and long shelf-life chillies.

Other transgenic crops such as cotton, corn or soybeans would likely be bought from foreign companies and tested for safety before being released into the fields.

Monsanto Co of the United States, for example, expects to release Bollgard cotton commercially in Thailand by 2000. The cotton contains bacteria which kills the bollworm pest.

Thailand spends about 20 billion baht a year importing cotton, mostly from Australia and the United States.